The Supply Chain Revolution

CEO Indifference

Most executives pay little real attention to sourcing and supply chain management, areas of business that may not seem as sexy as R&D, product development or marketing. Companies don’t seem to care as much about back-office operations and delay investments in improving or enhancing them. Sourcing and supply chains have been in virtual stasis for the past two decades. Modern supply chain management has changed little since the 1940s, when superior US supply chain management played a major role in the defeat of Germany, Italy and Japan in World War II.

Companies that focus on developing intelligent, efficient sourcing and building their supply chains can eventually dominate or notably affect their sectors. The term “supply chain” covers the processes that unfold when companies “take material from suppliers, move it through manufacturing, and then distribute it to customers or end users.” The term “sourcing” refers to the selection and purchase of goods or services from suppliers and vendors. Superior sourcing and supply chain management grant a competitive edge.

How Zara Does It

With 6,777 stores in...