3 Information Systems Technology and Strategy ZARA.docx
Information Systems: Technology and Strategy – ZARA
Zara: highly vertically integrated – keeping huge swaths of its production process
in-house – speed up complex tasks, lower cycle time, reduce error.
Contract manufacturing: cheap labour in developing countries can keep the cost
of goods low.
o Often ignore environmental concerns, employ child labour, and engage in
other ghastly practices.
o Reebok invested millions in developing an in-house information system to
track audits of its hundreds of suppliers along dimensions such as labour,
safety, and environmental practices.
Zara’s secrets to success
o Personal digital assistants (PDAs): handheld computing devices to gather
customer input, staff regularly chat up customers to gain feedback on what
they’d like to see more.
o Point-of-sale (POS) system: a transaction processing system that captures
customer purchase information – showing how garments rank by sales.
o Design: rather than create trends by pushing new lines via catwalk fashion
shows, Zara designs follow evidence of customer demand.
Young and hungry designers, individual bonuses tied to the
success of the team, rotated teams
o Manufacturing and logistics: getting locally targeted designs quickly onto
store shelves. The firm is so responsive through a competitor-crushing
combination of vertical integration (several layers in its value chain) and
technology-orchestrated coordination of suppliers, just-in-time
manufacturing, and finely tuned logistics.
The firm makes 40 percent of its own fabric and purchases most of
its dyes from its own subsidiary. Roughly half of the cloth arrives
undyed so the firm can respond as any m