Bullwhip Effect in Supply Chains at The Brand of Zara Spanish Fashion
Some companies now use the strategy of maintaining a chain supply (supply chain) in the control or maintain the market, one which is the garment industry. Constraints that often arises is the existence error information received where one result is stock uncertainty that occurs in channels of supply chain. Uncertainty is the main indicator in the bullwhip problem effect.
I want to describes the history of ZARA's success and supply chain, bullwhip effect, and then combined with a successful practice in the supply chain ZARA, ZARA analysis eliminate the bullwhip effect of supply chains of some key aspects.
Spanish fashion brand of ZARA cause rapid reaction known in the fashion industry, the pattern of success and innovation to become the industry benchmark. Annual ZARA 12,000 different types of products for customers to choose the project, from design concept to finished product has been added only 10 days.

Spain's Inditex is ranked first, third world clothing retailer, in 52 countries around the world with nearly 2,000 stores, including Inditex, 9 ZARA is the most famous brand in the pre-eminent brand, called "the fashion industry DELL computers", European research is considered the most brand value .

ZARA founding in 1985, is a clothing brand, also a franchise chain of retail brand clothing brand ZARA. ZARA is owned and operated company sticks to almost any chain network principles, while putting in a lot of money to build their own factories and Yipian logistics systems "five-finger understand customer needs, controls five other fingers production", rapid response to market demand, for provide customers with "affordable fast fashion."

ZARA extraordinarily successful operation of the company's benefit management of the entire apparel industry supply chain, and support rapid response supply chain IT systems. ZARA companies to adopt a "fast, small, some kind of" brand management model, while maintaining and fashion, by combining the development of new models, rapid introduction of new products, and man-made causes "out" to achieve rapid design, rapid production, sale quick, quick update, store merchandise is updated twice a week goal.

Bullwhip Effect

In the supply chain, there is often an example of inaccurate predictions, the demand is not a week, instability of supply, coordination and cooperation among sexually-firm, between Zaocheng lack of supply, production and transportation average Kucun Zuoye high, too high Xian Xiang Cheng Ben. The root cause of this problem there are many, but one of the reasons is the bullwhip effect.

Bullwhip effect is an amplification of supply chain demand variability (variance amplification) phenomenon, is the flow of information from the end client-side delivery to the original supplier, can not effectively realize the sharing of information, making information distortion amplification step by step, led to increased demand for information appears fluctuations. This information is distorted amplification in the graphical display as drive the rejection of the bullwhip effect, it is clearly called bullwhip effect. The root of most downstream clients is equivalent to a whip, and the most upstream suppliers is equivalent to whip the end of the tip of the Ministry, at the end of the root as long as there a little jitter, transfer to the distal end will be a big fluctuation. In the supply chain, this effect is upstream, the greater the change, the more distant from the consumer end, the greater the impact. This information is distorted and the manufacturing process if the uncertainties are added together, would cause great economic losses.

ZARA Way to Eliminate the Bullwhip Effect

ZARA brief history of success, and what the bullwhip effect, of course we think ZARA is how to overcome the bullwhip effect supply chain? In fact, ZARA in the face of supply chain bullwhip effect is very successful, the following analysis will focus on how to eliminate the bullwhip effect. To eliminate the bullwhip effect ZARA should benefit from the entire management and control model.

Entire Supply Chain Management

ZARA has a supply chain management is very well equipped: design, procurement, production, distribution and sale terminals. From design to production, to bring new clothes to stores worldwide in just 15 days. ZARA without assistance from external partners to design, warehousing, distribution and logistics, but the full embrace of all-inclusive, to maintain full control over the entire supply chain in China. ZARA's supply chain management where information is quickly passed from buyer to designer and production manager. supply chain management are also available on the flow of raw materials and products in every step of the process real-time tracking. Ultimate goal is to end customers and design, procurement, production and distribution links between upstream run as fast and direct communication.

From the customer to the store manager, store manager of market commissioner from each designer, from designers to production staff, from managers to warehouse distributors, and so forth. At most companies, different departments often have information that might impede communication bureaucracy, but ZARA organizational structure, operational processes, performance measurement, and even the layout of the office will facilitate communication on the principle. It is said that a competitor, ZARA for the supply chain is almost completely controlled. Alone are responsible for all product design and distribution, manufacturing outsourcing ratio is also lower than peers, and almost have all the shops.
ZARA control of the supply chain to enable to control the speed of product and information flows, so can the entire supply chain quickly and run a predictable rhythm. Precise rhythms began to retail outlets. All store managers twice a week under orders, in which Spain and Southern Europe at 3 pm Wednesday and Saturday at 6 pm deadline, another area on Tuesday at 3 pm and 6:00 Friday deadline. The implementation of very tight deadlines.

ZARA described above throughout the supply chain management, an important point, ZARA is supply chain management with accurate control and almost complete overall of strict control, so that the entire supply chain speed and efficiency to the highest, so it will eliminate the demand Forecast Update, limited supply and lack of game elements such as the bullwhip effect is produced, then the supply chain, from basic office to eliminate the bullwhip effect.
Order a Small Number

We know that bulk orders will have the bullwhip effect. ZARA store orders twice a week, and the store manager and demand based on existing sales orders. This is basically each to ensure that meet the needs of the next few days, so as not significant, and twice a week, orders can be sure of repetition.
IT Support For Business

Supply chain management to ensure smooth overall, to ensure effective to achieve a number of small, ZARA approach is to use IT systems that support strong for protecting. The scope of IT to effectively support the needs of customers involved in the collection of information, information on clothing, standardization, product information and inventory management and distribution management, etc., in these operations into IT support, so that processing timeliness and accuracy greatly strengthened.