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Zara It Essay

1341 words - 6 pages

Zara: IT for fast fashionZara business cultureTwo words summarize Zara's competitive advantage: Fast & Efficient. Zara's first CEO José María Castellano Ríos established a clear business idea that represents every effort Zara's management exerts today: "Link customer demand to manufacturing, and link manufacturing with distribution." In a basic sense Mr. Castellano wanted his every critical element from Zara's Supply Chain (SC) interconnected and sharing information real time.Decentralize decision making. Zara's management understood their market well. Their customer base were young, fashion conscious and their taste in clothing changed rapidly.In order to satisfy ...view middle of the document...

The decisions made by these teams were rarely reviewed since it would compromise the company's speed and decentralizeddecision making.Zara's Information TechnologyZara's IT in par with business strategy of speed and decentralize decision making. Each information system (IS) throughout the Inditex enterprise is unique and simple.There are four main enterprise levels or areas within Zara: La Coruña (HQ), Factories, Distribution Centers (DC), and Stores. Each of these levels possess some type ofinternally developed application or systems that supports a business process in an simple, expedient and efficient manner.Head Quarters use internally developed applications to support operations. The systems at La Coruña used critical decision making attributes that can directly impact sales. The first application consisted of offer/request sreparation and distribution. This system received orders from all the stores around the world and distributes them through the Internet. The second application compares the aggregated order to available inventory, highlighted where supply and demands where imbalanced, and executedcommercials' decisions on how to allocate the products. The last application kept track of the "theoretical inventory". It was theoretical because the inventory would become inaccurate due to a lack of accounting procedures for theft, damage and other losses. Inditex wasn't too concern about a 100% accuracy of this systems since the reward to cost ratio of keeping a 100% accurate system was inefficient or negative.Enterprise Factory level used simple applications for production. The applications for factories did not use complicated methods to generate optimal plans and schedules. The process was far simpler. Factory managers were presented with quantities and due dates for all production requests. Managers in turn used this information load factories and set job schedules. Moreover, the most sophisticated equipment in a factory was a computer controlled machine that minimized scrap material.Distribution Centers level enjoys a great deal of automation and computerization. A large automated conveyor belt system reorganized garments from factories intoshipments. In collaboration with the vendors, the Zara's IT department wrote the applications that controlled its unique DC automation. Furthermore, this system expedited the distribution process to the point that there was hardly any inventory anywhere in the supply chain.Store Information Systems allowed for fast setups, fixes and uncomplicated use. Each store possesses two simple systems: Point of Sale (POS) information systems andPersonal Digital Assistants (PDA). The old POS terminals run on DOS operating system which is no longer supported by Microsoft. Nevertheless, due to its stability,effectiveness and ease of setup, maintenance and use, Zara continued to develop applications...

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