Information Systems and Operations Management

Please read the name Zara unbendable fashion from savvy systems available for free at http//www. flatworldknowledge. com/pub/gallaugher/41128pdf-7 This article makes up Chapter 1 of the free, open access book titled, Information Systems A Managers Guide to Harnessing engineering science, by John Gallaugher. Please ensure that you read the complete Chapter 1 of the book consisting of 3 parts ( dispel 1 Introduction Part 2 Dont Guess, Gather Data and Part 3 Moving Forward). Now answer the questions be base Question 1 The Zara subject ara shows how education systems crumb impact every single heed discipline.Which focusing disciplines were mentioned in this campaign and how does engine room impact all(prenominal)? (50% of the total mark) The case study mentioned management disciplines including discipline gathering, processing, storing, distributing and use of information. Gather market information One of the successful factors in Zara is they know the market modes. Zara d eploys the latest information technology tools to facilitate the information exchange and collect market info by both formal and informal logical arguments the PDA and POS systems.The private Digital Assistants (PDA) system Zaras gunstock managers were given personal digital assistants (PDAs) so they could gather customer input outside an office setting. The lag in Zara would on a regular basis gather information from customers, such as the foreshorten of fashion customers preferred and feedbacks of garment that they would like to see more than in the denounce. The range of information collected allowd colours, length and even excellent detail of the clothes were collected from customers through front line shop staff.Besides acquiring information directly from customers, they staff have a nonher channel to gather customers preferences. The staff will investigate the unsold items that customers tried on but didnt buy, to find out their preferences in cloth, color, or st yles offered among the products in stock. The Point-of-sale (POS) system Besides the informal channel to gather customers ask (through conversations), the betoken office will collect information through a formal channel, the stores point-of-sale (POS) system.This system is a performance process that captures customer purchase information, in order to show how garments rank(a) by sales. Since the POS system is linked with the PDA system, in less than an hour, managers bathroom send updates that combine the hard data captured at the cash annals with insights on what customers would like to see. Information on customer needs and disregard information collected daily atomic number 18 fed into a database at head office regularly. The PDAs support the connection mingled with the retail stores and head office.Each store managers are assigned with market specialists, they will communicate regularly through PDAs to transmit all kinds of information to head office. 1 Zara store manag ement and staff use PDAs and POS systems to gather and analyze customer preference data to plan future designs based on feedback, or else than prediction. Data dictated product development The data collected from PDA as strong as POS system formed a valuable marketing database and provided data digests the design teams to plan styles and issue re-buy orders based on feedback rather than hunches and guesswork.The refinement is to improve the absolute frequency and quality of decisions made by the design and mean teams. The designers from The Cube fol upset evidence of customer demand. When they deign new garments or decide which kind of fabric, cut and equipment casualty points to be used or modify living designs, they will base on information from PDAs and POS rather than create trends by pushing new lines via advertisements or catwalk fashion shows. vertically corporate prise chain Inditex is a vertically integrated group, it owns several(prenominal) layers in its value chain.The dispersal center in La Coruna fit out with up-to-date equipment for fabric dyeing and processing, cutting and garment finishing. The vertically integrated ability allows the group to response faster against the latest fashion trend including provide the appropriate for new lines. Zaras IT expenditures are low by fashion industry standards. The spectacular benefits reaped by Zara from the deployment of technology have resulted from targeting technology enthronisation at the points in the value chain where it has the greatest impact, and not from the sheer magnitude of the investment.This is in stark contrast to Pradas get it on with in-store technology deployment. Inventory control Zara uses Toyota-designed logistics system and oernight parcel service to manipulate items stocked in the five-million-square-foot distribution center in La Coruna, or a similar facility in Zaragoza in the atomic number 10 of Spain. About two and a half million items were handled every work week and none of them stayed in the warehouses more than 3 days. Before sending to all(prenominal) store, clothes are ironed in advance and packed on hangers, with security and price tags fixed beforehand.This system helps staff in Zara expend their snip efficiently with the inventory during busy periods. Just-in-time manufacturing (JIT) The JIT approach to manufacturing involves timing the deliverance of resources so that they arrive just when needed. Inventory optimization models help the blind drunk determine how many of which items in which sizes should be delivered to each specific store during twice-weekly shipments, ensuring that each store is stocked with just what it needs.Trucks serve destinations that crumb be reached overnight, while chartered cargo flights serve farther destinations indoors cardinal hours. And the firm can coordinate outbound shipment of all Inditex brands with reach legs loaded with raw clobbers and half-finished clothes items from locations out-side of Spain thanks to the revised shipping models through Air FranceKLM Cargo and Emirates Air. Zaras products are manufactured for a extra production run. This approach encourages customers to buy right away and at all-encompassing price.The constant parade of new, limited-run items also encourages customers to visit often. Staff allocation Headquarter of Zara uses software product to arrange staffs roster. The manpower is allocated based on each stores forecasted sales pot, with locations staffing up at peak generation such as lunch or early evening. The firm claims these more flexible schedules have shaved staff work hours by 2 percent. This constant refinement of operations throughout the firms value chain has helped reverse a prior trend of costs wage increase faster than sales.Zaras combination of vertical integration and technology-orchestrated supplier coordination, just-in-time manufacturing, and logistics allows it to go from design to shelf in days instead of m onths. pic Question 2 Do you think information systems are a strategic indebtedness for Zara? Give reasons. (50% of the total mark) Porters five forces analysis To register the business condition of fashion industry, we need to use Porters five forces model. It is shown how the market behaved at the very beginning of the company fit to the Porters 5 forces analysis.Bargaining Power of Suppliers This is how much pressure suppliers can place on a business. If one supplier has a life-sized enough impact to affect a companys margins and volumes, and then they hold substantial power. There are many suppliers for raw solid There are many supersedes Presence of fill-in inputs The nature of the products allow to storage them long time, unless the trends conditions. Bargaining Power of customers This is how much pressure customers can place on a business. Switching to another ( private-enterprise(a)) product is open The product is not extremely important to the buyer they can do without it for a period of time. Customers are price sensitive Buyer do not have switching costs Many availabilities of existing substitute products Buyer is price and style sensitive Low purchase volume per customer. Highly dynamic, customers preference changes frequently in short time hawkish rivalry within an industry This describes the intensity of competition between existing firms in an industry. Garment industry is highly competitive generally pass low returns.For many industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals grapple aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etcetera It is a mature industry with very little growth. Companies can totally grow by stealing customers away from competitors. It has a lot competitors in the industry about the same size Little differentiation between competitors products and services. Key competitors include Gap,, Benetton, H , Forever 21 , etc.Pfeifer, (2008) Rohwedder and Johnson, (2008) H has increased the frequency of new items in stores, Forever 21 and Uniqlo get new looks within 6 weeks and Benetton, a firm that previously closed some 90 percent of US stores, now replenishes stores as fast as one time a week The barriers to get out of the industry are low in distribution and high in manufacture Since the chances of clothes getting damaged before sold is very little, the storage costs would be low High manufacture costs because of high raw material cost and manpower cost nemesis of new Entrants No distribution barriers to entrance because it only consists on low costs of renting a shop, no administrative restrictions, low initial capital to start trim down reaction possibilities in front of new entrants In production, there are barriers for the existence of economies of scale. The start up capital needed is high convey time to build up relationship with supply chain and suppliers Threat o f substitute products What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses to be a serious threat. Buyer can easily found substitute Relative price performance of substitutes Buyer switching costs is low Perceived level of product differentiation Fad and fashion Technology change and product innovation The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker is likely to switch over to a beverage like tea because the products are so similar. If substitutes are similar, then it can be viewed in the same light as a new entrant. Zaras success factorsThe success factors/ competitive advantages include always producing the style that customers are looking for, short production time from design stage and limited quantities. Information system plays strategic indebtedness in the following Collecting Market Data & customers needs Product d evelopment JIT production Considering the information technology investment helping Zara to maintain its competitive advantages, it is strategic liability for the firm. 1 Zaras abstruse for Fast Fashion, Kasra Ferdows, Michael A. Lewis and Jose A. D. Machuca (http//hbswk. hbs. edu/archive/4652. html)