External Workshops for Sewing
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Inditex Web site, http://www.inditex.com/en/who_we_are/concepts/zara (accessed February 20, 2012); http://www.marinabaysands. com/shopping/zara.html (accessed May 2, 2015).
Strategic Use of Information Resources
Zara , a global retail and apparel manufacturer based in Arteixo, Spain, needed a dynamic business model to keep up with the ever‐changing demands of its customers and industry. At the heart of its model was a set of business processes and an information system that linked demand to manufactur- ing and manufacturing to distribution. The strategy at Zara stores was simply to have a continuous fl ow of new products that were typically in limited supply. As a result, regular customers visited their stores often—an average of 17 times a year whereas many retail stores averaged only four times a year. When customers saw something they liked, they bought it on the spot because they knew it would probably be gone the next time they visited the store. The result was a very loyal and satisfi ed customer base and a wildly profi table business model.
How did Zara do it? It was possible in part because the company aligned its information system strategy with its business strategy. Its corporate Web site gave some insight:
Zara ’ s approach to design is closely linked to our customers. A non‐stop fl ow of information from stores conveys shoppers ’ desires and demands, inspiring our 200‐person strong creative team. 1
The entire process from factory to shop fl oor is coordinated from Zara ’ s headquarters by using information systems. The point‐of‐sale (POS) system on the shop fl oor records the information from each sale, and the information is transmitted to headquarters at the end of each business day. Using a handheld device, the Zara shop managers also report daily to the designers at headquarters to let them know what has sold and what the customers wanted but couldn ’ t fi nd. The information is used to determine which product lines and colors should be kept and which should be altered or dropped.
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34 Strategic Use of Information Resources
The designers communicate directly with the production staff to plan for the incredible number of designs—more than 30,000—that will be manufactured every year.2
The shop managers have the option to order new designs twice a week using handheld computers. Before order- ing, they can use these devices to check out the new designs. Once an order is received at the manufacturing plant at headquarters, a large computer‐controlled piece of equipment calculates how to position patterns to minimize scrap and cut up to 100 layers of fabric at a time. The cut fabric is then sent from Zara factories to external workshops for sewing. The completed products are sent to distribution centers where miles of automated conveyor belts are used to sort the garments and recombine them into shipments for each store. Zara’s Information Systems (IS) department wrote the applications controlling the conveyors, often in collaboration with vendors of the conveyor equipment.
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