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Zara Case Study Brijesh P EPGP-04C-024 Manoj Kumar A EPGP-04C-050 Rupesh Paterical EPGP-04C-082 Sambath Joy K EEPGM-11C004 Trojan

Jacob Varghese EPGP04C-104

Objective
To discuss whether to upgrade their existing outdated DOS based IT infrastructure. For this, the unique business model of Zara is analyzed first.

Zara
Vertically integrated retailer. Linking customer demand to manufacturing and manufacturing to distribution. Creativity in design + Rapid response to market demand = Profits. Decentralized and autonomous small groups for decision making.

Zara Market Strategies.


Pull strategy Limited advertising, instead invest heavily in store locations and layouts . Target group Young, fashion conscious city dwellers. Frequent merchandising, fast shipment. Limited Inventory at any point. High responsiveness

Zara - IT
Limited IT spend standardized and targeted use as a support function. Relies on human intelligence for decision making. Uses PDAs, POS terminals but capabilities not fully utilized. Lacks formal processes, budgets. No use of internet, relies on outdated DOS and floppies.

Issues with current IT infra.


No computers in stores unable to fetch inventory and sales details. No networking with other stores information bottle neck. No networking with commercials Ships items not ordered by the stores. No use of IT in market study and design sharing with factories. In-house softwares not compatible with vendors DC.

Issues with current IT infra.


Manufacturing cannot generate plans and schedules with existing IT applications. No usage of IT in business support. Zara is the only client of POS vendor using DOS. Very limited IT experts for the entire organization. No commercial software, No wireless, No e-commerce, No networking.

Conclusions.
IT NOT treated as an enabler. Aging IT infrastructure. Shaky IT foundation.

Hence, Upgrading the IT infrastructure could resolve all the existing information bottle-necks and improve efficiency at all levels.

TO DO.
In house IT cannot match the business needs and future aspirations of Zara. Upgrade entire network infra, network connectivity, use of state-of-the art commercial software. Introduce changes incrementally, provide trainings (if needed ). Use of IT as an integrator SAP.

Benefits.
Better Inventory management. More timely information for managers. Efficiency in matching demand and supply. Fast capture of market trends and developments. Lower operational costs. Better co-ordination between various arms stores, design, manufacturing, DC, procurement and business supports. Less stressful employees, reduced work load