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Zara Business Analysis

Zara's operational efficiency lies in their quick response to change in trend. Managers respond to newly available garments using hand held devices called PDAs. These "offers" include the description and pictures of newly available and replenishment items. The next process is fulfillment – one of the key aspects of Zara's profitability is to match the supply side and the demand side. The supply side and demand side are kept at the level of Stock Keeping Unit (SKU). The commercials are in charge of making the decision of sending the inventory to the appropriate store for a successful sale based on trends that the store has had in the past. Commercials also ship items to stores with no orders for them just to check the demand of the item. The basic objective is to deliver to the store when and where they need them. The third process is design and manufacturing – Zara introduces new items at a rapid rate throughout the year to ensure short lead times. New items are designed and produced in as less as three weeks, hence meeting customer demands at a rapid rate. .
             Due to their customer centric operations, Zara did not need to predict the trend; they responded to consumer demand and produced apparel as the fashion changed.
             The IT Infrastructure of Zara was built around the principle of the speed of sales and capability of making appropriate decisions. Zara preferred the use of applications that were created by the company team rather than outsourcing the IT or purchasing commercial software. Factories – usage of simple applications for plan production. These plans are generated for the factory managers so as to sequence the jobs. Distribution centers – complexity of automation and computerization is high in the DCs. The systems control the conveyor belt to place the garments at the correct SKU. The information system applications are written in tandem with the vendors of the conveyor belts.


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