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The Operational Management Issues at Inditex Group Multinational Organisation

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The organisation Inditex Group, by having significant ownership of its production and sourcing models, achieves substantial cost advantages which can be passed back to customers through competitive pricing models. This is something that is not achievable by competition in this international fashion industry. Further unique to Inditex is that the business is able to procure approximately 40 percent of its raw fabrics utilised for innovative design and clothing distribution by purchasing products from yet another Inditex subsidiary (Ferdows, et al. ). Once the company has successfully produced its variety of fast fashion lines, yet another advantage is the ability of Inditex to utilise its five-story distribution hub in Spain to ensure timely and self-managed delivery of completed fashion products to its retail stores.

The distribution centre maintains a workforce of nearly 1,200 specialists, thereby further enhancing the ability of the company to meet its fast fashion goals and provide exclusive merchandise that is favoured by discriminating customers in many different target markets. Much of the efficiencies that have been achieved by Inditex are a product of a rigorous and well-developed human resources training model as part of operational strategy, allowing the majority of its inventoried merchandise to be ready for shipment within only eight hours of receipt at the main distribution warehouse.

Inditex maintains many different competitive advantages as a result of human capital development, thereby enhancing the ability of the organisation to meet its strategic promises for fast merchandise turnover and product exclusivity. Risk management is yet another capability that outperforms other competitors from an operational perspective. By having a leaner production system and one that decreases quantities produced and received, Inditex is able to control costs and decrease its total inventory risks (Sajwan, Sood, Arora and Ashwani 2010).   Other competition in this industry must be considerate along with the operational model as it pertains to inventory holding costs, which include lighting, taxation, personnel costs and warehouse space.

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