MIS Chapter 3 ZARA: Fast Fashion from a savvy system
3.1
Introduction:
-Zara is the largest pure play fashion retailer -does not believe in advertising -keep huge swaths production in house -went from 2.43b in 2002 to 20 billion in 2012
-fastest global expansion, the fashion industry has ever seen. Opening 1 store a day and now in 88+ countries
-high quality but inexpensive.
Gaps downfall -chose wrong styles colors - took 3 CEOS to straighten out

Contract Manufacturing: a Lower cost at what cost
-outsourcing production to third part firms. Companies who use contract manufacturing don’t own the plants or the employs who produce the goods in the plant. -Leads to: sweatshop labor, bad safety regulations, etc..
-GAP got protested for the Bangladesh accident, even though they were not part of the Rana plaza accident
-tech can be used to prevent this. EX: Nikes in house information system to track audits of its 100’s of suppliers along dimension such as labor and environmental practices.

3.2 Don’t Guess Take Data:
Personal digital assistants - handheld computing devices meant largely for mobile use outside an office setting—to gather customer input, staff regularly chat up customers to gain feedback on what they’d like to see more of. -would you like that skirt longer length? Etc..
Point of Sale System - a transaction processing system that captures customer purchase information—showing how garments rank by sales. Ex: cash registers and check out systems

1. Design: Zara uses direct feedback from the customers (PDAS etc…) then designs from there in the cube. This is a much more effect idea then designing using runway and trying to push on customers.
2. Manufacturing and design: Zara is successful at getting locally targets trends on the shelves as quick as possible. -12 times faster than GAP
-Zara can get new items on the shelves so quickly because (responsive) of Vertical integration and value chain
Vertical integration – when a single firms owns several layers in its value chain
Value chain- the set of activities through which a product or service is created and delivered to customers -moves 17 million items a week, no item staying longer in house than 72 hours. -clothes are pre ironed so Zara employees can spend more times helping customers. -trucks can reach overnight shipment
Logistics- coordinating and enabling the flow of goods, people, information and other resources among the location

3. Stores:
-stores from different location for Zara carry trends in that local region.
-Limited runs, items move quickly. Less amount of discounts to move products.
-Customers visit on average 17 times a year.
-limited production runs allow firms such as Zara to reduce to a minimum the risk of making a mistake, and we do make mistakes with our collections. Failed production introduction are reported to be just 1% at zara to the average of 10%

Technology ≠ Systems
Radio frequency identification (RFID) tags (small chip-based tags that wirelessly emit a unique identifying code for the item that they are attached to) -too expensive of technology could be disastrous. Prada for example.
Information System – an integrated solution that combines 5 components – hardware software data procedures, and people who interact with and are impacted by the system.
- Getting the IS right is key to earning a good return on investment. return on investment (ROI)—the amount earned from an expenditure
Section 3.3 Moving Forward.
Threats:
-weather/ natural disaster/politics. Zara Spain-Centric -financial, euro dollar strengths etc…
Operations – the org activities that are required to produce goods or services. These can involve development, execution, control, maintenance, and improvement organizational services and manufacturing procedures. -other companies following the master Zara techniques, making it harder for them. -economy swings. Tough times equal low sales.
- It is technology that helps Zara identify and manufacture the clothes customers want, get those products to market quickly, and eliminate costs related to advertising, inventory missteps, and markdowns