In Spain customers visit Zara stores 17 times per year on average compared to 3 times per year for competitors. Because their clothing designs change often, it is harder for people to see them clearly on the Internet and thus they are encouraged to come into the stores instead and try on the unique fashions that Zara offers.

Suzy Hanzel, production technician associate, Zara Clothing Company

Agents for the company are always scouting out new fashion trends at clubs and social gatherings. When they see inspiring examples they quickly send design sketches to the garment designers at the Cube. New items can be designed and out to the stores in 4 – 6 weeks, and existing items can be modified in 2 weeks. Clothing items are priced based on market demand, not on cost of manufacture. The short lead times for delivery of unique fashion items combined with short production runs enable Zara to offer customers more styles and choices, and yet still create a sense of urgency to buy because items often sell out quickly. 

The company’s core market is women 24 – 35 years old. They reach this market by locating their stores in town centers and places with high concentrations of women in this age range. Short production runs create scarcity of given designs and that generates a sense of urgency and reason to buy while supplies last. As a consequence, Zara does not have lots of excess inventory, nor does it need to do big mark-downs on its clothing items. Zara has 12 inventory turns per year compared to 3 – 4 per year for competitors. Stores place orders twice a week and this drives factory scheduling.

Inventory visibility is crucial. Warehouse inventory has to be able to interface with the production side of the business and they have to be able to connect within the supply chain to know what is in the warehouse and what is on a truck or stored in a trailer.

Dave Bushee, vice president of logistics technology, Penske Logistics

As part of its work, Penske manages one 150,000-square-foot internal distribution center and one 400,000-square-foot external distribution center. It provides receiving, storage, sequencing, kitting and repacking. Penske handles large parts and modules as well as shipping racks and the trailer yard. Penske also designs and produces the material sequencing racks in-house, saving production space and reducing downtime.

The actions inside a distribution center are the catalyst for speeding deliveries, managing inventories and cutting costs. Penske’s proprietary technologies track the flow of inventory through and around the distribution center, monitor product velocity, and provide advance notice of arrivals. Since coming on board, Penske has focused on reducing and controlling inventory, improving the receiving area and boosting productivity. Penske leverages a data repository that provides a single, high-level, comprehensive view of the manufacturer’s overall operations, which allows the team to increase efficiency. Information about incoming and outbound products can be transmitted electronically between supply chain partners, and the information is automatically loaded into the core system.

Creating a positive experience for the distributor’s customers started with improving visibility and communication. Success within the supply chain depends on connectivity, and technology suite ensures everyone involved in a shipment has visibility into what is happening.

Lora Carson, join CEO, Warehouse Company

The distributor turned to Logistics to help streamline and improve its deliveries to warehouses, houses, job sites, apartments and businesses. The partnership has allowed the distributor to improve customer service, reduce the size of its in-house fleet and tap into dedicated capacity. Utilizing expertise also enabled the distributor to focus on its core business rather than transportation concerns.

The distributor’s parent company uses transportation-as-a-cost-of-sales as a metric to compare business units, so managing costs is critical. ClearChain technology allows customers to centralize their data, giving them the ability to see and understand their total transportation spend. The technology has also helped optimize the network and streamline deliveries, driving overall cost savings. Moreover, the distributor saw added value in efficient, professional drivers that arrived at its customers’ sites on time. As part of its communication, team members from Logistics and the distributor meet regularly to discuss metrics, data analysis, priorities and plans. The increased visibility enables data-driven decision making, and regular meetings give both parties clear direction for the future.

The simple rule in traditional supply chains was to store “maximum possible quantity of every product, everywhere, every time”. This rule had to be followed because of lack of information flow and planning mechanisms in the supply chain.

Bill Carston, warehouse selector, Deliver Group Company

Supply chains have evolved and are much different from what they used to be say 2-3 decades back. Modern supply chains equipped with better information & intelligence are able to predict product demand well in advance, plan accordingly and deliver the items close to when they are needed.

You now know the stark difference between a warehouse and a distribution center and how the evolution happened over time. Does this mean that warehouses no longer exist or they don’t serve any purpose? You will be mistaken if you believe that. Warehouses still exist and serve a purpose. A good example would be how inventory is pre-built months in advance to meet the high seasonal demand and is stored in typical warehouses before being sent to a distribution center for customer service. However, the importance of warehouses in supply chain has gone down and the distribution centers have now emerged as the nerve centers of the modern supply chains.

Our report brings together threat and intelligence data from BSI’s supply chain security country risk intelligence tool, SCREEN and Moovit’s insurance risk management and loss prevention insights. We aim to engage in a proactive approach in preventing cargo crime and also minimising the financial loss resulting from cargo crime.

Mike Yarwood, shipping & warehouse lead, Moovit

South America topped the regional analysis with a whopping median value of $77,000 per theft, followed by Europe, USA, MEA, and Asia. While the research found that there were commonalities in the modalities involved and in the commodities targeted, there was some variation in the median value of the cargo affected. In terms of the types of cargo theft itself, Slash and Grabs had the biggest percentages 26% and hijackings accounting for 17%.

Hijacking was the most common method used in North and South America at 37% and 52% respectively whereas in Asia, theft from a facility was the most common at 43% compared with just 19% from hijacking. Insider threat has been identified by this report as a common vulnerability across the globe.. As organisations evolve and are becoming more and more secure in terms of cybersecurity, access controls etc, the recruitment of insiders becomes a more attractive option for those attempting to gain access.

 The closer packaging facilities are to manufacturing operations, distribution centers, or end destinations, the more cost effectively you can transport products.

Henry Philips, CEO of HAVA Logistics Inc.

SEKO’s solution was to implement a full distribution service for Cath Kidston with product dispatches twice weekly to all 27 stores across eight regions. SEKO shipped 370,000 units of stock from its Hong Kong DC in the lead-up to the reopening of the stores, using dedicated vehicles to fully stock each store within a 24-hour window. To eliminate any delays, SEKO also installed x-ray equipment to meet Japan’s strict quality control requirements.

With every store opening its doors to the public on time, Cath Kidston called on SEKO’s support again for the opening of a further two stores in Japan, with both ready for the Spring-Summer 2016 product preview. Japan is now Cath Kidston’s biggest market outside of the UK. The relationship is set to continue with more new stores in the pipeline.

Wondering if it’s time to add value to your supply chain? Duane Sizemore, senior vice president, marketing and business development with Saddle Creek Logistics Services, examines how value-added services can benefit your business.

Luis Barton, Vice President of Global Logistics Solution

Get products shelf ready. Value-added services such as price marking, tagging, and display building help to streamline the process of getting products on store shelves. Enhance customization capabilities. Personalization is one of today’s hottest trends. Want to offer a choice of embroidered logos on apparel? Allow customers to choose the face plate for their cellphone? Value-added services can help you deliver.  With the ability to customize products, you’re able to stock fewer SKUs, thereby reducing the cost of carrying and managing inventory.

With automated solutions and careful review of supply chain processes, value-added services can help eliminate downtime and reduce the number of touches required in the packaging process—ultimately saving money on labor. Incorporating value-added services can be challenging. Experienced 3PLs can be valuable allies. They offer the flexibility and resources to accommodate unique requirements, seasonal fluctuations, and business growth. Many of today’s 3PLs approach value-added services with a spirit of collaboration.