Textbook Notes (363,666)
Canada (158,520)
MGCR 331 (36)
Chapter 3

MGCR 331 Chapter 3: Chapter 3

4 Pages
Unlock Document

Management Core
MGCR 331
Richard Donovan

1. Information systems – Chapter 3: Zara – Fast fashion from Savvy systems 3.1 Introduction - Zara is part of the multibrand empire of Inditex Corporation - Situated in La Coruna - Shuns advertising, rarely runs sales - Inditex is highly vertically integrated, keeping huge swaths of its production process in-house Why study Zara? - One of the fastest global expansions the fashion world has ever seen, opening one store per day and entering new markets worldwide Gap: An icon in crisis - Inventory = death - When sales went down, he started chasing the youth market by filling his stores with miniskirts, low-rise jeans, and purple leather pants - Bad bets on colors and styles - Closure of hundreds of stores Contract manufacturing: Lower costs at what cost? - Leveraging cheap contract manufacturing in developing countries can keep the cost of goods low  There are downsides, to have the low-cost bid, contract firms skimp on safety, ignore environmental concerns, employ child labor, and engage in other ghastly practices - Bangladesh Rana Plaza disaster - Brand damaging  repel new hires, turn off customers, leave current staff feeling betrayed Tech for good: The fair factories clearinghouse - Even well-meaning firms can find themselves stung by corner-cutting partners that hide practices from auditors or truck products in from unmonitored off-site locations - Reebok  Human dignity key platform for its philanthropic efforts  Vice president of Human rights  Created the non-profit organization Fair Factories Clearinghouse (to share the info) - Suppliers across industries now recognize that if they behave irresponsibly the Fair Factories system will carry a record of their misdeeds, notifying all members to avoid the firm 3.2 Don’t guess, gather data - Zara’s store managers lead an intelligence-gathering effort that heavily influences the products that the firm produces  Ask question about colors, length, round/v-neck  Preferences in cloth, color, styles  Send the insights back to headquarters  Motivated to use the systems because they have skin in the game (store sale performance, ++10% of the firm’s overall profit increase shared across all firm employees) - Information on what’s selling is also tallied via the stores’ point-of-sale (POS) system (cash register) - Leverages staff to gather more dada via PDA and other means  What customers want to see on the shelves at a given location Design - Follows evidence of customer demand - 300 designers - 30,000 items a year (VS. 2000 to 4000 offered at like H&M) - Relies heavily on young, hungry Project Runaway types fresh from design school Manufacturing and logistics - 15 days to get an idea to stores (versus new styles once or twice a season) - 12X faster than Gap despite offering roughly 10X more unique products - H&M takes 3 to 5 months to go from creation to delivery - Responsive through a competitor-crushing combination of vertical integration and technology-orchestrated coordination of suppliers, just-in-time manufacturing, and finely tuned logistics - Vertical integration: When a firm owns several layers in its value chain - Nearly 60% is produced in-house - Inventory optimization models help the firm determine how many of which items in which sizes should be delivered to each specific store during twice-weekly shipments - Fabric is cut and dyed by robots in 23 highly automated factories  40% - Half of the fabric arrives undyed - When cotton price
More Less

Related notes for MGCR 331

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.