Operations management is the main central function of a company ,it refers to the administration of business practices to create the highest level of efficiency possible within an organization. It is connected with converting materials into goods and services, to maximize the profit of an organization . Operations manager provide, develop , deliver goods and services to clients based on their wants and the abilities of the company .
It include planning, organizing, coordinating, and controlling all the resources needed to produce goods and services of a company . it also includes equipment, managing people , technology , information, and all the other resources that is needed for the production of goods and services .
OM plays an important part in a company … One of the main examples of successful operations management in the retail sector is the operations management practices in ZARA .
Zara is the flagship brand of the Spanish fashion retail giant , who has had an phenomenal performance record in the recent years . The creator of ZARA is Amancio Ortega Gaona who built the foundations in Galicia , Spain and now it’s internationally known as the second largest clothing chain world-wide. Zara’s retail operation now extends to about 650 stores operating in 50 different countries . Zara contributes about 2/3 of the company’s sales making it without a doubt the firm’s growth engine .
Information Systems: Most of the designs are finished by using CAD. This is a main reason for making the manufacturing process fast . ZARA invests very much on technology in order to aid in the flow of information . Zara’s managers posses hand held PDA , and they use it to send information like sales figures , order placing and customer feedback to the head office in La Coruna . Based on this designing team confirms the design and sends them across to manufacturing units where in CAD is used to manufacture the products.
The designers send their design suggestions to distribution and to factory department , by scanning a design into a computer and electronically transmit to factory computers including computers controlled cutting equipment . Designers input the designs patterns into CAD systems which automatically feed into the cutting machines in the factories ensuring the required quality of outputs and having a minimum fabrics waste .
Fast speed of production: Zara has the skills to transform a fashion concept and place finish products in the stores within 2 weeks .
Centralized Logistics and Distribution : Zara controls and optimizes through different steps of the supply chain, not within them , even though it may increase costs at some steps , ” Zara sticks to a predictable , deep , and fast rhythm , based around order fulfillment to stores .” says Professor Ferdows .
There are two orders in a week from each store on particular days and hours, with shipments in La Coruna usually prepared overnight . Trucks leave at specific times and shipments arrive in stores at specific times . Garments , are pre-hung, already labeled and priced . It’s interesting to come to know that Zara can get the product from the idea to the store in 15 days time , where the standard in industry is 6 months , the design and production process is very effective and harmonized to the use of the different methods that suites their line of business and set new model to look for .
Employees at Zara : Employees at Zara is one of the major reasons for the effective response system of Zara . The HR policies turn around high level of employee motivation . Zara believes in hiring young people with creativity.
Human resource management : At ZARA ‘s the human resources are one of the components behind the unique effective and with a quick response system . People are very motivated which reflects Zara HR policy . Zara while hiring young people , also provides training and fair incentive schemes which result in high and effective communication . People at Zara also sell and market the name and represent the fashion. The store manager we met at Zara was dressed in a fashionable way. “We sell fashion”, he says. People plays a vital role in Zara business model whether designers, buyers, logistics and sales staff. For example the store manager is a key player of the decision to make a specific model .
Zara’s strong supply Chain Management : To have a successful operated chain of supply , now has become a critical element for companies to possess . Its becoming key success factor for companies . To analyze Zara’s supply chain , it’s interesting to look at the design of product , the inventory management , evaluation of suppliers, time scheduling, material management , information systems that are the key contributors in allowing Zara to offer cutting edge fashion at reasonable prices .This information will reveal how ZARA has the ability to produce high-quality products at competitive prices , in compare to it’s competitors . Their higher supply chain management enables the retailer to deliver goods within 24 h of the receip of order at its European stores and 40 hours at its American and Asian outlets .Nowdays the company’s logistic department employs more than 5000 people and distributed 697 million clothing , in the financial year of 2008 .
Design and Production : For creating its designs for fashion , Zara uses concurrent designing process which merge members from the entire organization structure . The company has the ability to hold and push the boundaries of fashion trends , and yet still support to all demands within an integrated system of a controlled design program .