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ISM

Case:5

ZARA: IT FOR FAST FASHION


Submitted to:
Prof. Prabin Panigrahi

Section G

Group 7

Name

Roll No.

Ansari M. Sabeel

2015PGP040

Anusua Sarkar

2015PGP048

Deeki Choeden Barfungpa

2015PGP098

Joshi Siddharth

2015PGP160

Mahant Mishra

2015PGP190

Raghav Mishra

2015PGP289

1. WHAT IS ZARAS BUSINESS MODEL? WHAT


INFORMATION DOES ZARA NEED TO OPERATE ITS
BUSINESS MODEL?
The original business idea was very simple. Link customer demand to
manufacturing, and link manufacturing to distribution. That is the idea we still
live by.
Jos Mara Castellano Ros, Inditex CEO
Zaras business model had following components:
Faster response to customer demands by team of commercials. The team was
dedicated to each segments: Women, Men and children
Lesser lead times(2-4 weeks) in bringing new trends of apparels
Autonomy to product managers in designing
Less spending on advertising( 0.3% revenue) and more on developing the stores
Less product cycle (changed over in 3-4 weeks) and higher variety (11,000
items per year)
As a result, sales forecast were not much critical
Lesser inventory resulting in responsiveness in supply chain (Product
delivered within 2-3 days from DC to store)
Less IT spending (0.5% of revenues) as majority of applications were developed
In house

Following information would be required by Zara to operate its


business model:

Customer choices and trends ongoing in the market should be


made available to the Commercial team for better designing of
apparels.
Demand and supply patterns, need of particular apparels across
different countries for each category: Men, Women, Children
Decision on importance of each store in case of clash between
demand and supply gap
Information regarding expansion of stores at new places in
different countries would be obtained through employee team

Integration of IT with other business activities

Competitor Information

ANY) DO YOU SEE IN ZARAS IT INFRASTRUCTURE


AND IT STRATEGY?

Zara uses POS system which works on the DOS platform and is no
longer supported by Microsoft
The company is growing and wants to target the young generation,
there is much need for the stores to be inter connected and also
linked to the headquarters. Currently neither the POS nor the
PDAs are connected to Zara's Headquarters or to the stores
Separate orders for different segments within the store increases
the tasks, there is no provision in the current system for a single
order containing all the requirements
The PDAs had small screens and styluses which were highly time
consuming
Another problem the current system is that it is obsolete, Zara was
the only one using it and the Vendors shifting to Windows would
compel Zara to change its system

3. WHAT WOULD BE YOUR ADVICE TO SALGADO ON


THE ISSUE OF UPGRADING ZARAS POS TERMINALS?

Zara was building a bigger and bigger company on top of a more and more
obsolete operating system which can have an adverse effect on them in the
future. Therefore it is recommended to upgrade the POS terminals.
Zara is the only customer of the hardware vendors using DOS, which is
said to be the ancient operating system. In addition, the vendors were not
ready to sign contracts when they were asked to give assurances of not
changing their system. This implies on a possibility of up gradation and if
the vendor changes the machines in such a way that they can no longer
use DOS then the entire POS system crumbles.
Each store had several PDAs, allowing redundancy and division of labor
during the ordering process thereby making it an unproductive scenario.
Further, the POS terminals and the PDAs could not share information
even within a store. An upgraded POS terminal can accommodate new
capabilities and network within stores and across the company. Wireless
networks which are cheaper to install can help Zara stores know the
theoretical inventory of all SKUs in its stores and also provide a
mechanism to request inventory transfer from one another online and
hence eliminate the need of phone calls.

THANK YOU