Operations Management Principles - The operational Management Essay

Operations Management Principles - The operational Management Challenge at the Inditex Group - Essay Example This report highlights the operational management challenges at Inditex, as well as successes in providing fast fashion merchandise to many different target markets, to determine how Inditex remains a clothing manufacturing leader among many different competitive entities internationally and within the European environment. Operational objectives and competitive advantages The goal of Inditex is to provide fast fashion merchandise, meaning that there is a rapid turnaround of existing inventory to ensure that the majority of clothing products do not have to be held in inventory, thereby reducing costs in inventory management. Inditex understands that fashion merchandise, especially with the younger markets most attracted to Inditex fashions, maintain a very short life cycle. In Zara, as one example, virtually every piece of merchandise is on display, with Zara holding only a few key pieces of the same piece of fashion products, thereby creating an image of exclusivity for discriminati ng customers (Ferdows, Lewis and Machuca 2003). Having an understanding of the industry and product lifestyles are absolutely critical as it provides the knowledge necessary to develop worthwhile future operational strategies (Ha-Brookshire and Lee 2010). The majority of Inditex’s fashion stores are still in the growth stage along the industry life cycle, an environment in which the global supply chain for fashion merchandise has increased the total volume of available smaller and larger production entities and where strategic alliances along the supply chain are becoming more well-developed. Therefore, the supply environment in the aforementioned growth stage provides Inditex with unique opportunities to procure raw materials that give Inditex the ability to have a rapid turnaround of fashion merchandise. What is unique about Inditex is that the company is able to move from the design phase to tangible, in-store delivery of finished fashion merchandise much more rapidly than its many other competitors. This is what provides Inditex with the significant competitive advantage. For instance, Zara maintains an in-house staff of approximately 300 designers who consistently upgrade current season fashions and work toward designing the next supply of fast fashion, unique merchandise (Ferdows, et al. 2003). The ability to procure enough raw materials to begin production within a 4-6 week lead time is unparalleled in the industry, supported by Inditex’s ability to produce 50 percent of its total fashion volume within its many self-owned production facilities (Ferdows, et al.). Hence, whilst Inditex is busy designing merchandise along its operational model, in-house production experts and a variety of outsourced garment producers (especially sewing capabilities) are working consistently on producing new and innovative fashions along the short lead time. Other competition in the industry have lead times that can be up to six months, thereby giving Zara con siderable competitive advantages over the majority of its fashion competitors. The aforesaid is the operational objective of Zara: to align its operational strategies and production capabilities to meet the strategic objective of exclusive fashion merchandising and production. The organisation,