Zara It Fashion Essay

1834 words - 8 pages

Executive Summary:

My decision is to assess the benefit of upgrading Zara’s existing IT infrastructure in order to enhance scalability of their IT infrastructure. An analysis will be conducted where Zara’s business model will be discuss in details including their operational capabilities; competitive advantage will be identified; requirement of upgrades will clarified and cost & benefit of upgrading existing stable IT system will be analyzed at the end. An action plan will follow after analyzing which will include steps to be taken in order to upgrade the system that aligned with Zara’s corporate goal. This report will support us in favor of upgrading Zara’s IT system to ...view middle of the document...

Here, terminal might want to continue the contract by showing the value of no requirement of upgrading. Benefit of upgrade might not be considered.

Criteria:

In this case, a good decision by Zara would result in upgrading their existing POS terminal along with their operating system. Zara can streamline their existing process and POS terminal vendor can upgrade their hardware that works better for modern operating system. Therefore, the first criterion is that all the stores are interconnected and La Coruna is part of the network, transmission of data will be smoother. A second criterion is that upgrading to new operating system may add extra value to the company that DOS itself may not offer; for instance in store network. This will help to know whether nearby store had a particular SKU in stock or not. Finally, a good solution is that PDA and POS can share the inventory information being within same network. All above mentioned criteria will make sure that Zara will have a new upgraded computing infrastructure.

Analysis:

Zara’s half of its production is in-house. Its competitor’s like H&M, Gap or Benetton all are more involved in outsourcing. Instead of focusing on economy of scale, Zara manufacture and distribute in small batches. Even design, warehousing, distribution and logistics function are managed by Zara. This indicates that they have better control over their supply chain. They are always working on continuous improvement; looking for feedback from shoppers and then feedback data reach to designer and production in a quick manner. In addition, supply chain set up in a way that it helps to track product and materials every step of the way. Moreover, it produces all complicated product in house and outsource the simple one. This helps them become more responsive in terms of new and fluctuating demand.

Its retail concept was designed in such a way that creativity in design is vast and replenishment of products were in small batches. The notion behind this idea is to make customer of their product purchase right away else he or she would not get it on next time visit. This motivates people visit Zara more frequently. Again, there is less risk involvement in carrying small shipment of each product. Due to its idea, lower price offer comparing other retail, it often beat the high fashion houses in the market. This happened due to their constant exchange of information through every part of their supply chain including customer, store manager, market specialist, designers, production staff, buyers, warehouse managers, distributors and so on.

Zara has competitive advantage of no layer of bureaucracy between departments as others have it. Even its office layout, operational procedures and performance measures are efficiently designed to make the information transfer easy. There clothing line for men, women and children operate distinctly which expedite the overall supply chain process. However, it...

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