Last week, according to Forbes, Amancio Ortega, founder of the retail chain Zara, became the richest man in the world, surpassing even Bill Gates.
There is a lot of articles explaining how it is possible.
Of course, the reasons are more than one, but many authors agree that the principal is the speed of product updates in stores. New models appear in stores around the world at least twice a month. This has several advantages:
1. Buyers are accustomed to this frequency, visit Zara store much more regularly than competitors’ shops, where the collection is updated every season.
2. There is a constant feedback from the market. Models are sewn in small batches. If a model is sold poorly, it will not bring a big loss. If it is good – you can do more.
3. No need for a long-term planning. Focus shifted from sales planning to the production just-in-time, which is able to adjust to changing realities.
In the 21st century, not the big fish eats the small, but fast fish eats slow.
Gone are the days when clothes were designed and sewed in one place. Inditex is a global company now with factories around the world and a huge number of subcontractors. But even today a period of development of the model to its appearance on the shelves around the world does not exceed 2 weeks.
But how is it possible, with as many models (each model has several dimensions, and sometimes in different colors) to maintain this pace?
Sometimes it is necessary to add a new model, sometimes to make additionally already available…
In MRPEasy manufacturing planning software there are a few special features:
1. Enter the model one time, make it any number of times in any quantity.
2. If the new model is similar to the existing one, you can copy the old data (BOM, routing) and make needed changes. (Learn more about how MRPeasy helps manage BOM)
3. The production plan does not require fixing. At any time it is possible to add new production orders or modify existing ones.
4. Employees’ real time reports give a complete overview of the stage of production, resource utilization and availability of raw materials.
5. Secret Weapon: Matrix Bill of Materials (Matrix BOM). You can quickly add parameters (size, color, material) to the model and get a whole family. Matrix BOM allows specifying the model only once, to regulate the amount of material depending on the size and type of material depending on the colors and fabrics. To have 10 dress sizes in 5 colors and 2 different fabrics, you only need to enter one model instead of 100.
6. If your company already has developed to a significant size, the function of multi-site will allow you to monitor all factories and warehouses in one system.
Thus, Amancio Ortega has shown that effective management can achieve much, even without being a star of the Internet or fashion shows.