7/25/2019 G7Zara

1/6

ZARA: IT FOR FAST FASHION

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

ISM

Case:5

Submitted to:

Prof. Prabin Panigrahi

7/25/2019 G7Zara

2/6

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 childrenLesser 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 criticalLesser 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

7/25/2019 G7Zara

3/6

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, ChildrenDecision 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

7/25/2019 G7Zara

4/6

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

consumingAnother 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

7/25/2019 G7Zara

5/6

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 thefuture. 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 ifthe 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 informationeven 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.

7/25/2019 G7Zara

6/6

THANK YOU