Spanish clothing and accessories retailer Zara has been mentioned in this department frequently in the past few years. The company is famous for being able to receive an idea from a retail store manager and, as little as two weeks later, have the new product available for purchase. This continuous flow of new designs — rather than characteristic seasonal releases — is transforming the fast-fashion industry.
Zara is breaking the rules of retail, and it continues to report rising profits as a result. Businesses of all types and sizes can learn from Zara’s success. In fact, the lessons are very straightforward. They are, however, difficult to implement.
Today’s supply chain management professionals know that consumers want high-quality, reliable and increasingly customized products — and they want them quickly. This means the creative process must be integrated into the supply chain process early on in order to enable simultaneous design-and-build activities. But how can a typical manufacturer and its supply chain accomplish this very challenging goal in the real world?
To begin to answer that question, consider this story from former aerospace and defense (A&D) business McDonnell Douglas. Back in the 1990s, before its merger with Boeing, company decision makers launched a total quality management (TQM) and just-in-time (JIT) effort to address welding problems, vendor-management issues, and equipment maintenance and setup challenges. The business was having some success, and professionals on the supply chain side of things were pleased.
But one day, the sales and marketing leaders came to them and said: “It’s nice that you’re doing TQM and JIT, but that doesn’t really help us. Our current customers are demanding that we deliver a finished customized rocket in 12 months, not 24. We need you spending your time on figuring out how to do that — and helping us win future contracts in this highly competitive A&D marketplace.”
The supply chain folks simply couldn’t wrap their heads around this. Twenty-four months had always been just fine. Why the sudden change? They decided to just stick with the 24-month model and told their colleagues to “live with it.”
Clearly, there was zero consensus among those in senior management. And it didn’t take long for this discord to set in motion the ultimate collapse of the TQM and JIT initiatives.
McDonnell Douglas decision makers didn’t spend enough time together achieving thoughtful contemplation and clear planning about the purpose of the change they aimed to implement. Their real objectives should have been giving the customers what they wanted and being more competitive in the marketplace. Then, they should have walked back, step-by-step, to the start of their processes and figured out how to enable fast, customized operations from the start. Importantly, this tactic would have required bringing everyone together to collaborate on the design of any new deliverable.
The failure of an A&D company in the ‘90s has an interesting lesson for today’s supply chain management professionals: The difference between success and failure often comes down to leadership. Executives must remember to take a hard look at the current state of affairs in order to identify strengths and weaknesses. They must identify where changes can succeed, not just survive, and then force themselves to grind through the daily battles and issues of making those changes work. Just as Zara breaks the rules of retail, supply chain management leaders must break down silos and support cooperation and consensus.
Philip E. Quigley, CFPIM, PMP, is senior project manager at Ingram Micro and an adjunct professor in the department of management at California State University, Fullerton. He may be contacted at email@example.com.
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