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Zara Case Study
Zara Case Study
Zara Case Study
Objective
To discuss whether to upgrade their existing outdated DOS based IT infrastructure. For this, the unique business model of Zara is analyzed first.
Zara
Vertically integrated retailer. Linking customer demand to manufacturing and manufacturing to distribution. Creativity in design + Rapid response to market demand = Profits. Decentralized and autonomous small groups for decision making.
Zara - IT
Limited IT spend standardized and targeted use as a support function. Relies on human intelligence for decision making. Uses PDAs, POS terminals but capabilities not fully utilized. Lacks formal processes, budgets. No use of internet, relies on outdated DOS and floppies.
Conclusions.
IT NOT treated as an enabler. Aging IT infrastructure. Shaky IT foundation.
Hence, Upgrading the IT infrastructure could resolve all the existing information bottle-necks and improve efficiency at all levels.
TO DO.
In house IT cannot match the business needs and future aspirations of Zara. Upgrade entire network infra, network connectivity, use of state-of-the art commercial software. Introduce changes incrementally, provide trainings (if needed ). Use of IT as an integrator SAP.
Benefits.
Better Inventory management. More timely information for managers. Efficiency in matching demand and supply. Fast capture of market trends and developments. Lower operational costs. Better co-ordination between various arms stores, design, manufacturing, DC, procurement and business supports. Less stressful employees, reduced work load