ZARA's IT for Fast Fashion
COMPANY OVERVIEW
Zara, a trendy Spanish clothing retailer founded in 1975 by Amancio Ortega in La Couruna. It is a flagship retail store of Inditex Group, a holding company that owns other fashion brands such as Massimo Dutti, Bershka, Pull and Bear, Stradivarius, Kiddy’s Class, and Oysho. The company still lives by the simple idea of Amacio Ortega to link customer demand to manufacturing and link manufacturing to distribution, which ultimately able to respond very quickly to the demands of targeted customers, who are young and fashion-conscious city dwellers.
Inditex operates 1,558 stores in 44 countries, of which 531 stores are part of Zara chains. Zara generates a majority of Inditex’s sales accounting for 73.3%. Of the three departments inside Zara, Women accounted for 60% of sales, with the rest evenly split between Men and Children division.
In 2002, Inditex posted a net income of € 438 million on revenues of € 3,974 million, which is a net margin of 11.02%. Overall, the company shows net margin continuously growing indicating profitable growth. As a result, the company’s earnings have tripled since 1996.
COMPANY’S ENVIRONMENT
OPERATIONS:
To reach consumer’s demands quickly and accurately, Zara established a recurring process of ordering, fulfillment, and design and management.
Each section (Women, Men, and Children) of a Zara store places an order to headquarters twice a week on the store’s PDS devices. The orders include both replenishment of an existing item and requests for a new items. Store managers determined replenishment quantities by walking around the store and determining what has been selling by counting garments and talking to salespeople.
Fulfilling each store’s demands of clothes involves group of commercials from headquarters, who are responsible to match up the supply of finished clothes coming from factories to distribution centers then finally to the stores. The commercials works with two types of information –
Zara, a trendy Spanish clothing retailer founded in 1975 by Amancio Ortega in La Couruna. It is a flagship retail store of Inditex Group, a holding company that owns other fashion brands such as Massimo Dutti, Bershka, Pull and Bear, Stradivarius, Kiddy’s Class, and Oysho. The company still lives by the simple idea of Amacio Ortega to link customer demand to manufacturing and link manufacturing to distribution, which ultimately able to respond very quickly to the demands of targeted customers, who are young and fashion-conscious city dwellers.
Inditex operates 1,558 stores in 44 countries, of which 531 stores are part of Zara chains. Zara generates a majority of Inditex’s sales accounting for 73.3%. Of the three departments inside Zara, Women accounted for 60% of sales, with the rest evenly split between Men and Children division.
In 2002, Inditex posted a net income of € 438 million on revenues of € 3,974 million, which is a net margin of 11.02%. Overall, the company shows net margin continuously growing indicating profitable growth. As a result, the company’s earnings have tripled since 1996.
COMPANY’S ENVIRONMENT
OPERATIONS:
To reach consumer’s demands quickly and accurately, Zara established a recurring process of ordering, fulfillment, and design and management.
Each section (Women, Men, and Children) of a Zara store places an order to headquarters twice a week on the store’s PDS devices. The orders include both replenishment of an existing item and requests for a new items. Store managers determined replenishment quantities by walking around the store and determining what has been selling by counting garments and talking to salespeople.
Fulfilling each store’s demands of clothes involves group of commercials from headquarters, who are responsible to match up the supply of finished clothes coming from factories to distribution centers then finally to the stores. The commercials works with two types of information –