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Module 8 Zara Case Study, What Happened First, What Happened Second, What…
Module 8 Zara Case Study
Relevant Facts
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There still seemed to be duplication of work due to the previously mentioned handheld PDAs they were using for the inventory system. Since they cannot share information with other PDAs in the store, that could mean work is duplicated.
Zara's IT infrastructure doesn't allow for continuous connectivity between POS terminals, PDAs, and HQ. This shows how restrictive information is across stores and HQ.
Both Salgado and Sanchez worry about a massive overhaul and modernization of the infrastructure, as they are concerned about the stability and growing pains that come with implementing new systems.
They are using the very out-dated DOS system. This poses quite a bit of trouble, of course. There are compatibility and support issues when using a system this old.
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Timeline
Next, we get a better understanding of what the process is like for fulfilling orders and how IT infrastructure impacts it. Zara seems to place orders twice a week based on replenishment quantities. This was done by a handheld computer that was connected via dial-up. They worked with essentially two pools of information, and it seems like they manually aggregated orders from all stores and the total supply of inventory in the distribution center.
We start to learn now in the case study that there was never a budget for IT decisions that needed to be made, and there were really no IT processes formally laid out either. The IT infrastructure was shaky at best, it seemed, as we learned that the IT employees were mostly just university graduates. We also learn that instead of using commercially available software for things like tracking inventory and allocations of physical resources, they made them in house and used proprietary software.
Here we see more of the underlying reasoning behind the decisions that may or may not happen. We learn that the computer and IT infrastructure are very important to the business model as a whole due to the industry they are in. They emphasize decentralized decision-making amongst their employees and insist that system stability is vital to being able to meet demand as quickly as they need to in the fashion industry.
Next, we learn that no stores are connected in any way. There's no great way to transmit data from store to store or store to HQ. They have to manually transfer data using floppy disks within the same store.
We are introduced to Sanchez and Salgado. They are discussing whether or not they should upgrade the systems from the DOS they are running on POS machines. Sancherz said that they didn't need to upgrade since they're stable. Salgado said that they should be worried about support and future compatibility.
Lastly, we learn that there are concerns from Salgado and Sanchez over the upgrades that could take place to improve the IT infrastructure. They worry about jeopardizing the current infrastructure while also acknowledging the need to keep up with technological updates. They consider whether to port the POS application to a new operating system and build new capabilities into the software, including wireless networks and real-time inventory tracking. They seem to be hesitant, to say the least, since things are still running smoothly for the time being.
Key Problems
POS terminals using DOS
Consequence
The consequence here is that there may be multiple risks for Zara as there is basically no support for the DOS POS machines and there is no compatibility for future programs that may offer more functions and features.
How Does it Impact IT
The IT infrastructure is at risk of being obsolete and could potentially cause major issues to store and inventory operations if they do not upgrade the system software.
How does it happen
Zara presumably initially chose DOS and continued to make internal house-made software for the POS machines since they were stable and easy to maintain.
Lack of connectivity and information sharing between POS machines, PDAs, stores, and HQ
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How does it impact IT
It impacts IT because it could duplicate work that otherwise would not need to be done multiple times. It limits the support that IT can provide with such outdated processes and methods.
How Does it Happen
This is just inherently how the work is done, it seems. They made manual processes for these things, such as using the floppy disks and making phone calls between stores to check inventory.
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