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Zara Fo It Fast Fashion

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Submitted By vs78410
Words 285
Pages 2
ZARA :IT FOR FAST FASHION CASE

EXECUTIVE SUMMARY

I would highly recommend a company like Zara to adopt new windows/ Linux based operating system. Skyscrapers are not built on weak foundations and in this case, everyday, the company is achieving new heights. Their SCM is fast and flawless, but if the terminal vendor changes it's machine design and makes it incompatible with DOS, the success story will be in doldrums. Even if the IT department buys enough POS terminals, it still means the company is putting a limit on its growth. Will the company not open any more stores when their inventory for POS terminals depletes out? Speed is the essence in today's business and a speedy supply chain is the real strength of ZARA. There is no point in keeping a lame horse in a stable of fast ones. With the new system in place, every location can have a theoretical inventory of all stores. Unsold merchandise from a location can be quick and cost effectively moved to another close location, thus giving better response time to customer demands as well as saving transportation costs. On the cost front, the total cost for upgrading the system is 13.3 Million Euros, and with debt to assets ratio of just 41.57%, upgradation cost can be very easily met. Also the company has fixed assets to current ratio of 123 %, which is way higher than any competitor, and with this high ratio coupled with technology upgradation, can highly increase the company's operating profits when the volumes will increase in times to come.
Though changing the IT system platform is a tough process but it is necessary for achieving long term goals for the...

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