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Zara Case Study - Coggle Diagram

- - - - Zara has no formal processes for setting an IT budget, deciding on specific technology investments or projects, little or no formal justification for IT efforts, and no cost/benefit analyses typically conducted.
    - - Bruno Sanchez Ocampo, the technical leader for the current POS system at Zara, belives that because the current POS system does not have any issues, there is no reason to upgrade it or move to a new technology
    - - Lack of expressed support by the entirety of the IT department to expand IT processes and systems.
    - - The PDA and POS sytstems are outdated, resulting in lack of modern features, ease of use problems on the PDA, and vulnerability to POS hardware no longer supporting the old system.
    - - There are no impacts to the IT group, as there is a lack of desire to upgrade systems and a lack of a need to provide support for the current POS systems, as they are extremely hands off and mostly self sustaining within the individual stores.
    - - This impacted the organization by providing a lack of modern and advanced features that would be helpful to on-site workers and other departments, such as a lack of ease of use for PDA handheld systems and lack of digital information being shared between stores.
    - - The entirety of the IT department, particularly Sanchez, are responsible because they do not express a need to upgrade systems or have the ability to undertake new initiatives.
- - - - Zara's highly automated distribution centers are set up to handle large quantities of garments and coordinate shipments to stores.
        
        In 1995, Zara introduces handheld PDAs to replace the time-consuming and error-prone fax-based ordering process.
        
        Zara continues using DOS-based POS terminals in stores, despite the lack of ongoing support from Microsoft.
        
        Zara stores operate without in-store networks, relying on floppy disks and modems for communication with headquarters.
        
        Store personnel must call other stores to check SKU availability due to the lack of information sharing between POS terminals and PDAs or between stores.
        
        Management considers upgrading to a modern OS with additional features and capabilities, as well as implementing in-store and inter-store networks.
        
        1 more item...
- - - - The problem exists due to the outdated operating system used by Zara's POS terminals
    - - Reluctance to upgrade IT systems and infrastructure; Lack of formal IT budget and cost/benefit analysis for IT investments and projects
    - - Zara's approach to information technology was decentralized, with no chief information officer and no formal processes for setting an IT budget or deciding on specific technology investments or projects.
    - - Zara could have considered updating their POS application and technology infrastructure earlier, rather than relying on an outdated and potentially unsupported system.
        Zara could have implemented a more centralized IT department with formal processes for setting an IT budget and making specific technology investments.
    - - The use of an obsolete operating system creates the risk of hardware vendors discontinuing support for the system, causing potential operational disruptions.
    - - The IT group had to rely on outdated technologies and had limited opportunities to innovate or experiment with new technologies.
    - - The organization's operational efficiency could have been affected by the inability to access real-time inventory data and inability to transfer inventory between stores online.
- - - - The main goal is to quickly and accurately respond to the customer and its demands. But with the change in "trends" you are having to regularly shift all aspects of the business to meet these orders.
    - - The original idea of the business was to be able to control the design, production, shipping, display, promotions and all the vertical integration. Zara buys large quantities of only a few types of fabric but with the constant changing of trends this will constantly be changing to meet the demands of that. You can move to the next level of production and Zara designs its apparel every two weeks, this strain on the worker who must meet the unique demands of fashion.
    - - The strategic approach to its operations is to quickly produce and distribute its product. Zara has wanted to maintain control of its centralized business model.
    - - This is the trickiest part of the problem, with wanting to stay self-flexible in its process if you were to change one strategy then the system wouldn't function. For example, if you were to change the distribution center or "The Cube" you are losing out on the way fulfillment happens. So, you have to replicate this system wherever you want stores.
    - - The strain of having to meet the unique demands of design trends. Every level of Zara's model comes with waiting, you have to wait on what material you want to buy, you have to wait on the fashion designers to design, then you have to wait for the factories to be able to design unique patterns consistently. So, this could have consequences of a stressful and fast environment.
    - - with the outdated systems you could run into the issue of a total production halt because of that. With how everything runs off of a quick turnover rate that could be a major issue in production.