Zara Pos System Case Study Essay

1334 Words Mar 7th, 2013 6 Pages
Case Study: Zara: IT for Fashion

Background
Zara, high fashion clothing producer and retailer, opened its first store in Galicia, Spain in 1975, and by 2003, had grown to 550 stores worldwide. Zara is the largest holding of its mother company, Inditex, and is evaluating whether to invest in modernizing its IT infrastructure, specifically its in-store Point-of-Sale (POS) terminals which are running a DOS Operating System that is now EOL.
Business Model
Zara has a unique and very effective business model; it operates with a philosophy to give customers what they want faster than its competitors. It produces “short life span” apparel and can quickly adjust its supply and designs to meet current customer demand, contrary to traditional
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The POS units are not interconnected to each other, and only one of the units in the store has a modem connection used to transfer sales data and place orders with Headquarters in La Coruña, Spain, but they cannot communicate with any of the other stores which limit their ability to quickly check for merchandise availability outside their own store. Daily sale details are collected from each terminal at the end of the day through a floppy disk and manually carried to the central POS unit to be sent to Headquarters via modem. Store employees also carry personal digital assistants (PDAs) into which inventory records are manually entered by SKU number. PDAs were also used to divide the work of evaluating “the offer” (new merchandise available from headquarters) by experienced sales team members. The various PDA input is then reviewed by the store manager in order to decide what existing merchandise needs to be replenished and what new merchandise should be ordered next.
While the PDAs were regularly updated to newer models, the POS Hardware and O/S had not been updated in a very long time. Zara is evaluating the pros and cons associated with upgrading to a newer operating system such as Linux or Windows. While the current system is simple, stable, and has low maintenance cost, the biggest risk is that the POS terminal vendor could upgrade the hardware so that it is no longer compatible with DOS. While the vendor

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