What is the agile system projects. Zara’s success story

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What is an agile project system

An agile project system is often associated with software development, but the truth is that it is often a method used for fast and effective business management. This is the case of the transformation that the fashion industry in the United States is undergoing under the term “ fast fashion ”, a new way of manufacturing, distributing and selling products on a large scale that is causing the country’s traditional brands to falter. North American.

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In this case, the leader of Fast Fashion is the Spanish brand Zara or, if we talk about a company, Inditex (as we explained in another article , its logistics are among the best in the world). Along with Zara, Uniqlo, Topshop and H & amp also carry this term ; M, who are currently competing in the North American market to overthrow indigenous companies.

This Fast Fashion is nothing new. And is that some experts have already smelled the threat for some time: According to  Forbes , in 2004 the Harvard Business Review defined the strategy followed by Amancio Ortega’s company as “questionable, if not complete madness” because “it defies the majority of rules about how logistics should be handled ”. And it is not for less, since  the company can design, produce and bring to all stores a collection in less than 15 days.

Despite the criticism, currently many experts have been able to verify the viability and success of the Galician company. Without going any further, Dr. Warren H.Hausman, a professor of management science at Stanford University, has praised the financial value of fast fashion to reduce unwanted sales and increase profits by 28%. Specifically, Zara takes advantage of 4 times more resources than most clothing brands thanks to its agile system.

Postponement or Postponement as an agile system

Zara’s Fast Fashion model takes advantage of changes in culture and the consumer, with financial results that do not stop improving. The key is the agile system of “Postponement” (or postponement ), which consists of postponing the creation or shipment of the final products as much as possible.

The demand for products that have a short life cycle (such as clothing) is very difficult to forecast (we do not know if a collection will be successful and customers will ask us for more). Projections for a group of products are generally more accurate than projections for individual products. For example, it is much easier to calculate total demand for a range of televisions than for a television of a particular model, size, resolution, and brand. In this sense, Inditex has managed to streamline its production system and logistics as much as possible to reach the customer in the shortest possible time. As it does?

The key is the constant feedback that exists between the headquarters of Arteixo (in Galicia) and all the stores in the world, which are in charge of constantly sending information about which garments are sold the most. From the moment a store orders a new shipment of clothing until it receives it, more or less 48 hours pass. First, the stores place an order with the headquarters thanks to a computer system. And after the commercial managers approve the order, the factories begin to cut and manufacture the garments. The basting of the clothing is carried out between Spain, Morocco, Cambodia and other countries, and then it is sent back to the headquarters. A quality control is carried out, and the clothes are ready to be sent from La Coruña to any part of the planet. This system of working to order and the speed of manufacturing have undoubtedly been the keys to making Inditex’s agile system unique in the world. 

If you are interested in learning more about agile systems to improve the effectiveness of business management, we recommend that you take a look at the  Postgraduate Course in Agile Project Management with Scrum, Kanban, Lean and XP  from IEBS. And if this article has been interesting to you, don’t forget to share!

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