Zara's business model relies on three cyclical processes: ordering, fulfillment, and design/ordering. Store managers place orders twice weekly based on in-store inventory levels. A dedicated team fulfills orders by balancing store needs with distribution center inventory. Product managers work closely with stores and designers to quickly introduce new items based on fashion trends. Zara focuses on fast fashion over classics, relies on vertical integration for quick production/delivery, and minimizes inventory throughout the supply chain. It succeeds through responsiveness rather than advertising or long-term forecasting.

1. Information Systems
ASSIGNMENT - 5
ZARA
GROUP – 8 SECTION F
Mugdha| Harshil| Syed Jibran| Nikhil| Sudipto| Vamshi| Rosemary

2. 1. Business model & information needed to operate
• Focus was on being able to respond very quickly to the demands of target customers (young, fashion-conscious city dwellers);
concentrated on fads and did not try to produce ‘classics’
• Gave much more authority to store managers for making decisions; but no say in design of the store
• Group of people called ‘Commercials’: a dedicated team for each section of the store and within that, to a specific collection did the
designing & conceptualization
• A group of Product managers served as HQs main interface with Zara stores around the world; also determined the garment prices
• Zara did virtually no advertising; ads only to promote its twice yearly sales; minimal marketing expenditures
• Spent relatively heavily on stores; located in a city’s prime retail district
• Did not sell clothes over the internet; website existed only as a digital display window
• 3 cyclical processes to accomplish its goals- i) ordering ii) fulfilment iii) design & ordering
• Order had to be placed to La Coruna twice a week on average and for this the store managers had to canvass the entire store to find
which items to order
• Fulfilment was handled by another group of commercials and they had to work with 2 pools of information: aggregated orders from all
stores & total supply of inventory in the DC at the same point in time
• There was little inventory anywhere in Zara’s supply chain; production and delivery of only what the stores needed and when they
needed it
• Product managers also learnt about the viability of new products if introduced; vertically integrated manufacturing operations enabled
constant introduction of new items and ensured shorter lead times; this speed enabled Zara to respond to fast changing demands
• All this ensured that the company did not have to rely on accurate long-range sales forecast

3. 3. Advice to Salgado on the issue of upgrading
Zara’s POS terminals
They should upgrade their POS terminals
• Zara is the only customer of its vendors using DOS and vendors might upgrade their machines which are not DOS
compatible.
• Vendors were not ready to sign contracts when they were asked to give assurances of not changing their system.
• Zara was growing rapidly but using more and more obsolete operating system which can harm them in the future.
• Their current PDAs are time consuming for the vendors to use their small screens and stylus. So, updated POS
application could incorporate the better functionality and facility to use large screens to execute transactions.
• Upgraded POS terminals can accommodate new capabilities, especially connecting through networks within stores
as well as across the company.
• Wireless networks can help Zara stores to know the theoretical inventory of all SKUs in all its stores and also to
request inventory transfer from one another online and hence eliminate the need of phone calls.
• Centralized data can help Zara to expand in different countries.
• There is ample of growth opportunity available in Asian continent which would require new system.