And distribution facilities and use them to increase

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and distribution facilities and use them to increase the supply chain’s responsiveness to new and fluctuating demands 1 Describe Zara’s Design and Production center in La Coruna. Her design and production center is attached to Inditex headquarters in La Coruna. It consists of three halls: one for women’s clothing lines, one for men’s, and one for children’s. 1 How does Zara control the bullwhip effect? In an industry that allows retailers to change a maximum of 20% of their orders once the season has started, Zara lets them adjust 40% to 50% to avoid costly overproduction and the subsequent sales and discounting prevalent in the industry. 1 What are some positive customer behaviors Zara sees because of its operational plan? There is a sense of tantalizing exclusivity, since only a few items are on display. A customer thinks, “This green shirt fits me, and there is only one on the rack. If I don’t buy it now, I’ll lose my chance. 1 Why does Zara prefer to own production assets? Owning production assets gives Zara a level of control over schedules and capacities that would be impossible to achieve if the company were entirely dependent on outside suppliers. 1 What types of products does Zara produce themselves? Which items do they outsource? The simpler products, like sweaters in classic colors, are outsourced to suppliers in Europe, Africa, and Asia. Zara reserves the manufacturer for more complicated products, like women’s suits in new seasonal colors, for their own factories. Module 08: Socially Responsible Supply Chain Management
SCM 300 – MODULE 08 Study Packet Protect the company’s interests – Some would argue that being good has many long- term rewards, even in business. 3 Links between SCM and SR Eliminate waste – Good supply chain and business sustainability both value efficiency. Legal and Ethical Business Practices – Treating customers, employees, and supply chain partners well is vital to controlling costs, maximizing productivity, and increas- ing sales. Improve quality of life – While supply chains are supposed to efficiently deliver valuable products and services to customers, we can also extend this point to say that the best supply chain practices in business, govern- ment, and military can be useful to organiza- tions that seek to save lives Challenges of being SR What’s the right thing to do? – Throughout history companies and activists have devel- oped programs and practices intended to re- sult in better social outcomes. Some of the most logical ideas have turned out to result in poor if not dangerous outcomes. Even in our modern society with some much knowl- edge about commerce, culture, and science, sometimes finding good answers can be ex- tremely difficult? Investigate almost any so- cially responsible product or business prac- tice and you are likely to find detractors that will argue it causes more harm than good.

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