Process improvement is the proactive approach of identifying, analyzing and improving existing business processes within an organization. One method of process improvement is the Lean business model. Lean is a strategy that strives to eliminate waste in product and processes while satisfying customer wants. Businesses that implement Lean generally receive positive returns like increased sales and goodwill. One of the largest retailers in the world, Zara is a leader in the Lean business model. In fact it’s known as the best example of Lean outside of the automotive industry.
Zara delivers fast fashion by an integrated design and production process. Lean or “Just in time” production basically means making only what’s needed, when it’s needed and in the amount needed. The goal is to eliminate waste, inconsistencies and unreasonable requirements from the production process which in turn improves productivity. Zara leverages lean by holding low stock and updating its collections continuously. Store managers order clothes and new garments arrive twice each week. This is in stark contrast to the two to three month turnaround time other retailers experience with stocking new styles.
How do they do this? Zara takes feedback from customers on what they like, dislike, why they returned certain items and what’s flying off the shelves. All this data is provided to designers, factories, and fabric suppliers to create products that have a higher propensity to sell. This method allows Zara to create up to 1,000 designs every month based on store sales and current trends. No one can deny that this process improvement method has changed the face for Zara. Lean has allowed Zara to be four-times more profitable than the average retailer.
Robinson, Nathan. “How Zara Used Lean to Become the Largest Fashion Retailer.” LinkedIn, 20 Nov. 2015, www.linkedin.com/pulse/how-zara-used-lean-become-largest-fashion-retailer-nathan-robinson/.