ZARA

Introduction:
Zara was founded by Amancio Ortega in La Caruna, Spain 1975. Zara garments
stores sell fashionable clothes for young, fashion conscious city dwellers. Zara`s
business model is designed to respond quickly to rapidly changing fashion
trends. These have made a strong foundation for realizing the association
between producer and retail trade. The original business idea was very simple,
link customer demand to manufacturing, and link manufacturing to distribution.
Production process of Zara is vertically integrated so that clothing can be
designed, manufactured, and placed in stores within three weeks. Management
at Zara is decentralized. Teams known as "commercials" appraise existing trends
and choose which garments must be designed and produced.

Problems

Operating system used by Zara run on DOS The main problem that Zara faces now is that the system that
they use run on DOS,which microsoft does not support anymore and any hardware change in the
Point-Of-Sale (POS) terminal will not be compatible with the current POS system. Eventhoughthe
terminal vendor has assured that they are not going to make any drastic changesand that Zara is a big
customer, we believe that this assurance could be risky becauseZara could not include this assurance
in Zara`s contract with the terminal vendor. Thisundoubtedly is Zara`s biggest IT problem because its
entire operations rely on thereliability of its POS terminals to give it the ability and speed to capture
trends.

Zara`s system does not keep track of inventoryOne weakness of Zara`s system is the lack of ability to check
inventory within stores.Instead of having a modern POS system that updates inventory in stores in
real timewhen items are scanned for sale , Zara managers and employees have to investigateracks and
take inventory. This is time consuming work and inexact.

Zara`s system has no networking capabilitiesEach POS terminal inside a Zara store does not
communicate with any other terminal.Only one terminal for each store is equipped with a modem for
the ability tocommunicate with headquarters in LA Crouna. Moreover, Personal Digital
Assistant(PDAs) used by Zara employees to complete the ordering process are not connected inany
way to the POS terminals. Therefore, Zara is not capable to communicate betweenits stores and the home
office in a fast and efficient manner.