...Introduction: In 1975, Zara was founded by Amancio Ortega who is still their largest shareholder and wealthiest man in Spain. Ortega started in 1963 with clothing factories and expanded over time to retail and manufacturing. He believed that all functions should be linked in the apparel industry because consumer demand was very difficult to forecast. In 1985, two important events occurred. The first was the formation of a holding company for Zara and the other retail chains. The second key event was that Jose Maria Castellano Rios joined the company as their IT manager and shared Ortega belief’s that computers were critically important in enabling the type of business they were looking to build. Castellano became Inditex’s CEO in 1997. In addition to believing in the importance of computers, Ortegano and Castellano agreed on two other topics regarding the company: Zara must respond quickly to the needs of their customers and the two and other senior managers must leverage the intelligence and trust the judgment of the employees throughout the company, which is why stores were given the freedom to order what they thought they would be able to sell. Inditex operates 1,558 stores in 45 countries out of which 550 stores are a part of Zara chain and generates 73.3% of Inditex’s sales. Zara offers a large array of new style clothes for Men, Women, and Children couples with moderate price point. Women’s clothing accounts for 60% of Zara’s revenue. Zara has developed the business...
Words: 3163 - Pages: 13
...Fashion EXECUTIVE SUMMARY The action recommended is to purchase a new POS system to support integration of all levels of the business from manufacturing to the customer. Because of Zara’s current solid financial position and leader in the marketplace, Zara will withstand the initial interruption of business to allow implementation of new technology due to their current solid financial position and leadership. KPIs are implemented to provide efficiencies within manufacturing, the DCs and sales to enhance the successful unique business model. ISSUE IDENTIFICATION The following are a list of issues/problems that must be addressed: • DOS system is no longer supported by Microsoft • In-house applications created by vendor • Writing applications versus buying applications • Transparency between stores • Order processing time • No formal IT process for setting budget or deciding on specific technology, investments or projects • Store managers scope of responsibility is high versus no discretion for store layout • No performance measures • No forecasting, buy and respond “on the fly” • Not high end fashion • High capital costs for DCs, manufacturing, and factories • Small batch production ENVIRONMENTAL AND ROOT CAUSE ANALYSIS 1. DOS system is no longer supported by Microsoft since 2003. Zara chooses to write all their applications in house. This matches the philosophy for speed and decentralized decision...
Words: 1742 - Pages: 7
...upgrading the POS terminals? I would advise Salgado to upgrade the POS terminals. However, I would advise him not to buy off the shelf terminals – he would need to find a POS terminal manufacturer that was willing to make custom terminals for the entire chain that are 1) able to be installed by store personnel, 2) could still use the POS application, 3) had network capability (to automatically download sales data to POS controller), 4) be proven to not fail – the equivalent of military small arms testing, and 5) have minimal or no moving parts. I would also advise him that the manufacturer would have to enter into a conditional contract where sufficient new POS terminals could be installed the same day (logistics for Zara is easy) in one market/district and tested for an extended period of time. If at the end of the test the results were favorable, then the entire chain would be switched over to the new POS terminals in what would have to be record time to prevent a lengthy transition period. 1b) Should he upgrade to a modern operating system or rewrite the POS application to include additional functionality? He should rewrite the POS application to include additional functionality. The original POS application has proven its reliability and ease of use. There is no justification to deviate completely from the apparent “gold” standard. The manufacturer of the new POS terminals would have to cater directly to the POS application. A modern operating system would just over-complicate...
Words: 733 - Pages: 3
...in the stability of the POS terminal after the OS upgrade, for the reason that the POS application runs stable on the DOS-system at the time. But, after upgrading the OS and porting the POS application, there is a risk of reducing the stability of the POS application due to bugs in the application (after porting). At the same time the investment costs could be avoided if choosing to remain at the old DOS system. One advantage of upgrading the OS is the fact that the PDAs can become interconnected with other stores or the headquarters. This can increase efficiency as employees will be able to look at the inventory of other stores and search for the products which are sold-out at their own store for instance. Another advantage is that the MS DOS system became obsolete and unsupported as of 2003, which means that the POS terminal will not be compatible with the POS software, and in such manner a change in the OS is inevitable. Therefore, we are in favour of investing in a new OS, and the next question is which OS is the best option. When looking in a short-term view, Linux comes out as the best option, as of €0 license cost and only an annual maintenance fee to be paid. As Zara intends to invest in the OS for long-term period, then UNIX is the best choice for a new OS, in the first place because of the low annual maintenance fee, despite the high license costs. The tables below provide us with the costs necessary for the DOS upgrade of the POS terminals (per store)...
Words: 484 - Pages: 2
...Neiman Marcus Hacking and Securing a POS System John Fischer Security Research Paper 9/22/2014 For several years we have been using the point of sale (POS) system for payment at major retailers. In the last year there have been several attacks on major retailers POS systems. In this paper, I will focus specifically on the breach of security at Neiman Marcus. In this discussion I will explain how to help secure a POS system. Neiman Marcus was founded in 1907 by Herbert Marcus with his sister, Carrie Marcus Neiman, and her husband A.L. Neiman. Their initial investment was $25,000. The original Neiman Marcus was on the corners of Elm and Murphy streets in Dallas, Texas. In 1913 a fire destroyed the companies building and its entire inventory. A new building was built in 1914 on the corners of Main and Ervay, also in Dallas, Texas. Neiman Marcus’ headquarters is still located in this building. Neiman Marcus is a high end retail store. The target market for Neiman Marcus is the top 2% of the income bracket of the United States, plus the wealthiest people around the world. Neiman Marcus retails high end goods such as clothes, jewelry, cosmetics, home furnishings, antiques and even rare books. Neiman Marcus also has an online store, started in 1999, that offers customers access to high end luxury goods. In 1926 Neiman Marcus first issued their holiday catalog. Many different items have been offered in their holiday catalog, including life size robots and jetliners...
Words: 1694 - Pages: 7
...business model they wanted to create. The case study introduces us to two men, Xan Salgado Badas and Bruno Sanchez Ocampo, who are having a discussion about Zara’s POS (Point of Sales) system. Salgado is the head of IT for Inditex, and Sanchez is the technical lead for the POS system. The discussion between the two was to whether the POS system ought to be upgraded, instead of continuing to run on technology that is becoming increasingly outdated. A point that Salgado tries to argue for. Sanchez, on the other hand, argues that the POS systems are working well, and that there is no need for an upgrade that could be more of a headache. The case analysis begin with identification of stakeholders problems, goals and concerns, followed by identification of problems, then an analysis of alternative solutions and end with a summary of difficulties posed and relevance of recommended solutions. Stakeholder Problems, Goals and Concerns Salgado The two principal stakeholders in this particular case are the two men having a discussion about Zara’s POS system. Salgado argues for and upgrade to the system because he fears that there is some risk in letting them get to far behind current technology. The system runs on DOS which is being phased out and replaced with a newer Windows-OS system. The hardware vendor for the POS terminals has made assurances, though not contractual, that no...
Words: 1239 - Pages: 5
...knew that restaurant operations were at the forefront of the updating which meant that they were in need of a serious overhaul of the company’s POS system and back-office support systems. At that time they were using dated Microsoft applications such as MS-DOS and Windows NT server operating systems. These were fine and acceptable the decade before when they were integrated. With the growth and goals that Darden wanted to achieve, a new solution was needed. In the end and looking toward the future, “Darden wanted to reduce the time and cost of maintaining its aging point of service devices, as well as a way to save time and cost of deploying devices to new restaurants.” (Microsoft, 2007) To accomplish this task, Darden asked the assistance of its in-house IT guy, Bob Gentry, whose title is actually Director of Strategic Initiative. The director was able to review many options before choosing a direction to take, but with the help of their hardware supplier, NCR, and Microsoft, Darden was able to list their requirements one on one with both companies and have them present the best solution. Currently, Darden restaurants and the operations that are included within their doors are run by HP ML 350 Series server computers and all stations or work areas are represented by NCR RealPOS 70 devices. The decision to use these servers and POS devices has to do with...
Words: 829 - Pages: 4
...current styles and trends to sell its clothes without advertising. The business fully relies on a team of employees known as “commercials” who make decisions on which clothes are sold in the stores. The company was the pioneer in its niche market in several continents including Asia, Middle East America, Africa, and Europe. The company`s approach to information technology matches its core business model. Although the company has a website-www.zara.com, it is only used for displaying clothes and not for selling. The company prefers to develop its applications internally instead of purchasing commercially available software. As at the publication of this case, Zara was relying on an outdated operating system and a Point of Sale (POS) terminal for its stores. In addition, the company lacked full time network in all its stores. Zara`s POS system operates on DOS infrastructure that is no longer supported by Microsoft. Despite the fact that the system is out of date, it is easy to use and maintain, and...
Words: 2133 - Pages: 9
...retail store of the Inditex group that started in 1975 and has now grown to 531 stores. Zara’s strategic business model focuses on product variety, speed to market, and store locations. The main business idea behind their model is to link customer demand to manufacturing and manufacturing to distribution which they have accomplished through vertical integration. Zara is currently facing the decision to either implement a new operating system or to continue to use the DOS operating system which is no longer supported by Microsoft. In this report we evaluate Zara’s current strategic focuses and evaluate the value chain model. We also take a look at the cost of implementing the new operating system. Alternatives whether to update the operating system, maintain the current operating system, or create an operating system in house are discussed by determining the pros and cons of each solution. A recommendation is given based on the decision criteria to focus on speed to market, connectivity, communication, and reliability to update the operating system. Implementation is not urgent but would be recommended to start in the short run as the benefits to the recommendation show an increase in overall productivity and communications within the company that would transfer over to increase profit margins and revenue. Issue Identification Zara is a retail store of Inditex Group, a clothing company, founded by Amancio Ortega in 1975. He opened the first Zara shop to free up capital by...
Words: 2720 - Pages: 11
...MAHATMA GANDHI UNIVERSITY TIMETABLE FOR B.TECH DEGREE EXAMINATIONS, MAY, 2015 Ref: Notification No. EA I/1/352/2015 dated 18.03.2015 Semester I & II (New Scheme) (2014 Admission Regular, 2013 Admission – Improvement & Supplementary /2010 Admission onwards Supplementary) (Time 9.30 a.m to 12.30 p.m on all days) |Day & Date |Subject |Branch | | | |Thursday |EN010 102 |Common for all branches | | | |07.05.2015 |Engineering Physics | | | | |Monday |EN010 103 Engineering Chemistry & |Common for all branches | | | |11.05.2015 |Environmental | | | | | |Studies | | | | |Wednesday |EN010 101 |Common for all branches | | | |13.05.2015 |Engineering Mathematics-I | | | | |Friday |EN010 106 Basic Civil Engineering...
Words: 5159 - Pages: 21
...Waterloo Regional Police Services: The CIMS Project Background: The fashion industry that Zara plays in are intensively competing in fast market response and wide market coverage. Basically, since the target customers' tastes in fashion change rapidly, it is hard for industry players to not only accurately predict the trends but also put effective influences onto customers. As a result, industry players are trying their best to quickly sense the popularity and then deliver their quality products at the right moments to the right places. Additionally, players especially those large chain brands are expanding their business globally. With more and more new stores opening all over the world, the top players are facing huge chanllenges in creating their business infrastructurs that are capable of supporting faster market growing as well as continuously bring better styles in a timely and cost effective way. Situation: Zara has achieved great success in the fashion industry to be one of the top players since the early 2000s. The unique Zara business model including how they manage production, delivering, retailing, marketing and even decision making truly allows this company to quickly and accurately react to the global market and then delivery exceptional values to customers. Regarding the role IT plays in the Zara model, it is so critical that it ensures the core business functions flow smoothly and reliably. This is quite easy to tell as IT is integrated into every...
Words: 1385 - Pages: 6
...than viruses and malware which are considered as top security threat. It should be noted that an inside malicious user causes more risks than ever. Besides breaching through wireless connection from outside are always should be concerned. These all can be mitigated. Internal treats:- Cutting the risk of these insider breaches requires appropriate systems and processes in place to avoid or reduce human errors caused by inadvertent data leakage, sharing of passwords, and other seemingly harmless actions. Security should be directly built into the business process, independent of the existing network infrastructure and highly sensitive data (such as administrator account passwords, HR files, or intellectual property) are to be preserved in vaults hence protecting the data from the security threats of hackers and the accidental misuse by employees. A digital vault is set up as a single data access channel with only one way in and one way out and also to be protected with multiple layers of integrated security including a firewall, VPN, authentication, access control, and full encryption. The administrative and application identities and passwords are to be changed regularly, highly guarded from unauthorized use, and closely monitored, including full activity capture and recording. Everything should be monitored...
Words: 857 - Pages: 4
...Salgado head of IT,sanchez boss Salgado wants a new POS system. Sancez technical lead for POS Risky to upgrade. Age structure running on DOS, not supported Hw vendor could change so DOS mabe will not be by supported. Maybe they will not be able to grow Sales get recoded in stores and transmitted No issues. Very reliable. Little involvement when expanding. Limited functionality . no networking capability Store managers want more. Cant look at inventory in own stores and other stores. Sanchz does nit think its important. Business Model-link customer demand to manufacturing, and link manufacturing to distribution. Founded in 2003 . owned by Ortega. Started in 1963. Believes that retailing and manufacturing needed to be closely linked in the apparel industry. Castellano (Ceo) was in IT Speed and decision making 2 beliefts (oretega, castellano) responds very quickly to the demands of target customers, who were young and lived in cities. Taste changed quick . hard to predict and hard to influence. Zara even wants to use the faship misses to gain revenue. Ortega, castellano and other senior mgrs. Wanted to take advantage of the intelligence and trust the judgment of emploees throughout the company , instead of reluing on a small set of decision makers. Store managers decided what garments wold be on sales at their stores. They placed orders for the items they thought would sell, rather than simiply accepting and displaying what HQ decided to send...
Words: 1377 - Pages: 6
...great financial growth, but this revenue growth began to slow down in 1998. By 2000, Clothes ‘R’ Us had over-expanded and had the worst gross margins in the industry. In 2001 to reduce costs and regain its competitiveness they started to analyze the problems within the company. They closed unprofitable shops and opened new, profitable ones. To restructure the whole back-office process they wanted to introduce a new POS and credit system in every retail stores. 1. How does the POS Initiative fit into the strategy of Clothes 'R' Us? The strategy of Clothes ‘R’ Us was to increase the revenues and to stop the declines and the POS system was an important point of this strategy. The goal of the POS system was to free up the store manager’s time, to get him work in the store, instead of the back office. This reduces costs and helps the useful allocation of the human resources. The workflow study, mentioned in the case, showed that this could reduce the store manager’s time spent in the office from 6 hours to 1,5-2 hours. The system had other cost-cutting functions like decreasing operating costs and long-distance phone costs, increasing operating efficiencies and store sales due to improved customer interaction and service. For example, reduction of one store sales associate alone would deliver $20,000 per year in salary and benefits, and the new...
Words: 937 - Pages: 4
...ZARA, IT for Fast Fashion Module 1 A Case Study Prepared by Ritwick Banerjee Date of Submission: 29th September, 2010 Executive Summary My decision is to introduce a new operating system (OS) in segments. The plan identifies a number of non critical stores as pilot case. It introduces the new OS and links the Point of Sales (POS) terminals using internet to the information system at La Coruna. The necessary interface applications get written and tested by the applications development group under the pilot scheme. Training is provided to selected staff. Once the efficiency of the system is established, the existing system gets replaced with the new one in segments. This replaces the phone modem and further cuts down the cost of operation. Zara needs new technology to meet the business strategy, sustain the business plan and create better communication. The operating system DOS is no longer supported by its originator Microsoft. The terminals using DOS should upgrade to Linux operating systems. Exhibit 12 states that one time license cost for Linux system is free. A wireless router will improvise the flow of information with 5 terminals averaging per store. Cost for setting up a wireless router per store is 180 pounds in Exhibit 12. Process Elements Zara is a clothing company founded by Amancio Ortega in 1975 whose business strategy was to meet quickly and accurately the demands of the fashion world. Currently worldwide, there are 531 Zara...
Words: 1472 - Pages: 6
