Zara Case

This report will based on ZARA demonstrate how ZARA to implement the approaches of lean and agile. At firstly, this essay will focus on explaining the concept of modern learn and agile methodsand how the concept of " just-in-time manufacturing" and " Kanban" operations are incorporated into lean and agile approaches. Secondly, this essay is about to carry away on producing a critical evaluation of four of the following waste reduction areas, over production, waiting time, transport, process, inventory, excessive movement, defective goods, poor service. In addition, the essay contrasts the lean and agile approaches with different industries your are familiar with. At last, the essay will show how economic benefits can be gained by both suppliers and customers through the use of lean and agile approaches.

2.1 Explain the concept of modern learn and agile methods.

The approaches of lean and agile refer to that a strategy for achieving significant continuous improvement in performance, through the elimination of all waste associated to resources, time and the total business. The objective of a contemporary, modern, lean and agile organisation should include the following. Firstly, to develop a lean approach to operations. Secondly, it introduces and uses cross-functional teams. Thirdly, the application of problem solving techniques. Fourthly, to reduce cost through increasing added value and measure, maintain improved performances throught all areas of the organisation (SQA, 2012).

The lean thinking has five principle as following. Firstly, to specify what create value for customer. Secondly, to make value flow. Thirdly, to strive for perfection by eliminating waste as they are identified, always seek perfect approaches to solve problems. Fourthly, to identify activities in the value chain. Fifthly, only make what is pulled by the customer within a just-in-time system (SQA, 2012)

In the practice, ZARA devotes to minimize the waste in material flow. ZARA's material flow is also very unique. It advocate to Just in time system to promote flow in internal supply chain. In the fabric procurement, ZARA major purchase of the original fabric (a cloth is not dyed), and then stained according to the need for production. Not only can quickly respond to market trends on the color change can also reduce costs and prevent shortages of raw materials inventory risk. To prevent dependence on a supplier, but also encourage suppliers to faster response, ZARA supply of raw materials left near the company from its 260 suppliers, each supplier's share of no more than 4%.

To adopt the approaches of lean and agile bring ZARA many positive affect. It can increase the effeciveness and efficiency of material flow in order to keep a smooth cash flow. It also help firm eliminate the phenomenon of lacking of material. On the other hand, it also brings some negative effect, for example, as ZARA adopt multi-suppliers strategy, ZARA loses some opportunity of obtain the discount.

2.2 Explain how the concept of " just-in-time manufacturing" and " Kanban" operations are incorporated into lean and agile approaches.

Just-in-time is a manufacturing strategy wherein parts are produced or delivered only as needed (merriam-webster, 2012). It means producting goods and services exactly when they are needed. Kanban, literally meaning "signboard" or "billboard", is a concept related to lean and just-in-time (JIT) production. According to its creator, Taiichi Ohno, Kanban is one means through which JIT is achieved. Kanban is not an inventory control system. It is a scheduling system that helps determine what to produce, when to produce it, and how much to produce ( wikipedia, 2012). The concept of approaches of lean and agile is meaning that moving towards the elimination of all waste so as to develop an operation that is faster, more dependable, produces higner quality products and service, operates at low cost. To sum up, the terms of Just-in-time and lean is almost interchangeable. Generally, lean can be viewed as a philosophy of operations management.

In the production, Zara through the main assets in the investment levers to increase supply flexible, in Europe the raw material supply the just-in-time (most is the Spanish and Portuguese), and in Asia, with low cost combination strategy so as to acquire a new needs and the quickly. And those who will be transferred to the Asian manufacturing base of clothing manufacturing, by contrast, Zara themselves keep 40% of capacity, and others are outsourced. In the European production demand highly uncertain product, in the Asian manufacturing needs certain products. Zara intends to set aside extra capacity to small batch to manufacturing and distribution products, this kind to asset investment increase the organization's overall flexibility.

To implement the just-in-time manufacturing bring ZARA many positive affects, for example, it increase the flexibility of production so as to produce needed goods according to customers' need. But, it alos has some negative effect on ZARA, when the employees can not accept the new approaches of lean and agile well, it may result conflict in firm.

In Kanban system, ZARA need to follow strict procedure as following. Firstly, send good products downstream to the next process. Secondly, each process only orders what it currently needs from the upstream process. Thirdly, each process only produces the quantity ordered by the downstream process. Fourthly, it maintains a level rate of production. Fifthly, to use kanban to fine-tune the rate of production.

Kanban provide ZARA with many benefits. It reduces waste and scrap. With Kanban, products and components are only manufactured when they are needed in order to eliminates overproduction.

2.3 Produce a critical evaluation of four of the following waste reduction areas, over production, waiting time, transport, process, inventory, excessive movement, defective goods, poor service.

In ZARA, there are four waste reduction areas as following, overproduction, defective rate, transport and poor service.

In terms of over pruduction, Zara intends to set aside extra capacity to small batch to manufacturing in order to adjust the manufacture planning and increase flexibility of production. In this way, ZARA avoid the phenomenon of over production. It bring many benefit for ZARA, ZARA can produce the customer really needed commodity and avoid unnecessary inventory. On the other hand, it also has some side effect, sometimes it can not meet the demand of customer.

In terms of defective goods, ZARA adopt total quality management, it is a description