retailer. In $2009,$ Inditex neported sales of about $11$ billion earos from more than $4,700$ retail outlots in about $76$ countries, In an industry in which customer demand is fickle, Zara has grown rapidly with a strategy to be highly responsive to changing trends with affordable prices. Whereas design$-$to$-$sales oycle times in the apparel industry have traditionally avernged more than six months, Zara has achicved cyclo times of four to six weeks. This speed allows Zara to introduce new designs every week and to change $75$ percent of its merchandise display every three to four weeks. Thus, Zarn's products on display match customer preferences much more closely than the competition. The result is that Zara sells most of its producis at full price and has about half the markdowns in its stores compared to the competition.

Zara manufactures its apparel using a combination of flexible and quick sources in Europe $($mostly Portugal and Spain$)$ and low$-$cost sources in Asia. This confrasts with most apparel manufacturers, who have moved most of their manufacturing to Asia. About $40$ percent of the manufacturing capacity is owned by Inditex, with the rest outsourced. Products with highly uncertain demand are sourced out of Europe, whereas products that are more predictable are sourced from its Asian locations. More than $40$ percent of its finished$-$goods purchases and most of its in$-$house production occur after the sales season starts. This compares with less than $20$ percent production after the start of a sales season for a typical retailer. This responsiveness and the postponement of decisions until after trends are known allow Zara to reduce inventories and forecast error. Zara has also invested heavily in information technology to ensure that the latest sales data are available to drive replenishment and production decisions.

In $2009,$ Inditex distributed to stores all over the world from eight distribution centers located in Spain. The group claimed an average delivery time of $24$ hours for European stores and up to a maximum of $48$ hours for stores in America or Asia from the time the order was received in the distribution eenter $($DC$)$ to the time it was delivered to the stores. Shipments from the DCs to stores were made several times a week. This allowed store inventory to closely match customer demand.

The following questions raise supply chain issues that are central to Zara's strategy and success;

What advantage does $7$ ara gain against the competition by having a very responsive supply chain?

Why has Inditex chosen to have both in$-$house manufacturing and outsourced manufacturing? Why has Inditex maintained manufacturing capacity in Europe even though manufacturing in Asia is much cheaper?

Why does Zara source products with uncertain demand from local manufacturers and products with predictable demand from Asian manufaeturers?

What advantage does Zara gain from replenishing its stores multiple times a week compared to a less frequent sehedule? How does the frequency of replemshment affect the design of its distribution syskem?

Do you think Zara's responsive replenishment infrastructure is better suited for online ales or retail sales?