Term
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Definition
| outsourcing manufacturing to third-party firms. can keep the cost of goods low. often exploits workers or skimps on environmental regulations |
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Term
| Fair Factories Clearinghouse |
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Definition
| created by Reebok, a non profit that provides systems where apparel and other industries can share audit information on contract manufactures so that firms would be able to avoid working with 'bad apple' suppliers |
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Term
| what is one of the largest challenges in the apparel industry? |
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Definition
| long manufacturing lead times require executives to guess far in advance what customers will want |
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Term
| personal digital assistants (PDAs) |
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Definition
| handheld computing devices meant largely for mobile use outside on office setting, used to gather customer input, staff regularly chat up customers to gain feedback on what they'd like to see more of. |
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Term
| how does Zara motivate their employees to gather info? |
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Definition
| as much as 70% of salaries can come from commissions |
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Term
| what happens at the end of the day at a Zara store? |
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Definition
| at the end of the day, the staff examines unsold items that customers tried on and look for trends in what did sell such as fabric, color or style. |
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Term
| point of sale system (POS) |
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Definition
| a transaction processing system that captures customer purchase info- showing how garments rank by sales. |
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Term
| who makes up the Zara design staff |
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Definition
| Zara design staff is full of teams young people who are humble enough to accept feedback as well as share credit for winning. individual bonuses are tied to the sucess of the team, and teams are regularly rotated. |
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Term
| what is one of zara's geographical advantages |
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Definition
| zara is very good at getting locally targeted designs quickly onto shelves |
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Term
| avarage idea to store shelf for zara |
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Definition
| 15 days, 12 times faster than Gap |
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Term
| how is zara able to be so responsive to customer demands? |
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Definition
| zara is able to be so responsive to market demands through vertical integration and technology orchestrated coordination of suppliers, manufacturing, and logistics. |
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Term
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Definition
1. cultivates the exclusivity of offerings, each zara store is stocked with items tailored to the tastes of it's local clientele
2. limited runs encourage customers to buy right away at full price
3. encourages customers to visit often, zara barely advertises |
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Term
| how is zara's IT expenditures less than the industry average? |
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Definition
| zara has a small IT expenditure because it excels by targeting technology investments at specific points in its value chain where it will have the greatest payoff |
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Term
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Definition
| a solution that includes 5 components and is not strictly based on technology |
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Term
| return on investment (ROI) |
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Definition
| amount earned from an expenditure |
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Term
| just in time manufacturing |
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Definition
| a production model in which item are created to meet demand, not created in surplus or in advance of need |
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Term
| limitations of zara's spain-centric just in time manufacturing model |
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Definition
1. remains hostage to anything that could create a disruption in the region
2. vulnerable during periods when the euro strengthens relative to the dollar
3. rising transportation costs
4. european economic conditions |
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Term
| how has zara countered cost increases |
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Definition
| zara has countered cost increases by raising prices overseas |
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Term
| how could zara move to protect themselves from their vulderabilities? |
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Definition
| zara could move to protect themselves from their weeknesses by working on global expansion including a mix of locations |
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Term
| technology must ______ a company's business strategy |
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Definition
| technology must support a company's business strategy |
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Term
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Definition
network of organizations and facilities that transforms raw materials into products delivered to customers.
customers order from retailers, who order from distributors, who order from manufacturers, who order from suppliers |
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Term
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Definition
| a push model with the customer is at the end of the chain. focuses on promotions, driven by mass market, large inventory levels |
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Term
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Definition
| a pull model with the customer at the beginning of the chain. information substitutes inventory and there's more customization |
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Term
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Definition
| variability in order size and timing increase in each stage up the supply chain, reducing the overall profitability of the supply chain |
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Term
| what causes the bullwhip effect? |
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Definition
the bullwhip effect is caused by
1. demand forecast updating
2. order batching
3. price fluctuations
4. rationing and shortage gaming |
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Term
| what are the effects of the bullwhip effect? |
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Definition
the bullwhip effect results in:
1. excessive inventories
2. insufficient and excess capacities
3. poor customer service and lost sales; long backlogs
4. frequent revision to production schedules
5. high costs for corrections |
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Term
| how do you stop the bullwhip effect? |
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Definition
| the bullwhip effect can be stopped by letting all participants have access to consumer-demand information through interorganizational information systems |
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Term
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Definition
vertical provides more control, but also more risk and responsibility.
horizontal provides less control and risk, but this results in less ability to respond/change |
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Term
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Definition
| the removal of intermediaries in a supply chain, 'cutting out the middleman' and establishing vertical integration |
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