entire chain – spends money on anything that helps to increase and enforce the speed and responsiveness of the chain as a whole Leverage your capital assets to increase supply chain flexibility – make capital investments in production and distribution facilities and use them to increase the supply chain’s responsiveness to new and fluctuating demands 5. 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. 6. 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. 7. 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.
8. 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. 9. 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. 3 Parts of Social Responsibility (SR) •Legal and Ethical Behavior – Acting within the law in all of the nations in which they conduct business. It might also include treating stakeholders well - employees, business partners, and customers. •Sustainability – Earth-friendly business practices. Having business practices, products, and services that do not harm the environment in the present nor in the future. •Commitment to the Community – Investing in the well-being of the communities in which the business operates as well as the greater world. 4 Reasons to be Socially Responsible •Avoid government fines and regulation – Governments are moving toward making many forms of social responsibility the law. Some companies seek to change before change is imposed upon them. •Seek positive public image – Being seen as a socially progressive company may expand your market and dissuade regulation that might directly impact your organization. •Demonstrate to customers and employees the company’s goals and values – Customers and some of a company’s best employees may value social responsibility. They might prefer if the company had similar values.