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Fig. 3: Differences Between Zara & Other Conventional Models of Supply…
Fig. 3: Differences Between Zara & Other Conventional Models of Supply Chain Management
Zara
Vertically Integrated
Efficiencies = quality/speed
Carry inefficient tiers
No/limited market forces
High capital intensity
Own more of the supply chain
More expensive if end demand decreases
Control over supply chain >
Mismatch with upstream suppliers
Great control over quality
Economies of scale
Larger facilities required
More complex - scheduling/varieties
High capital equipment running costs (ROI)
Conventional Models
Deintegrated
Efficiencies = cost
Inefficient tiers = lose contract
More competitive forces
Warehousing stock issues/costs
Own 1-2 tiers
Risks - sharing sensitive information
High focus on partnerships
Type II
Type I
Type III
Supplier reliability issues
< Control over supply chain
Lower capital intensity
Challenges enforcing standards
Conflicts of interest
Increase risk of delays
Smaller facility sizes needed