zara -bif case

7/29/2019 zara -bif case

1/25

ZARA: IT for Fast FashionBusiness Informatics Case Study

Presented by:

Akriti Agrawal

Abhishek Shukla

Amit Kumar

Anjana Carri

Rakhi VarmaVatsala Ratanpal


2/25

Company Profile ZARA strategies

Case Overview Zara IS Implementation Components of IS and

Implementation issues Recommendations


3/25

Founded by Amancio Ortega First store - La Coruna in 1975

One of the largest international fashioncompanies catering for Women, Men andChildren segments

Largest and most profitable chain of Inditex Operations into 45 countries with 531 stores

located in Europe, Middle East, Asia-Pacific

and the Americas.


4/25

Short lead times: Allows responding to fast-changing and impulsive tastes of customers

Increased availability of new styles:Higher chance of hitting the jackpot

Small batches per product: Reducesexposure to a single product and creates anartificial scarcity


5/25

Keeping Costs down: Produces more than

half of its clothes, minimal expenditure onmarketing, spends less on productdevelopment and design

High autonomy amongst employeesthroughout the company instead ofemploying a small, elite team


6/25

To combine moderate prices

with the ability to offer newclothing styles faster than its

competitors.


7/25

Zara relies on an out-of-date operating system(OS) for its store terminalsThe Point-Of-Sale (POS) terminals used by Zara run on DOS which

Microsoft does not support

No full-time network in place across the storesPOS terminals and PDAs not always connected to Zaras headquarters

or other stores: Inventory management difficult

Zaras parent company, Inditex, runs onWindow OS and has built an extremely well-performing value-chain


8/25

Zara builds on ability to respond very quicklyto the demands of target customers using itscurrent system

-involves identifying trends of the customer in advance based on intuitiveanalysis and decentralized decision making

Problem Statement:

To continue using DOS: extremely stable, effective, easy to use

OR

Upgrade to modern OS, enhancing the POS application itself, and/or buildingnetworks within and between stores


9/25

Q1) Discuss the case study as an

IS practical implementation,showing its potential for

supporting enterprise growth.

(Consider the value chain)


10/25

Design Production Distribution Retailing


11/25

commercials involved

Collections were created and modified overtime.

Sources of information:fashion trends seen from major fashion shows, localtrends, intuitions of store managers ,POS data (data

collected from customers).


12/25

Product managers- part of commercial teams-purchase materials, placed production orders with

the factories and set prices.

Highly Automated and Capital Intensive factories. IT intensive.

Fully Automated Order Application Resource allocation- dependent on a software.

Resource planning- IT oriented- managers were presentedwith quantities n due dates for requests.


13/25

Finished garments sent to Zara facility- ironed, inspected,machine readable tag and sent to a DC.

Automated conveyor belts facilitates the task of receiving

the bulk quantities of each garment fromfactories.

Efficient segregation and sorting of garments- IS tracks thestorage of each SKU


14/25

store managers autonomy over

ordering.

co-ordination between retailing and

manufacturing.

Sales and trend forecasting


15/25

Sales and trend forecasting-constant monitoring and updating of information gives

designers a heads up over the competition in developing newstyles.

Helps in taking quick decisions- Decentralized decision making.

Inventory Control- high frequency of ordering, replenishment-

75% of inventory changed in 3-4 weeks intervals. helps better order management as Zara typically doesnt

keep an inventory in their warehouse for more than threedays.


16/25

Short lead time- due to vertically integratedmanufacturing operations

Time take todevelop a

fashion line

ZARA: 3months

Others: 9-12months


17/25

Constant stream of information Leads to constant input in product development process.

Control early investments in raw material, direct and

indirect of process and production capabilities.


18/25

Question 2) Outline and discuss

implementation issues of allparts of the IS, people,

procedures, devices, software,

and databases, whereappropriate


19/25

IS

People

Procedures Device

Softwareand

Database


20/25

Designing: dependent upon expertise and individualdiscretion. Some facts and figures are required for decision

making.

Production: Purchase of raw materials- intuition nqualitative info. Autonomy of factory

Distribution-possibility of human errors while packing.

Retailing : manual collation and transmission of datawhile ordering


21/25

Design and Purchase of Raw Material- no laiddown standard of procedures.

Manufacturing- monitoring of the work was not doneon any stage to a great extent.

Distribution- no major issue as process was automated.Labour involved in packing

Retailing- sales and trend forecasting, procedures setfor ordering and fulfillment of orders


22/25

Design- no use of devices at the design stage

Production- Computer controlled complex equipment to cut

the fabric- the application needed to be modified due to fastchanges in fashion

Distribution- automated conveyer belts.

Retailing-PDAs and POS terminals used in the stores-no realtime connection with the central network- PDA device which didnot share the information with the POS system -made it reallydifficult to access all information effectively.


23/25

Software and database

Design-

no use of any

software at thedesign stage

Production-

no provisionprovided for

estimating purchaseof raw materials.

Cutting equipmentequipped with

software with latestdesigns

Distribution-softwares to control

the conveyor beltoperations and

tracking SKUs. nosoftware to track the

flow of garments fromfactory to stores whichincreases the chances

of theft

Retailing-

existing softwaredid not provide anyidea of inventory to

store manager.Also, they were notable to forecast

sales


24/25

1. Upgrade from DOS: DOS- obsolete

no contract or guarantee from their POS terminal vendor that they will

continue supplying the same terminal with out much changes in thehardware for any specific period of time

2. Upgrade the ordering system.

Allow PDAs to share information with POS system. will help in increasing the functionality and networking capability

Will allow real time inventory management

3. Develop a software to track inventory in

stores


25/25

zara -bif case

Documents