APICS Supply Chain Management Now

What’s Hot for Supply Chain and Operations Management

By APICS CEO Abe Eshkenazi CSCP, CPA, CAE - January 11, 2013

Abe Eshkenazi Photo

APICS CEO
Abe Eshkenazi

CSCP, CPA, CAE

In APICS Operations Management Now, I usually write about the latest trends in supply chain and operations management__not the latest trends in fashion. However, Fortune features a story this week that combines both subjects: “Meet Amancio Ortega: The Third-Richest Man in the World.” 


Ortega is the founder of the Inditex Group. Zara is Inditex’s flagship brand, and it is a fashion powerhouse. In fact, it’s the world’s largest fashion retailer, with a presence in more than 80 countries. “Ortega built his empire on two basic rules,” Vivienne Walt writes. “Give customers what they want, and get it to them faster than anyone else.”

Ortega didn’t develop his fashion business the traditional way, via Paris, Milan, and New York. He created his in Galicia, Spain, using optimal supply chain and operations management ideas. These ideas are working. Though Spain is in the midst of its worst recession in years, Inditex announced in December that its revenue was up 17 percent, or $14.6 billion, for the first three quarters of 2012. “So far, the growth shows no signs of slowing,” Walt writes.

As with any success story, others hope to copy it. Fortune reports that in August 2012, shares of the fashion company Esprit rose 28 percent when the company announced its new CEO, who once was Inditex’s distribution and operations manager.

Still, Ortega’s success comes from more than supply chain and operations management. This successful businessman pays attention to the customer. According to Walt: “By 16, Ortega had concluded that the real money could be made giving customers exactly what they wanted, quickly, rather than buying up inventory in the hopes would sell. To do that, he needed to figure out what people were looking for, then make it. He would need to control the supply chain.”

By all accounts, Inditex still embodies Ortega’s two basic priorities__customer focus and speed. Therefore, it’s not surprising that a company spokesperson calls the logistics department “the essence of the company.” Walt reports the Inditex logistics department occupies a building that is three times the size of the company headquarters across the street. From this location, unique orders are dispatched to every Zara store in the world. And the delivery time is impressive: 24 hours for Europe, the Middle East, and much of the United States; 48 hours for Asia and Latin America.

Customer focus and speed at the height of fashion


Consider how Zara has successfully focused its business on customer satisfaction. APICS can help you and your company achieve success with the customer in mind. One way is through APICS conferences. I’m proud to announce the theme for the 2013 APICS International Conference & Expo, “The Supply Chain Experience: Leveraging the Power of the Customer. ”I hope you will attend APICS 2013 in Orlando, Florida, September 29-October 1, 2013. The educational program will provide participants with strategies for increasing customer engagement and building sustainable, profitable relationships__all while reducing costs and managing risk.

Visit apicsconference.org for more information about attending or presenting at APICS 2013.

Questions for discussion

How do you enable your company to get customers what they want fast?
Do supply chain and operations management executives make good candidates for CEO positions?

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