To transcend the scale and intimacy trade-off, firms must address an underlying tension: the conflict between size and speed. Digital disruption is changing the nature of scale benefits. Companies can no longer afford to let their metabolism slow down. As they grow, they need to maintain speed in order to outperform competitors and meet customer expectations. The importance of speed relative to scale has increased across multiple fronts: time to market, time to gather and learn from feedback, time to make and execute decisions. Zara excels on all three, quickly bringing the latest industry trends to customers through a responsive supply chain, frontline feedback systems and decision effectiveness.

Despite expansive international growth, Zara has maintained start-up-like speed through a rapidly responsive supply chain.

Unlike its primary competitors, which outsource almost all production, Zara’s share of in-house production is about 50%.

While Zara outsources the early stages of garment production to manage costs, half-finished goods are brought to smaller, local production sites to be finalized according to regional demand. Zara relies on air freight, a costlier yet faster shipping method, to deliver products to stores. This nimble production process significantly speeds up the release of new designs.

To maintain hyperresponsive operations, Zara relies on an automated inventory-replenishment system that estimates sales volume, plans shipments and stocks stores on a quick, two-week rotation. The assortment planning for each rotation is highly granular, with inventory of each style, color and size adjusted for store location, traffic flow, customer preference and time of year.

Zara also outstrips competitors by empowering the front line to make quick decisions and continuously improve the product. Store managers solicit real-time customer feedback—everything from reasons for returns to perceived gaps in the collection—to share with the firm’s production team.

This robust learning system allows the production team to quickly create in-demand designs. In addition, store managers are responsible for stocking decisions, often requesting modifications to the automated replenishment system based on their personal observations of customer behavior.

Size often impedes a firm’s metabolic rate. Bain studies of organizational fitness reveal that larger companies are more likely to be slower at making decisions than their smaller competitors.

Zara’s learning systems and empowered store managers have improved its ability to make and execute faster, better decisions. When the retailer opened its Cape Town store, the automated replenishment system underestimated store traffic and sales volume. The store manager was able to order additional inventory with a single call to headquarters, avoiding a detrimental sellout in a new store.