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3 Information Systems Technology and Strategy ZARA.docx

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McGill University
Management Core
MGCR 331
Fatou Bagayogo

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
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