Reference no: EM133185727
Based on the information below, how would you make a press release? How would it look like?
The excess inventory at ZARA is $250,000,000. Sounds like a lot of extra cloth for some designers' work space. This problem does not seem to have a strong connection to the business that Zara is in because they sell clothes to customers and this text is simply saying that there is too much clothe in their physical location.
Excess inventory and underinvestment are key challenges to creating a great shopping experience, and Zara manages these two issues in different ways. First, Zara places a high priority on predicting their future sales patterns to accurately forecast how many items it needs to order from their suppliers. They use sales history data, purchase orders made by competitors, and the number of recent store openings to predict demand for each item. Instead of holding lots of extra inventory or ordering too few items, Zara has been able to predict demand regularly and reduce drastically their amount of excess inventory held by stores. "
It is important to manage inventory levels in order to predict customer demand and reduce waste. Taking into account the projected growth of their online business, Zara would need to make changes to their supply chain management in order to meet these demands. It is important for them optimization the number of distribution centers in use, transportation modes, and warehouse management systems. Using EDI systems (electronic data interchange), Zara can transmit current and future forecasted inventory demand from their main offices to regional distribution centers, which allow customer orders to be prepared for shipping as soon as a product reaches the DC (finished goods product level). The benefit that this provides is that products flow through the system faster and there is less product "float time" within the system. Above all else, it will allow Zara to have the right quantity of product on hand at all times by anticipating customer demand in their target markets.
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