Zara: Information Technology For Fast Fashion :: Problem, Solution, Case Study

Problem Statement In 2003, Zaras CIO must decide whether to upgrade the retailers IT infrastructure and capabilities. At the time of the case, the friendship relies on an out-of-date operating strategy for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zaras parent lodge, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. Therefore the major problem to the company is to decide whether it has to upgrade the present system and by doing so, risking the reliability they have with the current system or to continue with the present DOS based system which will non be harmonious for future changes or improvements. Analysis & Recommendation Zaras main strategy is the ability to respond very quickly to the demands of target customers which called for identifying trends of the customer in advance. The company has been able to identify the trends and meet the dem and with the help of its autonomously organized structure and its impelling value chain systems. The present system followed by Zara has been very effective and very easy to maintain, which as a exit has persuaded the company to continue without any change in the present system so far. The problem that Zara faces overcompensate now is that the system that they use, P-O-S (Point of Sale terminals), runs on DOS which Microsoft does not support anymore and any hardware change in the POS terminal will not be compatible with the current POS software. Although the sense of urgency for the change may not be that high, investing in IT infrastructure is a must as MS Dos is an obsolete technology and there is no contract or guarantee from their POS terminal vendor that they will continue supplying the said(prenominal) terminal with out much changes in the hardware for any specific period of time, therefore change is unavoidable. The other main issue that Zara faces is that the stores don t share inventory information electronically and hence inventory management becomes highly difficult and manual. The decision making process is based on the head of employees throughout the company instead of relying on a small set of decision makers the majority of the decisions were made by store managers and as a result they placed orders for the items rather than simply accepting and displaying what headquarters decided to send them.