Zara It Fast Case

Topics: Root cause analysis, Management, Store manager Pages: 6 (1779 words) Published: July 12, 2013

Table of Contents

Executive Summary2

Issue Identification3

Environmental and Root Cause analysis4,5

Alternatives and Options5,6



Monitor and Control7


Executive summary

This case is regarding inditex’s largest successful brand Zara. This brand is its most profitable among its entire sister companies. In this case report the issue of upgrading the DOS based Information technology system. This report breaks down the major factors that are contributing to this issue of upgrade. Financial ratios are briefly used to understand the internal root causes and also the external analysis is performed in this report to analyze whether the upgrade is necessary. Numerous options and alternatives are presented in this report. It explains the Pros and Cons of the upgrade. In conclusion the report specifies that even though the option of upgrade is necessary it is also necessary to balance expenditure. Recommendations are made how to implement this option and the ways this change can be monitored, along with the advantages of the option chosen in the case report. Issue Identification

After thoroughly reading the case it becomes evident that a decision needs to be made regarding Zara’s current POS system. As Zara was Inditex’s most profitable and largest clothing chain, a back and forth discussion between the top management regarding the upgrading of the POS system. Zara’s POS system was DOS based, which is considered ancient and outdated and is no longer supported or backed by Microsoft itself. Further reading into the case made it clear that the main problem was to make a decision to upgrade the system or not as it is a risk to carry on working with this POS as the support for this POS by their vendor could be withdrawn at anytime, even though the vendor stated that they would not do that. While on the other hand a part of the upper management did not want to make changes to the software; as it was not causing any issues and every one with-in the organization were fully trained to successfully operate this existing POS. Basically “why fix something when it is not broken.” These discussions and arguments started taking place when complaints from store managers and personnel started to trickle in in-terms of lot of labor hours being used up to operate the existing software. The personnel wanted to be able to use large screens, keyboard, and mouse to undertake transactions like ordering and processing return more efficiently and effectively. Where as now they were using PDA’s with small screens and styluses. They also wanted to be able to see inventory statuses across the whole Zara retail stores. Even though the problem/ issue seemed to be straightforward it was in-fact quite complicated. The reason was that approximately 531 stores that would need to be switched to the new POS system. This will entail a constant monitoring of IT department but might bring a lot of benefits to the company. But this expense would affect overall margins.

Environmental and root cause analysis

Internal Analysis
Looking at the root causes with-in the organization provides an idea of why this issue became a concern for the organization in the first place. The individual store managers were complaining that it was difficult to go through daily reporting with the existing POS. It took a long time to report sales, as they had to wait till the end of the day to report. The reporting process was very manual as only one POS was connected to the modem that would report to the head office with day-to-day sales. This process also seemed to bypass any shrinkage and or inventory discrepancies. A floppy would be used to transfer data. The managers were unaware of the sales trends and inventory levels across other Zara stores. As the structure of inditex was very flat and the ownership and the management wanted to keep tight control of the operations...
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