Executive Summery The Zara case study is a case of the fundamental of whether or not to upgrade an IT system which already works, in this case a POS operating system that uses DOS, to more modern operating systems that includes more functionality to meet new demands.
Zara is a chain fashion store around Europe, Middle East, Africa, and South America that was founded by Amancio Ortega, in 1975. The first store and main headquarters was found in La Cournia, Spain. Mr. Ortega believed and implemented his business model that: Retailing and manufacturing needed to be closely linked. This created the backbone for Zara’s everyday functionality to have all the stores communicate with the main distributors and distribution centers (DCs)
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When analyzing the company, many problems arose that centered on the company using an obsolete DOS operating system. Key problems found were that managers are spending too much time on ordering information. POS systems are not linked and there for information cannot be shared between them. As a result, information regarding internal and external inventory cannot be accessed. Further analysis reveals that due to the increase in demand for more proficient, up-to-date operating systems, DOS has been replaced by many companies, leaving Inditex as one of their vendor’s only customers. Moreover, if their vendor is no longer provided with the DOS hardware, Inditex is left without and operating system. Inditex has the option of waiting until this threat becomes a reality, or to purchase the new operating systems now. The report evaluates these problems and concludes that it would be ideal for a new Windows operating system to be purchased immediately and implemented effectively within the next two years. It recommends that inventory systems be changed so that an actual on hand inventory count is known, interaction is allowed between internal POS systems as well as external nearby store inventory systems, and that the new system is widely used by all supply chains in each segment of Inditex.