The efficiency of supply chain management always relied on a factor whether to buy a product or make it. Buying is an outsource mechanism towards product acquisition and then resell it, whereas, making is the in house manufacturing of a product (Supply Chain Mechanics n.d). For instance, why Zara does not place its manufacturing plants in Asian countries where costs are less?
Zara’s manufacturing, despite being expensive in Europe, still holds a lot of potential towards growth, profitability and sustainability. Zara believes in an integrated system of business process where it manufactures and sell. This is called backward and forward integration. It makes a company able to develop the best strategic fit and gain complete control over the production and distribution of the product, which is why Zara is selling its products with 650 clothing stores in over 50 different countries (Strategic Direction 2005).
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