Zara Case Study

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TABLE OF CONTENTS

INTRODUCTION ……………………………………………………………………….. 3

QUESTION 1 ……………………………………………………………………………. 4-6

QUESTION 2 ……………………………………………………………………………. 7-8

QUESTION 3 ……………………………………………………………………………. 9-10

CONCLUSION …………………………………………………………………………... 11

REFERENCES ………………………………………………………………………….. 12-13

INTRODUCTION

In the beginning era of computing, most of the computing system was custom made according to the needs of the organization, it also known as one time develops solution.  However, in today world, most of the computing systems that develop may suit many organizations as organization may face the similar problems with another organization, hence in today world; most of the information system is accurately categorized.  Most organization today are hierarchical, I believe ZARA are practicing the same concept as well so they might also classify their information system in a pyramid model, this is to split the nature of the task which found in different levels in an organizations.  In ZARA environment, their organization might having four level of pyramid model which is Executive Information Systems, Decision Support Systems, Management Information Systems, and Transaction Processing Systems.  The roles of TPS are normally referring to simple data processing systems which playing a role of generating reports. Example that TPS that ZARA might use is payroll system, order processing systems, stock control system and etc.  Since is a pyramid model, normally the information system is related to one and another which means the higher level of IS such as Management Information System are built on the data provided by TPS.  MIS usually play the roles of sorting, merging, summarizing the structured data to be an output of summary reports, detailed reports.  ZARA might use Sales Management Systems, Inventory Control Systems, and Budgeting System, which categorized as Management Information system.  Decision support systems are referring to the Financial Planning systems, Group Decision Support systems which playing the roles of summarizing the internal transaction and external information to be a forecasts reporting.  The highest level of the pyramid model will be the Executive Information Systems; this system normally helps the top level of management to identify long term trends and play appropriate action.

QUESTION 1

Explain how information system relates the way ZARA run it business.  What types of systems are the most essential for this company in its current environment?

As a summarization of the case study, ZARA is a largest and profitable, and international chain store.  The key success of ZARA organization is the speed-to-market which means ZARA need a business system that can manage their in-house production, quick response and centralized distribution center.  According to the case study, ZARA able to lower the advertising cost by having the advantages of split second time to the market which lead ZARA maintaining low advertising cost.  In additional, ZARA has its own factory which 50% of the items are self-production.

ZARA implement IS for all perspective that they can to speed up the process as they understand one of the key element of success is speed, information system act an important roles at ZARA factories, stores and distribution centers since they are practicing of vertical integration strategies.  At factories or so called production line, ZARA determines the types of fashion by getting the input of the numbers of daily sales; the designers have the information to help them to decide the fabric type, cut, color, texture to help them to design new cloth or modifying the existing ones.  In stores, ZARA have Inventory optimization models (TPS & MIS) to analysis the numbers of quantity needs by the retail store, this will ensuring the stores received correct quantity that they need.  This actually helps out ZARA to sort out of building up unpopular stock demand. Further add-on to the inventory optimization, batches that delivered are small so the risk of the created design does not sell well wouldn’t cause issue on it.  A digital order form (TPS) will send to each stores’ by distribution centre, the digital order form will only content the information of newly available items availability and replenish items, based on the digital order form, manager will placed an order twice a week to replenish their inventory.  Actually the digital order form already sort out the garment availability, regional sales pattern and predictions about future sales pattern in individual geographical location, this is where does IS play it roles as supportive tools to the organization.

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