Manner industry is one of the most competitory markets with many competitions between companies and trade names. Among those, Zara from Inditex has stood out as a alone organisation with particular cognition and abilities in radical supply opportunity, processes, direction manner and execution of Information and Information Technology. This study aims to analyze the ground and the part of Information System and Information Technology in this success.
Recently Inditex, the parent company that owns Zara, has received new members to the Board of Directors who have huge experience and cognition of finance. However they have small understanding about the Fashion Industry and Information Technology. The purpose of the undermentioned study is to give the new members a concise overview of the manner industry, Zara and the importance of the relation they have with Information Technology. In order to make that, this study will cover subjects such as, the Fashion Industry, the success of Zara in the Fashion Industry, the importance of Supply Management in Zara ‘s success and the usage of Information Technology in Zara ‘s manner concern theoretical account.
Fashion – a competitory industry
The manner universe is really complex ; it is non merely about the visual aspect. There are many factors which contribute to the manner industry such as: civilization, manner, creativeness and many more.
- The manner universe is competitory because different people have different gustatory sensation. Businesses ‘ wants to capture the tendency to accommodate people ‘s desire before their rivals. The vesture reflects on the personality and feature of the individual, which hence creates options for concerns as they can take their preferable mark.
- This could besides be due to the civilization impact as this is where a individual ‘s personality is developed. This is one ground as to why the manner industry produces different type merchandises.
- Besides concerns ‘ depends on the BIG BRAND manner shows, so they can make new manners which are similar to those seen on the show to pull more clients. Besides concerns needs to be able to maintain up with the tendency in order stratify their clients, as manner universe altering often.
- Apparels can reflect on your societal position which can be clearly defined in the word ‘brand ‘ . Brand is an extra ground which makes the manner universe competitory. Rich people will experience good to hold luxury goods which are called ‘big trade names ‘ because their position are reflected upon these. Well known trade names present their merchandise as high quality. Therefore the in-between degree trade name and non trade name signifiers, encourages people with lower buying power to purchase apparels. Consequently everyone is able to purchase apparels they desire.
Success of Zara.
Zara is considered to be one of the innovators of fast manner industry and has been ruling the manner industry across the universe for about two decennaries. Some facets that lead to Zara ‘s success are as follows:
- Zara is able to accommodate to the altering market tendencies really rapidly and run into the client demands based on the research on current market tendencies.
- One of the of import key factors that were indispensable for the success of Zara was, they had their art caput quarters with interior decorators, mills and distribution Centres all onsite. While most of the rivals moved Far East for much cheaper production, Zara decided to do the apparels at Spain to cut down the lead times and could besides do the apparels faster and acquire them to shops at much faster rate.
- Another facet is to provide little sums to each shop and proctor which design sold more and bring forth the design that makes the maximal sale, alternatively of keeping stocks at stock list. The shop directors take the undertaking of supervising the design which sells more and transform it to production directors and they decide how many garments are to be manufactured and transported to the local stores.
- Zara maintained a short lead clip to maintain up with the fast manner supply concatenation and ever a measure in front when compared with its rivals. From the indentifying measure to concluding merchandise merely take 30-days.
Key procedures and Information System ‘s part
The of import procedures are:
- Ordering: is done based on current market tendencies and client feedbacks.
- Planing: based on the orders given.
- Fabrication: After fabricating the apparels are sent to the distribution Centres.
- Distribution: From the distribution centres the garments are sent to the shops.
Improvement of procedure utilizing IT:
- It saves batch of clip
- Handicraft is reduced
- Information flow being made easier
- Information is kept in the computing machine database
Information Systems and Information Technology
Unlike other companies have to pass big sum of money to derive advantages from Information Technology and so pay more money to keep it, Inditex invests really small on Information System which is referred to simple Technologies “ Application at Inditex are written and maintained by an IT staff of 50, which accounts for less than 0.5 % of the company ‘s work force ” ( McAfee, A 2004 ) .
- Part of Zara ‘s Information System focuses on the communicating between its retail merchant ‘s shops and the head-quarter in La Coru & A ; ntilde ; a. Every shop of Zara is equipped with the PDAs and DOS based point-of-sales ( POS ) package so that every order from client will reassign straight to the head-quarter for analysis intents. This system is besides used for roll uping client remarks and sentiments on manners and design therefore will be used to back up the design squad to supply precisely merchandises that meet the real-time demands of market ‘s demand.
- Another usage of Information System in Zara is that the shop ‘s director can order goods concerned to quantitative and plan which they think will sell best for their local markets. However, this information reassigning procedure is non utilizing more complex engineering than dial-up cyberspace to convey the information twice a hebdomad.
- Besides, based on the Annual Report for Stakeholders ( 2007 ) Inditex mentioned the execution of Store Management Terminal ( SMT ) at every shop to beef up the communicating within shop, warehouse and direction section.
- Another recent execution of Information System is the Internet Store ( www.ZaraHome.com ) which is brought out as having on-line orders and feedbacks from clients.
- Besides that, computing machine aided design and computing machine aided fabrication ( CAD/CAM ) that converts designs into touchable merchandises. Interior designers use the CAD/CAM to rapidly do the concluding merchandises based on client ‘s demands.
Role of Information System and Information Technology
One of the peculiar characteristic, known as a unique and a innovator, of Zara is decreased clip in whole procedure from clients ‘ demands to transporting fulfilled merchandises to shops, supply concatenation. Like manner shows in Paris, Zara uses this manner to pull the designs, transmit these designs to Spain, and finalize them within 15 yearss ; whereas, this procedure takes about six hebdomads for other rivals do, harmonizing to Folpe ( 2000 ) . One of the methods of cut downing lead clip is the execution of Information Technology
Zara staffs have to utilize Information System in this procedure:
- Computer hardware and package are used to plan and hive away design forms.
- Computers and cyberspace are used to convey these designs to Spain.
- Computers and cyberspace are used to pass on ; electronic mails, VoIP, picture conferences.
- Information Technology is used to supervise, manage, and process whole procedure of doing merchandises.
- The robotic system in mill is used to cut cloths, package or plan is used to command automaton in footings of cutting cloths, publishing image on merchandises, packing apparels, and commanding conveyor belts every bit good.
- Information system is besides used to pass on with providers where to acquire stuffs, with divisions of operation inside the mill to run whole procedure efficaciously and expeditiously, and with distributers for transportation every bit good.
As Jessup and Valacich ( 2008 ) said that Information System/ Technology can assist to make things faster, better, smarter. Zara has considered as successful illustration of information and engineering ethically.
Could Zara be successful without Information Technology?
Many companies in the manner industry are based on a demand-driven and web based supply concatenation where data-flow and effectiveness bringing of merchandises are important to success. This success in the manner industry can non be achieved without a important investing Information engineering. Information engineering overcomes communication barriers and helps to complect all the entities in the supply concatenation by sharing information. These facts demonstrate the of import function that a proper Information engineering investing has in the success of an organisation in the manner industry.
Recommended betterment in Information Technology and Information System
More effectual betterments in Information System could back up Zara as it could back up the relationship and communicating with other companies and within Zara. These advantages can be done by the execution of new Information Technology and Information System:
- Keeping the bring forthing procedure ever remain at the top public presentation by back uping stock providing through better apprehension with the stuff providers, scheduling the bringing clip more efficient, or proficient support immediate associate with fabricating engines jobs.
- Supporting sweep and off-shoring determination by brand certain the head-quarter can supervise the concern every bit good as understanding the new market through analyzing gross revenues and clients feedbacks.
- Investing in constructing private information web within the organisation will maximize the ability of fluxing of information, efficient direction and better security.
Security in Zara
- Data safety: In instance of system crashed or any thread that can destruct informations. Inditex ‘s study ( 2007 ) written “ there are eventuality systems in the event of computing machine arrest, with dual equipment and informations storage in a different location to the chief Centre, which would cut down the effects of a dislocation or arrest to a border of merely a few hours. ”
- Information security: By utilizing of hardware and package, Zara can avoid devastation of virus, stealing from spyware.
- Operation safety: Roboticss system does non merely cut down clip of procedure but besides limit accidents that may do by worker ‘s errors.
- Transaction security: any payment from clients paid by cards need to be secured and any on-line dealing every bit good.
- Communication amongst subdivisions: do certain that communicating system amongst subdivisions around the universe is uninterrupted.
The function of supply concatenation direction
Since manner inclinations are ephemeral, the success of a company in the manner industry lies on “ its ability to run into demand and respond rapidly to fluctuations and alteration ” ( Strategic Direction, 2005 ) . This success is merely possible if an first-class agile supply concatenation direction system is present to react to these demands.
Supply Chain Management is an attack to command and fall in together all the activities, it besides improves the connexion between all the entities in the concatenation supply, by the linkage of all the sections leads to fast and proper bringing of high quality merchandises. Liz Barnes and Gaynor Lea-Greenwood ( 2006 ) stated that direction scheme moves to accomplish success and react demands along with fluctuations in the market: Just-in-Time, nimble supply concatenation and speedy antiphonal systems.
Just-in-time, harmonizing to Bruce ( 2004 ) , is a term in that defines the ( “ … bringing of finished goods to run into demand without transporting up front supply concatenation stock list, but in clip to run into market demand. This is retailer goaded construct aimed at cut downing costs for concerns in the supply concatenation ” ) .
Agile Supply Chains, the construct of legerity in the supply concatenation direction is centred on “ reactivity ” ( Christopher et al. , 2004 ) ; as it was reference before the manner industry is unstable and unpredictable, hence the ability of being “ antiphonal ” in this industry is a important factor for any company ‘s success. It was proposed by Harrison ( Christopher et al, cited in Harrison 1999 ) that an nimble supply concatenation has the undermentioned features:
- Market sensitive: the capableness of read and respond to existent demand and capturing emerging tendencies by analyzing point-of-sale informations from client ‘s feedback.
- Virtual: an nimble supply concatenation is practical for the ground that connects and portions information on existent demand between all the spouses in the supply concatenation, this contributes to collaborative planning.
- Network-based: it means working closely with other specializers, for case Zara, which assigns all its finishing phases of fabrication to little subcontractors.
- Procedure aligned: is the ability of an nimble supply concatenation to hold a high grade of procedure interconnectivity and cooperation between web members.
Quick response is a cardinal scheme in the fast manner market that focuses on the ability of an administration to supply the client the same measure of different scope of high quality merchandises at the right clip, the right topographic point and the right monetary value. This is achieved because of the real-time customer/ consumer demand system, where the client ‘s feedback influences determinations in the fabrication, distribution and velocity of bringing procedures.
Risky in supply opportunity direction
Zara ‘s current theoretical account of supply concatenation has endured for more than two decennaries and has generated multiple successes for the company. On the other manus, this attack could make some hazards for the company. Michael A. Lewis ( 2004 ) explores what could be a possible hazard in the supply concatenation ; Zara is characterized by exclusivity and keeping limited supply, accordingly for case, a costumier that frequently buy at Zara finds a new merchandise but is in limited supply, this client likes what he wants but feels force per unit area because if it does non acquire it instantly, it is certain that it will lose the opportunity to buy it in the close hereafter. As a effect some of Zara ‘s costumiers will be left out.
E-commerce for Zara
Zara has archived enormous success with its retail shops over the universe. So should it expanses on the online market?
The ‘yes ‘ side:
- Zara could acquire in touch with foreign markets that have non been reached so far.
- Improvement in client satisfaction will take to better repute.
- Using cyberspace based gross revenues can be considered a good manner of advertizement.
- Supplying chance for client to look into new merchandises.
- Earn more net income from selling instead than concentrate on retail shops.
- Easier to acquire feedbacks and petitions from clients on specific or general merchandises.
The ‘no ‘ side:
- Cost associated with bringing will go a immense load for concern.
- More sophisticated in direction.
- Heavily investing on Information System / Technology is required to derive benefits and overcome security issues.
- Increasing in menaces of losing confidential information.
- Style copying from rivals is besides a job.
- Customer may non passionate with this new type of dealing since most people prefer to seek on merchandises before doing determination.
To reason, the success of Zara is formed by the outstanding direction in supply opportunity and procedures and the brilliant in execution of Information System. By understanding profoundly the usage and significance of Information System, Zara has applied and improved its usage to construct up the certain triumph in this extremely competition environment. However, Zara should believe of betterments in suited Information System and Technology to derive more competition advantages in the hereafter.
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Zara?s Architectural squad ( Inditex ‘s one-year study 2007, p.34 )
Inditex ‘s conferences ( Inditex ‘s one-year study 2007, p.132 )
Computer room in headquarter in Spain ( BBC-Store Wars )