Continuing the story of a man, his dog, and … actually we’re continuing a conversation reflecting on the “10 Principles of Good Design” as applied to Supply Chain and Supply Chain Management (Design for the Supply Chain). The topic this week is Principle #2: Good design “Makes a product useful”, which states that, “A product is bought to be used. It has to satisfy not only functional, but also psychological and aesthetic criteria. Good design emphasizes the usefulness of a product whilst disregarding anything that could detract from it.” – ‘Dieter Rams: ten principles for good design’ Usefulness almost seems self-evident for the supply chain given the focus on ‘Continuous Process Improvement’, ‘Business Re-engineering’, ‘Cost Reduction’, etc. I think it’s in our blood to try and make supply chains efficient and effective. But what about the psychological and aesthetic appeal factor, that element that makes it fun and interesting both for the driver and the consumer of the supply chain? I think it’s that “blue ocean” thing – creating a supply chain solution that is differentiated and innovative enough to inspire those who manage it to take pride in making it stand out while at the same time providing real benefits to the customers of the supply chain. One supply chain that I have been enamored with for years that has most facets of its operations designed for and incorporated into its supply chain is the clothing and accessories retailer Zara. “Zara has over 2,000 stores strategically located in leading cities across 88 countries. Zara's designers and customers are inextricably linked. Specialist teams receive constant feedback on the decisions its customers are making at every Zara store. This feedback inspires Zara's creative team which is made up of over 200 professionals.” – Inditex Zara:
- Introduced the idea of fast fashion some two decades ago, then developed a highly centralized design, manufacturing, and distribution system built on an unconventional idea: speed and responsiveness are more important than cost.
- Is renowned for its ability to deliver new clothes to stores quickly and in small batches. Twice a week, at precise times, store managers order clothes, and twice a week, on schedule, new garments arrive.
- Designers, buyers, planners, and marketers are co-located in central command ("the Cube") and information about what’s selling, and what isn’t, flows in from store managers around the world, allowing designers to make quick changes to garments, buyers to order more (but not too much more—exclusivity sells), and planners to decide what items to cull from a store.
- Produces about 450 million items a year.
- Gets 85 percent of the full price on its clothes, while the industry average is 60 to70 percent. Unsold items account for less than 10 percent of its stock, compared with an industry average of 17 to 20 percent. Zara's Fast-Fashion Edge
Based on the above and other case studies and articles examining Zara’s operations, this is how I sum up their supply chain in terms of this second principle for good design:In terms of Industry 4.0, I’m curious to see how Zara embeds technologies such as virtual dressing rooms, computerized fittings, consumer self/co-design, and 3D-printed clothing into its supply chain. It will be interesting to see how they evolve (or find other blue oceans) as these technologies mature and competitors adopt them.