Zara ITM Ppt
Transcript of Zara ITM Ppt
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The original business idea was very simple. Link customerdemand to manufacturing, and link manufacturing to distribution.That is the idea we still live by.
Jos Mara !astellano "os, #ndite$ !%&
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SummarySummary Zara is a large chain of stores run by Inditex, a multinational clothing
retailer and manufacture
Zara business model: Vertically integrated retailer in apparel industry ,linking customer demand to manufacturing , and link manufacturing todistribution and to retailing business
Major business strategies include
Speed ecentrali!ed decision making
"o# priority to Marketing and $d%ertising
Inno%ati%e &ashion esign Strategy
'ost e(ecti%e and basic I) systems
*ighly e+cient supply chain in place
)he major issue #ithin the Zara management #as #hether to upgradethe -S terminals #hich ran on -S. -S #as stable but #as outdated,performed %ery basic functions, unsure if it could support the gro#ingbusiness and might lose support from hard#are %endor.
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IT ChallengesIT Challenges
"o# or Minimal I) /udget #hich is .012 of re%enue compared
to industry standard of 32
4o 'ost /ene5t $nalysis done on I) in%estments
$pplication running on -S #hich is outdated
4o I) expertise in IS department, most of them hired fromlocal uni%ersity
refer to ha%e in house applications #hich limit the scope
4o ')- or 'I- for e(ecti%e I) management
*igh time lag on reporting from stores due to adoption ofoutdated technology 67sage of &loppy isc and telephonecalls8
$bsence of real time database, lack of communication #ithinstores
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Business ChallengesBusiness Challenges
In%entory tracking mechanism not accurate
4o interaction bet#een the stores for e(ecti%e in%entorymanagement
9ork o%er load for store managers
%en though company ha%e an e(ecti%e supply chain, it may loseits competiti%e ad%antage due to lack of I) in%estments
Major chunk of re%enue comes from Spain, ha%e high geographicrisk
)echnology upgradation re;uired for the current -S
4o forecasting is done, hence #hile increase demand theallocation of products are based on commercials instinct
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Business CapabilitiesBusiness Capabilities
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Business ProcessBusiness Process
Primary Activities Current operationsOrdering Manual checking of in%entories . &or
ordering $
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APA " #is$ Analysis %APA " #is$ Analysis %
ScorecardScorecard
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Architectural #is$Architectural #is$
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Complexity RiskComplexity Risk
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Database RiskDatabase Risk
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Operational RiskOperational Risk
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Supportability RiskSupportability Risk
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Application DispositionApplication Disposition
"o# I) Value *igh
*igh =isk "o#
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#ecommendations#ecommendations
Zara should consider gradually and steadily upgrading the current
operating system.
/usiness strategy needs to be de%eloped as per the change in technology
Should not further in%est in the current obsolete system and conduct pilottest for the ne# systems
Zara should run the old and the ne# systems side by side, until the ne#system is smooth and robust
9hile the cost of the ne# soft#are #ill be a one>time charge, themaintenance cost #ill be distributed o%er the long run.
9e suggest 74I? o%er 9indo#s due to lo# maintenance cost, its secureand highly scalable
Zara should #eigh the options of using commercial soft#are such as '=Mand S$.
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I) System "ayoutI) System "ayout
Common
Network
&e' IT (ayout
Current IT
(ayout
$> @
$>3 $>A
$: @
$ :
3
$: A
Store -1
Store -2
$> @
$>3 $>A
$: @
$ :3
$: A
Store -1
Store -2
4o communication bet#een
stores 7nidirectional communication
#ith Modem
'ommunication bet#eenstores possible
/i>directional communication#ith Modem
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-rder &ul5llment rocess-rder &ul5llment rocess
-(errecei%ed in
digitalformat from"a 'oruna
Store @
Store 3
Store A
Segment @6Men8
Segment 369omen8
Segment A6Bids8
Storemanag
er6Infrar
ed8
'ombined-rder
-rder isgenerated Cgi%en to "a
'oruna
-(errecei%ed in
digitalformat from"a 'oruna
Store @
Store 3
Store A
Storemanager
-rder isgenerated Cgi%en to "a
'oruna
Current Order FulfllmentProcess
&e' Order FulfllmentProcess
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)hank Dou)hank Dou