Zara: It for Fast Fashion Essay Example

limitations posed by their current MS-DOS system. This outdated system will encounter difficulties as hard drive manufacturers cease to support the XP operating system after 2012. Furthermore, these new hard drives will no longer provide support for XP, despite it being more recent than MS-DOS (Brownlee, 2010).

The lack of visibility leads to a lack of inventory knowledge throughout store networks, including stock counts that can only be measured through physical counts. It also results in a lack of knowledge about best-selling items. This lack of both internal and external visibility creates problems with product ordering and customer service. For instance, if a customer comes to a store looking for an item that is currently out of stock, the manager or employees cannot use the current POS system to check the inventory at other stores. They have to call other locations, which also cannot check inventory unless they physically search their store. This technique is highly inefficient and provides limited customer service, as customers have to wait while employees search for the desired merchandise. Additionally, employees cannot see if an out-of-stock item will be delivered later or if that specific Zara location was not chosen to receive a limited item.

Both employees and consumers are evidently frustrated and dissatisfied with this system. The ordering issues and data transmission to the head office pose another major problem. As part of their strategy, Zara and Inditex empower store managers to order items. However, there is a need for Zara to simplify the process while still allowing managers to retain control. Currently, store managers and employees use PDAs with small screens that are difficult to type on. Each section's responsible

employees compile an item list for ordering, which is then sent to the manager for consolidation, verification, and submission to the head office.

The PDA is used by multiple employees to complete this task twice a week. A better system could simplify and improve this process, reducing labor and increasing accuracy in order quantities. This is crucial for organizations aiming to limit their inventory. Furthermore, there is a related issue concerning the daily transmission of data to the head office.

The collection of data from each POS location is a time-consuming task for employees. They have to carry a disk and gather the day's information by walking around. Subsequently, they combine the data on a machine that is connected via modem and send it to the head office. This entire process would greatly benefit from significant improvement.
Additionally, the poor POS system creates difficulties when customers want to return products to the store. Employees have to rely on their PDAs to assist customers with the return process. However, according to store managers, using the small screens and styluses of the PDAs for returns takes up a lot of time. This issue frustrates both employees, who have to work with a small and inefficient screen, and customers, who may experience longer wait times for completing their returns.

Customer satisfaction is of utmost importance for businesses like Zara and Inditex, particularly in relation to product returns. The satisfaction of customers significantly influences their decision to remain loyal or switch to alternative options. At present, Zara and Inditex confront several unresolved challenges that require attention to ensure the efficient and profitable functioning of Zara. However, potential solutions for these problems will be

explored in the following section. As previously mentioned, these issues revolve around the POS and OS systems employed by Zara, which facilitate the transmission of data both internally and externally.

The text discusses the need to update the current POS and OS systems. It presents three options for addressing this issue: keeping the existing systems as they are, gradually replacing them, or replacing all systems companywide. To evaluate these choices, a set of decision criteria is established, including implementation time, cost, acceptability by management, and benefits obtained. The first option is then compared against these criteria, noting that there would be no immediate time constraint or cost change but potential complications in the future if the vendor discontinues their systems. Management should acknowledge the problems associated with neglecting their current information systems.

In today's dynamic business world, it is crucial for companies to take proactive rather than reactive measures. This means that if competitors have superior information systems and there is a risk of losing supply from the vendor, action should be taken. By doing so, companies can save costs which can then be utilized in other areas instead of instant upgrades. However, it's important to recognize that these savings may be at risk if unexpected attention and system changes become necessary.

The company can choose to replace its operating system (OS) and point-of-sale (POS) systems, but it is not possible to do so at the same time. This would be a time-consuming process. Upgrading the systems gradually per location would also take time and require assistance from on-site IT managers during the transition. Both managers and employees would need training for the new system. However, the training

duration may not be excessively long due to its simplicity.

Cost: Although this alternative may be expensive, it has the advantage of being easily halted if necessary. The implementation is being done gradually, allowing for minimal damage in case anything goes wrong or causes major issues for the company. This approach serves as a way to mitigate potential disasters.

Acceptability to Management: It is unlikely that management will fully appreciate the benefits of this alternative, as its greatest advantage could also be its biggest drawback. The main benefit lies in not changing the entire system all at once, thus avoiding disruption of the internal store-to-store networks that did not exist initially. However, if they decide to halt implementation for any reason, it may result in some stores being changed while others remain unchanged, potentially causing problems.

Benefits Yielded: The primary benefit is that once the full implementation is completed, the company will have an updated OS system. This update enables stores to track trends and inventory across locations and eliminates inefficiencies caused by physical inventory counts. Another significant advantage of gradual implementation is having the ability to test new systems and observe ongoing results to determine their actual effectiveness.

3. The company needs to immediately replace all the OS and POS systems. This would require a significant amount of time and planning to ensure a smooth transition. It would be faster than the alternative of gradually implementing the new systems in each area and store. The initial cost to the company would be high, as they would need to outsource installation labor or even send workers abroad. Additionally, the process of installing the equipment and training employees on the

new systems would take time. This could potentially disrupt consumer purchase patterns and negatively impact store sales if employees are not familiar with the new system.

The cost of changing Zara's information systems should be justifiable considering the company's current operating cash flows estimated at over 900 million Euros. This change should not negatively impact their cash flow. However, management may be uneasy with this alternative due to the significant alteration required to the company's operating systems. They would need to weigh the capital costs of this change against the future benefits of becoming a more sustainable player in the industry. It is evident that the company must eventually update their systems to remain competitive in the apparel market. Therefore, we can conclude that management would support this alternative as long as precautions are taken and a strong plan is implemented to minimize risks and expenses.

The benefits obtained would be significant for the company. By changing their information systems, they would have the ability to share data and check inventories at other stores. This change would eliminate the need for a PDA and physical inventory counts. The advantages of this change outweigh any negatives, and it is important for the company to embrace change in order to succeed. Additionally, another positive benefit would be the elimination of the need to phone-in orders; the new operating system will automatically handle this process. After examining Zara and Inditex's situation and considering various solutions, we recommend immediately replacing all POS and OS companywide to sustain their competitive advantage in the apparel industry.

According to Articlesbase (2009), an efficient and upgraded operating system accompanied by a proficient point-of-sale system will benefit

Zara and Inditex in various ways. These benefits include accurate results based on individual price scanning, easy inventory management, evaluation of sales patterns, off-site access through web-based POS systems, and improved sales and customer service. To successfully implement new POS systems and operating system, Zara must carefully design a detailed outline for an effective transition. They should first choose a vendor specializing in retail systems that can accommodate the latest operating systems and potential changes. The company may consider outsourcing installation labor to specialists familiar with vendors, networks, and operating systems (Kerhulas, 1991). Although this initial cost is high, it will ultimately reduce expenses in the long run by ensuring an efficient and fast transition. After installing the new systems, the company must focus on maintaining the existing POS system until they are ready to convert to the new system comfortably.

(Carey, 1989) The store must be careful not to disrupt current operations or upset customers and employees while implementing any changes. Proper training and education should be provided to employees, managers, and all system users. Zara can achieve this by running mandatory training sessions or continuing to use the old systems while training employees on the new ones. This approach will prevent setbacks and employee frustration, ensuring a smooth transition. Therefore, our recommended alternative and implementation plan will benefit the company by avoiding sudden loss of vendor support, eliminating the inefficiency of current PDAs, accommodating store and company networks, providing inventory and sales information, increasing profits and customer satisfaction, and ultimately giving the company a significant competitive advantage.

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According to a report by Carey, hard drive manufacturers will no longer support Windows XP and DOS after 2012. This information is available at http://www.com/articles/gadgets/hard-drive-manufacturers-to-stop-supporting-windows-xp-and-dos-by-2012-20100310.

In an article titled "Site Preparation Key to Successful POS Installation" by Christopher J. Carey, published on 9 January 1989, it is emphasized that proper site preparation is essential for a successful POS installation. This article can be found on BNET at http://findarticles.

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Benefits of a Retail POS System. Published in 2008. Accessed on 5 April 2010 at <http://www.retailsystems.com/benefits-of-a-retail-pos-system.

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