Physical Distribution Logistics Management -Myassignmenthelp.Com

Question: Discuss About The Physical Distribution Logistics Management? Answer: Introduction Logistic and supply chain management refers to the necessary activities undertaken by the organization for distributing the products and services to the potential clients. According to Stadtler (2015), an organization can achieve the success by improving the effective logistic and supply chain process. Strive for achieving the competitive position has become the common focus for the internationalized entities. These companies look for the best approach to develop the value added aspects that can feed the needs of the potential customers. It is to be indicated that every organization adopt the unique approach while structuring their logistic and supply chain management process (Stevens and Johnson 2016). The innovative process developed in this context is much useful to improvise the brand value of the product and services. Moreover, the most effective distribution strategy utilized by the organization determines the significant return on the profitability parameter. The study develops the ideas about the systematic approaches undertaken by Zara, the renowned fashion retail company, to accomplish the business goals and achieving high profitability rate. It is essential to identify the sequential and systematic approaches used by Zara that eventually led the company towards achieving success. Furthermore, the study would also discuss the method used by the company to strengthen the competitive position and maintain the long term sustainability. The comparison would be developed to identify the effectiveness of the strategic implementation that created more values for the company to retain the competitive position in current business scenario. Logistic and Supply Chain Management of Zara The continuous development in the global business scenario is developing more advanced methods of achieving profitability. Accordingly, the organizations face considerable challenges to remain competitive in this advanced world. In fact, the changing demands of the customers are also hindering the organizational functionalities. Therefore, it is noticed that the companies worldwide strive to meet the expectation level of the customer for establishing the long term sustainability (Ross 2015). Value added services are thus utilized extensively to strengthen the competitive position. Some of the organizations achieve success to develop the most innovative value added services whereas some fail to address the basic demands. Zara is one of the fastest growing fashion retail companies that have the remarkable global presence (Srinivasan and Swink 2017). It is observed that the most efficient supply chain process has led Zara towards accomplish the success much remarkably. In many of the ca ses, it has been noticed that the other apparel companies struggle with their fashion lines, which affect the brand value of the products. Zara is quite efficient in managing such hindrance by developing the most effective distribution and logistics process. This section of the study would provide the clear insights about the systematic approach undertaken by the company to develop the best supply chain management. It is notable that the sequential and efficient supply chain management of Zara is the key to achieve the competitive advantage. The company develops the following activities to manage the entire distribution and supply chain process. Synergy between the operations strategy and business The overreaching strategy of Zara is to achieve growth through vertical integrations and product diversification (Srinivasan and Swink 2017). In order to establish a unique approach, the company adapts the manufacture, couture designs, distributes, and retail clothes within two weeks of the first appearance of the clothes in the catwalk. The company promotes the idea of fast fashion, which is one of the most considerable factors for developing the remarkable brand identity. Just in time production Zara, the retail giant, offers the potential customers trendy and fashionable clothes of various tastes through an integrated and controlled process- just in time. The company keeps the in-house production amount and ensures to reserve almost 85% of the entire capacity for the in-season adjustments (Qrunfleh and Tarafdar 2014). It is also noticed that the company maintains the high level of sophistication in fabric sourcing, sewing facilities, and cutting process that are performed in headquarters in Spain. The high wages of the European workers are also quite motivating for ensuring the productive outcome. Efficient and secured inventory management Zara warehouse contains extra inventory or deadstock for the supply chain process. The company follows the lean supply management in managing all the way from the raw materials to the finished garments. The company utilizes the inventory optimization model to determine the quantity, which are to be delivered to the retail stores (Lu, 2014). The products are delivered twice in a week via shipments. The maintenance of such effective inventory process helps the company in building up the effective brand image while avoiding the unpopular stock. Commendable Distribution Network The strong distribution network of Zara enables the commendable method delivering goods to the European stores within 24 hours and to the Asian and American stores within 40 hours. This effective distribution network creates the buzz among the customers and develops the greater brand value. Successful Fast Fashion The extensive research on the brand success highlights that the company has achieved the greater success in the operation management. The cross-functional operation strategy is coupled with the sequential supply chain process, which is vertically integrated. It enables the mass production even under the push control that lead towards the well-maintained inventory system (Farahani et al., 2014). In addition to this, Zara has achieved the immense success in lower markdowns, value creation for the shareholders, and the higher profitability as well in both short and long term. The above discussion suggests that Zara, being the fashion retail giant, maintains the updated trends in cloth manufacturing process. The company has captured the leading position in offering the hottest trends and exuding the exclusive fashion segment. The most commendable logistics are yet to be explored by many of the organizations. However, the company keeps the focus on the concerned areas of the customers when they purchase any trendy garment. The updated fashion quest is the major concentration that has led the company towards establishing the most effective logistics and supply chain process. Reasons for success of Zara Zara along with Dell are the most popular and ideal examples of successful implementation of their logistics management in the world. However, there are various reasons behind the success stories of these two companies (Leonidou et al. 2013). On the other hand, Myer is having the history of failed logistic and supply chain management. Thus, in order to determine the reasons for the success of Zara and Dell, the logistic strategy of Myer will also be discussed. Distribution strategy of Zara Zara is known for their fast fashion concept. Implementation of fast fashion concept involves effective distribution and logistics strategies for them. One of the key strategies being initiated by them is the absence of intermediaries between the manufacturing units and the retail stores (Kim 2013). It helps them to manufacture the fashion items according to the recent trend that are being identified from the customers. Moreover, absence of the subsidiaries also helps Zara in involving less time in transporting the goods from the manufacturing unit to the retail stores. Thus, it helps them to offer the latest products from their stores in minimal time. Distribution strategy of Dell While, Zara relies on providing the latest fashion trend to their customers, the key objective of Dell is to provide the best quality products to the customers in least price available (Pollard, Chuo and Lee 2016). Moreover, customers are having the option of customization in order to design their product according to their specification. In this case also, Dell do not maintain any intermediaries or storing facilities, rather they directly take the specified orders from their customers and source from their suppliers accordingly. This helps them to provide customized products to their customers. Distribution strategy of Myer Apart from the distribution strategy of Zara and Dell, the distribution strategy of Myer is more conservative and traditional in nature. Myer is having Omni channel concept of marketing with having their presence in both online and offline markets. However, they follow traditional distribution strategy of having intermediaries between the manufacturing facilities and retail stores (Homburg et al. 2015). Thus, they involves more time in delivering the latest products to their customers compared to their competitors. Comparison of distribution strategies One of the key reasons of the success of Zara and Del over Myer is the customer centric approach. This is due to the reason that, distribution strategies of both Zara and Dell are customer oriented and they are flexible enough to adapt the change in the trend and requirement of the market (Borland and Lindgreen 2013). Due to not having any intermediaries, Zara manufactures the fashion items according to the latest trend and transport them quickly to their stores. On the other hand, distribution strategy of Dell is more flexible due to the reason that, they do not have the manufacturing facility (Chen, Olhager and Tang 2014). Dell is just passing the requirement of the customers to their suppliers and providing the products accordingly. However, it is not possible for Myer to quickly adapt to the change in the market due to having their own storing facilities and maintaining of huge stocks. Another reason of success for Zara is the cost leadership. Zara gains cost leadership by not having the intermediaries between their manufacturing and retail stores. Moreover, having the entire production and operational processes under same facility helps them to reduce the cost involved in transportation (Teeratansirikool et al. 2013). It helps them to increase the profitability in the market. On the other hand, Dell is gaining cost leadership by not having own manufacturing hubs. Moreover, sourcing of the materials is being done by them from different suppliers, which further segregate the price. However, distribution strategy of Myer is less flexible towards gaining cost leadership due to the reason that, they are having intermediaries, which involves more cost and time (Kurt and Zehir 2016). Moreover, the manufacturing facilities of Myer are not centralized and thus, a good cost is involved in inbound and outbound activities from their manufacturing facilities. Similarities of the distribution strategies The distribution strategies of Dell and Zara are having various similarities over Myer. One of the key similar strategies being identified between these two companies is the flexible distribution process (Qrunfleh and Tarafdar 2014). Distribution process of both the companies is flexible enough to quickly adapt with the changes in the trend and requirement of the customers. However, the distribution approach of Myer is also customer oriented, but they are not flexible enough compared to Dell and Zara. Another similar strategy being identified is the gaining of competitive advantages from the market with the help of the distribution process more than the marketing process (Czajkowska and Stasiak-Betlejewska 2015). This is due to the reason that, Dell and Zara gain competitive advantages from providing customized products and latest fashion lines respectively to the customers. However, on the other hand, various marketing activities such as pricing and offering discounts to the custome rs help Myer to attract more customers. Thus, the importance of distribution strategies is different between Dell, Zara and Myer. Implementation of successful distribution strategies The effective distribution strategies initiated by Zara and Dell can be implemented on other companies also. This is due to the reason that, in the current business scenario, majority of the business organizations are having customer oriented business approach. Thus, having the distribution process with customer centric approach will help them to adapt to the change in the market effectively (Tax, McCutcheaon and Wilkinson 2013). Moreover, the current business scenario is more competitive in nature and thus according to the porter generic strategies; cost leadership is one of the key sources of gaining competitive advantages (de Oliveira Teixeira and Werther 2013). Hence, from the initiation of the distribution strategies of Dell and Zara, contemporary business organizations will get benefited from having cost leadership in the market. Recommendations One of the key sources of gaining competitive advantages for Zara is the initiation of the sustainable development. This is due to the reason that, in the current business scenario, sustainability is one of the key issues being faced by the business organizations. Thus, having the environment friendly materials in the products will help them to create distinctive marketing activities along with enhancing the ethical impression of the brand. Thus, it will help Zara to attract more footfalls in their retail stores. Another recommended step to gain competitive advantages for Zara is outsourcing of their manufacturing facilities. In the current business scenario, outsourcing is one of the most popular concepts being practiced by the business organizations in order to gain cost leadership in the market. This is due to the reason that, outsourcing the manufacturing activities will reduce the cost of production significantly and thus, it will help Zara to enhance their profitability in the market. It is also being recommended that, market development will also be one of the key sources of gaining competitive advantages in the market. This is due to the reason that, in the present situation, Zara is having their market presence only in the metropolitan cities around the world. However, in the recent time, various cities mainly from the developing countries such as India and China are rapidly developing. Thus, it will be effective for Zara if they can have their market presence in the Tier II cities. These markets are still being untapped and being the early bird will help Zara to have the entire market for operation. Thus, this will leads to the increase in the market coverage for them along with gaining more customers base and brand exposure. Conclusion Thus, from the above discussion, it can be concluded that, Zara and Dell is having effective and efficient distribution strategies, which helps them to gain competitive advantages in the market. This report discussed about the factors that distinct Zara from their competitors in the market. One of the key reasons identified is the flexible distribution strategy of Zara, which is also similar with Dell. Distribution process of both these organizations is being designed in such a way that, it will quickly adapt to the change in the business and market requirements. Thus, they are offering products according to the recent trend in the market. This report also discussed about a few recommended steps that will further help Zara to gain competitive advantages in the market. Reference Borland, H. and Lindgreen, A., 2013. Sustainability, epistemology, ecocentric business, and marketing strategy: Ideology, reality, and vision.Journal of Business Ethics,117(1), pp.173-187. 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