Zara: It for Fast Fashion

Topics: Operating system, Point of sale, Inventory Pages: 8 (2879 words) Published: January 12, 2012
ZARA: IT for Fast Fashion

ZARA: IT for Fast Fashion

Zara: IT for Fast Fashion

Executive Summary
This concise summary will introduce and also, briefly, analyze and summarize the case at hand: Zara: IT for Fast Fashion and the issues Mr. Salgado and Mr. Sanchez are facing alongside the rest of Zara and Inditex’s management. The problems introduced are all major concerns that are currently affecting or risking to potentially affect the company in the future. These include issues with the current operating system and point-of-sale systems the company operates. They provide limited visibility throughout inventory levels resulting in customer and employee dissatisfaction alongside inefficient time consumption due to lengthy physical inventory counts. Additionally, these systems force the need for PDA usages which prove to be ineffective due to their small screens, and troubles with customer returns. Because of this, we believe the company should waive the first two of the three alternatives which described no change in the current systems, and a gradual change by area system, respectively, and should pursue the third provided alternative, which consisted of an immediate implementation of new point-of-sale systems and operating systems companywide. We believe the benefits of customer and employee satisfaction, improved inventory information, potential for higher profits and overall higher levels of efficiency will far outweigh the costs and risks associated with the implementation of these new systems. Statement of Problems/Causes

There are a number of problems identified by Salgado (head of IT) and Sanchez of Inditex regarding problems in their Zara line of stores. These problems have created inefficiencies within Zara and throughout the entire Inditex organization (as Zara is a major portion of the organization) which must be solved for the business to remain a leader in the fashion industry. The major problems revolve around the point-of-sale system that is currently being used by Zara around the world. These problems that will be discussed further include: a lack of visibility throughout the system for managers, issues with ordering and data transmission to head office, and issues regarding returns.

The first issue with the point-of-sale system is the lack of visibility throughout the whole system. This is in part due to the limitations of the MS-DOS system they currently use. To show how outdated the system really is, hard drive manufacturers are going to stop supporting the XP operating system by 2012 (Brownlee, 2010). Because XP is significantly newer then MS-DOS, it will also no longer be supported by these new hard drives; this shows the challenges Zara will face if they are to continue their current POS system (Brownlee). The lack of visibility results lack of inventory knowledge across store networks, lack of stock knowledge (stock counts can only be measured by physical counts) and also, shortages of knowledge regarding best-selling items. In turn, this lack of both internal and external visibility creates further issues with product ordering and also, customer service. For example, if a customer comes into the store looking for an item that might currently be out of stock at the present location, the manager or other store employees cannot simply utilize the current POS system to check for other store’s inventory. Employees must call around to other locations which are also not capable to check inventory unless physically searching their store. This proves to be a highly inefficient technique that provides limited customer service, as consumers are forced to wait inconvenient periods of time whilst employees physically search for desired merchandise. Further, employees also cannot see if a specific item that is currently out of stock will be delivered at a later date or if that particular Zara location was not selected to receive a limited item. Evidently, this system...
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