In a bid to ensuring that the relationship between suppliers, consumers and producers is one that yields profits, companies and organizations have to stay committed to the principles surrounding supply chain management.In a bid to understand the direct impact of supply chain management on the running and development of organizations, Zara has been chosen to be a focal point in this essay. This essay will critically analyze the supply chain system in place at Zara and how best it is working. It would also discuss the weaknesses of the organization’s supply chain system and how it can be improved. Zara as a fashion retail organization has been chosen by the writer purposely because of the organization is fast developing attention among reviewers who have supply chain management as their focus. Such reviewers as Kasra Ferdows, Michael A. Lewis and Jose A.D. Machuca of Harvard Business Review place premium on the recent successes that Zara is recording with its retail of fashion products. The cause of success has been linked to the company’s supply chain system. In the view of Ferdows, Lewis and Jose (2005), “Zara has hit on a formula for supply chain success that works.”One critical area of retailing, of which Zara as a retail organization is inclusive is the concept of make-buy decision. Make-buy decision would be especially useful for discussion as far as Zara is concerned because Zara is into retail of fashion products, of which it has the choice either to manufacture its products or to purchase them. According to the Encyclopedia of Management (2010), the make-or-buy decision is the act of making a strategic choice between producing an item internally (in-house) or buy it externally (from an outside supplier).” Applying the principles of the make-buy decision to Zara, it can be inferred that for the organization to make a decision whether to buy or make should be backed by carefully scrutinized strategic analysis. This is seen in the definition given by the encyclopedia, making mention of the word ‘strategic’.
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