Zara is a successful clothing and accessories retailer, it is the main brand of the INDITEX group (the largest apparel retailer). Its success is mostly based on its fast capacity to respond to the consumer needs after identifying them, which is mainly due to the information systems used by the organization. ZARA is vertically integrated. A narrow span of control allows it to control every step in the life cycle of the product.
Despite its small IT force (0.5% of total revenues), ZARA manages to run perfectly relying on the input of its workforce and the use of information technology to convey information to the distribution centers, factories and headquarter.
ZARA analyses the data to identify the trends, therefore the demand of its customers, then transmits the information to factories to start producing the demanded clothes and accessories. The items are usually available for the public 30 days after the collection of the data. The company then collects feedback from store managers within 4 weeks to decide whether to continue the manufacturing of the product or redesign it into new, more suitable items. Redesigning items and sending them to stores takes roughly 2 weeks.
ZARA’s fast response is due to an efficient use of information systems. The managers use PDA’s to input and send data through modems (each item is given an SKU to facilitate the process) and to order apparel in convenience with the store needs. Teams then analyze the data received from every store to better allocate the apparel available to the better selling stores and the one that need it the most using a system that tracks the theoretical inventory of each item.
The automated distribution centers also contributes to speeding the process. Orders received by the distribution centers are processed by computers, the items are then located by the computers in the warehouses and the orders fulfilled.
ZARA’s efficient use of information systems allowed the brand to become one of the most known and sold brands in the world.