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Inditex: where does the textile giant manufacture? | EXPANSION

11:21 Inditex: ¿dónde fabrica el gigante textil? | EXPANSION Inditex: ¿dónde fabrica el gigante textil? | EXPANSION

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The firm works with a network of 7,210 factories concentrated in twelve clusters to execute a business model that seeks to respond quickly to the market.

The process is vertiginous. Just one hour after any Zara manager in the world places an order for merchandise, the group's head office analyzes its stock and needs to give it the green light. Two hours later, the logistics area begins to prepare it, and in eight hours it has already left the warehouse. The company delivers orders to any of its stores around the world in a maximum of 48 hours, regardless of whether they are located in Malaga or Australia.

Few such global companies have a production structure as centralized as that of Inditex. The Spanish textile giant sells more than 65,000 references a year in its more than 7,500 stores located in 96 countries. But, in contrast, the group concentrates the creation of its products -through its more than 700 designers-, their manufacture -95% is produced in 12 countries- and its logistics system -all garments go through one of its 12 warehouses in Spain-.

The production structure with which Inditex works responds to its business model, which is based on flexibility to quickly respond to the market in an integrated manner, both in store and online. Although each of its brands creates a collection per season, A large part of the chain's success is its ability to react in record time: it takes less than three weeks from when it detects a trend until it brings the products to its stores that respond to it. This translates into a great capacity to constantly renew the offer of the establishments, twice a week.

centralized structure

Inditex: ¿dónde fabrica el gigante textil? | EXPANSION

Does it make sense to produce in China and bring the product to Spanish logistics warehouses if it is later going to be sold in China? In the Inditex model, yes. The company, which only has 10 of its own factories in Arteixo (A Coruña), works non-exclusively with 7,210 plants around the world that produce all its designs, but 95% of everything the company sells is made in just 12 Countries: Spain, Portugal, Morocco, Turkey, India, Pakistan, Bangladesh, Vietnam, Cambodia, China, Argentina and Brazil.

China is the country with the most factories that work for Inditex, with a total of 1,866 plants that employ 406,733 people, followed by Turkey, with 1,459 factories, and Portugal, with 1,344. For its part, although in Bangladesh it only has agreements with 296 factories, these are larger than those of other countries and employ more than 540,000 people.

The numbers are important, but even more so the philosophy behind them. The group has generated production clusters in these twelve countries that bring together suppliers, manufacturers and brands. It is about creating a work ecosystem in which the entire supply chain works together, in a coordinated and flexible way.

For example, 57% of Inditex's production is grouped into what the company calls proximity (Spain, Portugal, Morocco and Turkey). It is in these nearby countries where the articles most associated with trends and clothing are produced, which favors the group being able to react quickly to their needs in the store, while other more basic products that are not going to be so affected for what becomes fashionable at all times they are made in more distant markets.

The concentration is not only geographical but also productive. Each cluster is specialized in different types of products, materials or production methods, which increases efficiency. Of the 7,210 factories that work for Inditex on a non-exclusive basis, the main ones in number are clothing factories (4,360), followed by fabrics ( 1,026), tinting and washing (650), finishing (643), cutting (326) and printing (205).

Lastly, the concentration of factories and suppliers with which the textile chain works has one last added benefit: it makes it easier to control them. The group has more than 3,000 people, both internal and external, dedicated to examining the criteria of sustainability, quality and working conditions that Inditex requires of its partners. Although they do not work exclusively for the company, the textile group requires the 1,760 suppliers and 7,210 factories with which it collaborates to comply with its code of conduct and its agreements on all kinds of matters.

Last year, Inditex carried out 4,215 social audits on its partners to check whether they comply with this code, in addition to another 2,159 in matters of health and safety and 2,621 in traceability. All these controls are follow-up, since before starting to work with any partner, another type of audit is carried out, called pre-assessment, without notice, to assess the suitability or otherwise of incorporating that company into the Inditex ecosystem.

The company stopped working last year, for example, with 33 suppliers for not complying with its code of conduct, more than the 31 it discarded for commercial reasons. The result is that 95% of its purchases are already made from suppliers with an A or B rating in sustainability criteria. The goal is 100%.

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