Exponential success through integrated supply chain optimization, ecomotional intelligence and reputation-based leadership: Zara model

Abstract

‘You need to have five fingers touching the factory and five touching the customer.’ Amancio ORTEGA, Inditex Chairman

Fast fashion figures among the most lucrative using industries of the modern economies. With $25 billion annual sales in 2018, Zara that pioneered fast-fashion art has achieved an outstanding rapid surge, conquering 96 markets worldwide. The proposed paper presents the results of a critical thinking on how Zara applied innovation and continuous improvement in its operations and strong business model to maintain its unique competitive advantage over time. Our study shows that the secrets behind its exponential success are mainly a sophisticated sustainable supply chain, integrating efficiently the layers of design, sourcing, manufacturing, and distribution to stores for customers. It has to do with the best trade-off between low storage and shorter time response to customers in a contracted volatile market. Concisely, this research on specialized studies done over recent years seeks to help professional leaders grasp the best managerial and relational practices, along with developed operations’ research tools based on demand forecasting, inventory-distribution and clearance pricing optimization models. It aims also at enriching their knowledge with some non-quantitative methods related to clients’ preferences, ‘glocal strategy’ for adaptation, and social responsibility. As such, in view of the frequent conjunctional use of economic intelligence and emotional intelligence by Zara, we coined the neologism ‘ecomotional intelligence’, as a guide to belief and action.