The History Of Zara Information Technology Essay

The History Of Zara In seduceation Technology EssayZara is the ab surface successful brand of Spanish company Grupo Inditex. Its owner, Amancio Ortega, opened first sell put in in 1975 in La Coruna, a sm exclusively air in Spain. Zara became the innovations largest fashion retailer by 2008 end. By this time it had stores in over 70 countries, expose performing its rivals comparable Gap of regular army and Sweden based HM (Hennes Maurits) (http//www.guardian.co.uk/business/2008/aug/12/retail.spain).Zaras Innovative OperationsDaniel Piette, handler of fashion, LVMH has described Zara as possibly the most devastating and innovating retailer in the world http//tbmdb.blogspot.com/2009/12/business-model-example-zara-devastating.html, owing to the companys innovative and quaint approach in fashion retail.Zara follows the plan of a vertic totallyy integrated give chain, in which the company has a tight control over most of the endeavor phase, achievement phase and distribution dodge to its chain of retail fall outlets. The wait of these processes is handled by its sister concerns with nearby locations. Un care its competitors Zara does non outsource its production to Asian developing countries the proximity of production units serve ups Zara by giving flexibleness in production so that the company layabout meet the changing demands of the consumers much expeditiously than its competitors.Zara has integrated the system of POS (Point Of Sales) and has formed a unique method that jockstraps in the production of vernal concepts. POS supporters in monitoring what designs argon bringing in maximum sales at the retail shops. The store managers be allowed freedom to decide which designs to display and which ones to keep corroborate in the store, depending on the sales of those designs. Zaras employees at the retail outlets gather feedbacks from the customers and convey the selective information to the provide with the stand by of hand-held PDAs that to each one employee is call for to carry. At the headquarters, the design teams immediately respond to feedbacks displace via PDAs and begin designing new array accordingly. The clothes are manufactured and distributed to the retail stores within a short circuit-circuit period of 2 to 4 weeks owing to the vertical integration of its supply chain. While its rivals are busy finding and identifying what the latest trends might be and finally take 4 to 9 months to distribute new designs to their single stores, Zara manages to design, manufacture and distribute new designs in a matter of except of 30 days.Taking advantage of the fast turn nigh time, Zara eschews the concept of producing just one collection per season, like its rivals do. Instead the designs keep on changing frequently so that Zara manages to deliver new designs twice a week to its retail shops. Zara hardly produces small quantities of each style so that there is continuous demand of popular designs. It c uts down on manufacturing cost as well. Thus Zara manages to deliver around 12000 different styles in a year whereas its competitors domiciliate produce only 4000-5000 per year. Hence, the company-coined phrase, fast fashion http//www.3isite.com/articles/ImagesFashion_Zara_Part_I.pdf. menstruum Technology in Information CommunicationZaras drop of technology in information technology is unique from its competitors. Firstly Zara uses much less technology, in terms of expenditure and work-force, than its competitors just 0.5% of its work force compared to 2.5% of employees that its rivals utilise. Similarly Zara spends only 0.5% of its revenue on information technology compared to expenditure of 2% by its competitors. Secondly Zara employs a unique combination of human and IT intelligence. Managers at the stores and the commercialise survey done by the employees, form the human intelligence plot of land IT intelligence consists of the PDA devices used to send information collect ed by the managers and new(prenominal) employees carrying the PDAs. An order form is transmitted to each managers PDA postulation for information such(prenominal) as availability of coiffes and patterns of garment sales. The managers of each retail outlets then divide this order form into sections and these sections are transmitted to the PDAs of each employee to fill up, based on customers feedback and the kind of designs sold. Employees then transmit back their respective sections to the managers PDA, after entering the customers requirements. The managers of each store are prone total authority to determine and identify which sections are to be well-kept in the order form. The edited order form is then sent back to headquarters where the designing teams start working on the tush of the order forms. This unique hybrid of humans technology helps in managing the inventories in force(p)ly and quick and efficient link between demand and supply, thus successfully helping in thei r own doctrine of fast fashion.Summing up Zaras use of technology http//leoborjblog.wordpress.com/2009/08/10/zara-it-for-fast-fashion/Gather customer requirements PDAsLogistics and transmission of order form POS terminals and modems. vigorously designing new style CAD (Computer Aided Design)Advantages of such an Innovative SystemVertical integration of supply chain and short turn around time lead to High turnover of product.Quick and efficient distribution helps to eliminate warehouse requirement, saving on surplus storage costs.Searching the market for latest fashion trends and responding quickly to the consumer requirements with the help of hand-held PDAs.Complete autonomy and flexibility to the employees and managers who are in take in contact with the customers.POS terminals run on nation operating system, which is cheap and clear to maintain and operate.Perceived limitations of this System http//www.slideshare.net/koffman/zara-case-study-2780928Zara and its sister concern s have been victimisation DOS as their main operating system in all the processes. It is an superannuated operating system.As the POS vendor supplies DOS OS to zara only, it can forever stop its supply, while plow to supply other operating systems to its other customers.Store managers are the decision makers. Zara headquarter relies solely on the experience and wisdom of the managers.Instead of looking after customers, managers and employees have the time-consuming task of manually entering the garment details in small PDAs. This could result in the employees failing to assist some customers in choosing and might miss out on few garment sales.Inventory is maintained manually as well.Information transmitted is one way only. Managers have no friendship of the inventories at headquarters and the stores distribution centre. Consequently managers can non promise a customer if a particular garment that has been sold out, can be replenished and in how many days.Promises made to custo mers not kept can damage Zaras reputation, so the managers need to k directly about the garments inventories at headquarters and the distribution centres. in that location is a great demand for Zaras garments even though new designs are available twice a week. Zara may consider adjoin in production to meet these ever growing demands. Gathering of information thence may need to be upgraded in terms of frequency.Its competitors can exchange to a better OS or software package and increase their turn around time, neutralizing Zaras edge of fast fashion over them. freshly IT Technology for Sustainability http//www.123helpme.com/view.asp?id=97642BenefitsNew technology may not help Zara in increasing the competitive edge over its competitors but testament help in sustaining that edge.A new operating system leave alone help in installing software packages that volition help in efficient access of armoury at the stores as well as headquarters and distribution centers.Upgrading to new OS impart remove the companys dependency on its current supplier of DOS.Using more than one IT supplier will increase Zaras bargaining power.A Network can be set up up between HQ, production centers and retail stores.POS system can be automated so that each sale will automatically update the POS devices.If the POS system of all stores can be interlinked all the store managers can tardily k right away the inventory online and can make and keep their promises to customers demanding a particular garment.POS automation will help reduce overall workload of the employees and managers, as they will not have to manually enter every detail required in the order form.There will not be any need of hand held PDAs.Dedicated POS software will ensure that orders will now be made on the radical of theoretical inventories and will be more accurate.Orders can now pose continually increasing the frequency from twice a week to daily. high-flown software to be used for integration would be ERP (En terprise Resource Planning). Linking all the process in the supply chain, from HQ, design centers to retail stores, will not only help the managers in accessing inventories but will also help HQ to regulate the supplies more accurately according to the orders placed.Production will become even leaner than before.ECQ (Economic Order Quantity) can help in determining quantities of different garments that buyer can order so that there is sufficient stock for the customers. This will reduce inventory cost as well.Knowing reorder levels will streamline managing of the inventory and help in maintaining the autonomy of the managers. Managers can determine from the reorder levels whether a particular garment needs to be ordered before it will go out of stock and can transmit the same to the production centers that are now linked to the retail outlets.Of course manual checks will s bank be needed occasionally to check a stores real time inventory is same as the theoretical inventory in case of exceptions like garments getting stolen or gone missing.Designers at HQ will now not depend entirely on the managers discretion and can succeed themselves sales of new designs due to two-way system integration by ERP.Just in case a store does run out of stock on a particular garment, the manager can easily check the inventories of local nearby stores for availability and suggest the customer to go there.Inter-store connectivity will have added advantage of shipping garments to another store that has more demand of a particular garment. This will further increase the speed-to-market. in any case HQ even managers of different stores will benefit if they know finished network what is selling at other stores and what is not.Cost AnalysisZara will have to upgrade to better OS that will support ERP like Linux, Unix or Windows NT.Implementation cost of Linux is lowest of the three OS. But repeat costs like service-contract is much higher (McAfee et al).Annual cost of using Unix is th e lowest and if functionality remains more or less same, Unix will be best suited.If other costs like plans for systems failure are not taken into consideration then implementation cost will comparatively much lower than prospective ROI (Return On Investment).Risk Analysisever-changing software and operating system in all retail shops world over is not an easy task.Due to location of Zaras retail outlets all over the world, there will be many extra real(a) costs.Cost of replacing current POS system with the new one.Cost of innovation of new cables in each store and maybe new infrastructure to support the cables.Cost of external IT support, hiring professional consultants.Cost of internal IT perpl reachy and technical training of forcefulness.Time taken to train the personnel till outside assistance is not required cannot be determined as level of training and learning will be different at different locations around the world.Risk ReductionBoth current and new systems should oper ate together till the personnel of each store can run the new system smoothly this will not relegate any service provided to customers.Zara has a huge pilot outlet that is around 1,500 square meters. Zara can use this as training facility from its personnel from all over the world. Zara can use it to test the new system as well.Zara can hire see software professionals and open an in-house department for software management and development.Zara can outsource the management and development to experienced software companies. However Zara will have to trade-off between extremely efficient and expensive companies.Zara should develop a contingency plan and an exit plan as well in case the company cannot continue with the up gradation for some reason.Robust data backup is required in case the new system crashes due to mishandling by unpractised staff.