Operations Management

Berfield & Baigorri (2013) relate a fascinating story about a Spanish company whose supply chain is highly centralized and where "speed and responsiveness are more important than cost."  We learn the Zara produces about half of its clothing in Spain or nearby countries and the rest in other carefully selected locations.  All products are shipped to Spain for distribution to the stores.  With this level of control, Zara manages to make scheduled deliveries twice a week to each store, often with 48 hours after leaving Spain.  Fast Fashion refers to not only the speed at which inventory reaches the store but also to the interval at which the store's inventory is refreshed.  Zara's store managers use Personal Digital Assistants (PDAs) to provide daily feedback to the company headquarters, where the data is used to drive decisions regarding stock replenishment and new products.  Zara has also invested in the technology which enables them to go from conce...

Notably, Zara has a unique approach to handle changing demand, which has allowed the company to become widely successful and a leading business organization in the fashion retail industry, in which many corporations struggle to deal with fast-changing environments, operations, and inventory costs. The arrival of new trends forces retailers to adapt their collections, causing what James (2011) calls the Forrester or bullwhip effect. Zara relies heavily on outsourced manufacturing, even though most operations and inventory decisions and strategies are still held, taken, and based out on their headquarters in Spain. Every time an order is placed, all items are shipped to Spain for final design adjustments and inventory stocking. With the use of technology and collaboration with its store managers, the company can produce only what is currently trending, which results in a significant reduction of unsold items caused by the rapidly changing tastes of consumers in this fast-changing ind...

            These are the challenges Zara will be facing namely: Language, Culture and Educational Background: Language and culture are vital in the success of a company but in the case of Zara it will be a barrier because there is a tendency that the language of the people of Morocco will not be the same with the people of Portugal. These two countries (Morocco and Portugal) are major outsourcing countries, so it will surely affect the company’s production. Educational background is key to success. Morocco is a country in Africa- a developing country while Portugal is a developed or advanced country will surely affect both quality and productivity.             High-Level Management: High-level management is the brain behind the success of major companies because the management or the manager(s) is into planning, organizing, coordinating, directing and controlling, etc. In Morocco which is a developing country profess...

The biggest challenge that Zara currently faces is how to manage its exponential growth, while stilling maintaining its world-class supply chain system. Founded in Spain in 1974, they are a global fashion powerhouse and are valued as having the 46th most valuable brand in the entire world by Forbes Magazine (Mhugos, 2015). Their central distribution center, affectionately known as “The Cube” creates and distributes clothing on a scale and at a rate that competitors simply cannot match. They can turnover designs in 2 weeks, versus 3-4 months for industry average and they have 11,000 fashion offerings per year, versus 2,000 – 4,000 for the industry average (Mhugos, 2015). Simply remarkable. China is on the horizon with it now having the second largest number of stores at 142 (Berfield & Baigorri, 2013). With all of the new wealth being created in China and with the numbers of affluent new consumers expanding each day, the opportunities that this market offers are simply incredib...

There will most certainly be reduction personnel performing a mundane task within these organization as those tasks are automated.  Whether this leads to headcount reductions within these firms is dependent upon whether the organization retains the employees to perform another task more suited to humans.  As I look around my workplace, I see scores of harried people mired in mundane tasks.  Automation of these tasks is promised and many feel that it cannot come fast enough.  Looking at the same population, I can see that automation will free them (us) to pursue higher-value activities for our customers and shareholders.  In my particular company, I do not foresee a reduction of headcount.  Rather, as we grow, I see a slowing of hiring as more automation is introduced. A recent McKinsey study predicted that by 2030, as many as 800 million jobs will be lost, worldwide, due to automation.  The report also stated that new jobs will be created that will o...

According to Longman dictionary Integration is the combination of two or more things so that they work together effectively. Based on this definition it will surely lead to personnel reduction. The reasons are the following: it leads to cost benefit. Cost-benefit analysis (CBA) is a technique which attempts to describe and quantify the social costs and social benefits of investment projects, to help in deciding whether or not an investment should be undertaken (Pearse, 1971). Biesse Group makes use of machine usage analysis and production process optimization. Since Biesse Group is interested in market growth and cost savings cum customers are interested in viewing digital capabilities with overall productivity. Instead of the company to employ, it makes use of machines performed to carry out its functions and the excellently. This will surely reduce the cost of production. Biesse Group makes use of preventive maintenance alerts, machine management, manufacturing events analysis,...

Digital and internet are reinventing many industries, 64% of executives in the large companies believe that their companies will struggle for survival if they fail to leverage the technology (Accenture, 2018a). How can the company leverage digital technologies? By innovation, redesign/re-engineering of its products, personal approach production, and after-sales support (Accenture, 2018a). To do this, the Industrial Internet of Things (IIoT) is one of the forefronts to ease the process. IIoT which sometimes referred to as Industry 4.0, is “a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data,” (Epicor, n.d). Characterized by various sensors, devices, network, APIs, apps and data, IIoT marries physical production and operations with smart digital technology, machine learning, and big data to create a more holistic and better connected ecosystem to drive operational efficiencies, improve products performance...