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328 Chapter 11 • Supply Chain Management

fabric, cut, and price points of a new garment. As a result, the company can spot trends
early on—a rather critical quantity in fashion retailing—and adjust stock accordingly
within days.
The second area is standardization of product information. Different or incomplete
specifications and varying product information availability normally add several weeks to a
typical retailer’s product design and approval process. Zara, however, stored the product in-
formation with common definitions, allowing it to prepare designs quickly and accurately,
with clear-cut manufacturing instructions.
The third area is product and inventory management. Its inventory management
system is able to manage thousands of fabric and trim specifications, design specifications,
and physical inventory, which gives Zara’s team the capability to design a garment with
available stocks, rather than having to order material and wait for it to arrive.
Zara’s distribution management approach is its final advantage. Its state-of-the-art
distribution facility functions with minimal human intervention. Approximately
200 kilometers of underground tracks move merchandise from Zara’s manufacturing plants
to the 400-plus chutes that ensure that each order reaches its right destination. Optical
reading devices sort out and distribute more than 60,000 items of clothing in an hour. Zara’s
merchandise does not waste time waiting for human sorting.

CASE 2: THE LIMITED BRANDS
Source: Based on: The Limited Designs Supply Chain to Begin and End with the Customer, Baseline Magazine,
April 3, 2006.
Founded in 1968, Limited Brands now is the holding company of Victoria’s Secret,
Express, Bath & Body Works, C.O. Bigelow, The Limited, White Barn Candle, and Henri
Bendel. In 2005, the annual sales of Limited Brands reached $9.4 billion. Limited Brands
achieved its expansion of brand and growth on the sales and market over the years through
the active acquisitions of different retail companies. As the result of acquiring so many
stores and brands, Limited inherited a complex hodgepodge of IT systems and software,
including 60 major systems running hundreds of applications, many of them redundant, on
numerous platforms. Many of these platforms (e.g., Hewlett-Packard HP-UX, Sun
Microsystems Solaris, and IBM OS/390 and AS/400, as well as Intel-based servers and
Tandem computers) are still in place today. Given the complexity of the company’s IT
operations, Limited’s ability to stay on top of its supply and demand chains was going to be
a challenge.
The situation became acute beginning in 2001. Discount retailers started encroaching
on Limited’s market space. In response, the company began shifting to a high-end product
line that would generate better profit margins. To make this new strategy work, however,
Limited needed new supply chain technologies and processes to drive the speed-to-market
requirements of the new growth strategy—what Leonard A. Schlesinger, Limited’s vice
chairman and chief operating officer and a former Harvard Business School professor, has
described as “integrated brand delivery” (i.e., integrating and leveraging the supply chain
and logistics supporting a brand for maximum value).
Limited Brands buys merchandise from more than 1,000 suppliers worldwide and
sells through multiple channels retail stores, the Internet, catalogs, and third parties. An