Zara Case

Topics: Inventory, Strategic management, Management, Decision making, Economic order quantity / Pages: 6 (1486 words) / Published: Sep 5th, 2008
Q1a. Should the company upgrade the POS terminals to a modern operating system?
It might not be in the retailer’s best interest to perform such upgrade, as the new system will replace three of the existing legacy systems in terms of ordering and fulfillment. The IS department will perceive such upgrade as a radical move and is expected to show high resistance in response to it. Even though Zara has a decentralized decision making process, the retailer’s IS department exercises absolute autonomy on the IT infrastructure and design. The fact that “only one person had left the department” in the past 10 years further confirms that the retailer is suffering from cognitive and action inertia, and thus creating a huge barrier for such upgrade. Nevertheless, Zara should still perform such upgrade in the long run. Q1b. Should the company build in-store networks?
Yes, it will remove some redundancies in daily operations. For instance, employees no longer have to collect data physically from each POS terminal in order to obtain daily sales totals. In-store network will also enable store managers to have a more comprehensive understanding of sales activities on both a consolidated level and section (Men, Women, or Children) level.

Q1c. Should the company give employees the ability to look up inventory balances for items in their own stores?
Yes, this will result in a more efficient and systematic stock auditing and ordering process. In specific, it will not only provide store managers with updated inventory balances, it also helps them when reviewing the latest offer from La Coruna and preparing “the order” in the face of the narrow 24-hour order window. On the other hand, the store product managers can now retrieve more reliable and updated sales figures from each store. This enables the managers to be more effective when making store-to-store transfers. The commercials responsible for matching aggregate supply with demand from each store will

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