Information Systems and Operations Management

Please show up the article Zara sporting elan from savvy systems available for free at http//www. flatworldk straightawayledge. com/pub/g anyaugher/41128pdf-7 This article makes up Chapter 1 of the free, absolved access book titled, Information Systems A Managers Guide to Harnessing Technology, by John G eitheraugher. Please ensure that you read the entire Chapter 1 of the book consisting of 3 parts (Part 1 Introduction Part 2 put ont Guess, Gather Data and Part 3 Moving Forward). Now answer the questions below oral sex 1 The Zara case shows how education systems plenty impact e really single management discipline.Which management disciplines were mentioned in this case and how does technology impact each? (50% of the total mark) The case study mentioned management disciplines including breeding gathering, processing, storing, distributing and single- prized function of information. Gather market information One of the successful factors in Zara is they know the market tren ds. Zara deploys the latest information technology tools to facilitate the information ex smorgasbord and collect market data by means of both semiformal and informal channels the PDA and POS systems.The Personal Digital Assistants (PDA) system Zaras computer storage managers were given personalized digital assistants (PDAs) so they could gather client input outside an office setting. The provide in Zara would on a regular basis gather information from customers, such as the trend of fashion customers preferred and feedbacks of garment that they would like to think more than in the shop. The range of information collected included colours, length and even small enlarge of the clothes were collected from customers through front line shop staff. at any rate getting information directly from customers, they staff have some other channel to gather customers picks. The staff will investigate the unsold items that customers tried on but didnt buy, to find out their preference s in cloth, color, or styles offered among the products in stock. The Point-of-sale (POS) system Besides the informal channel to gather customers needs (through conversations), the wit office will collect information through a formal channel, the stores point-of-sale (POS) system.This system is a transaction process that captures customer purchase information, in order to show how garments rank by sales. Since the POS system is linked with the PDA system, in less than an hour, managers can send updates that combine the hard data captured at the cash register with insights on what customers would like to see. Information on customer needs and trend information collected daily atomic number 18 fed into a database at head office regularly. The PDAs support the connection between the retail stores and head office.Each store managers atomic number 18 assigned with market specialists, they will communicate regularly through PDAs to transmit all kinds of information to head office. 1 Za ra store management and staff use PDAs and POS systems to gather and analyze customer preference data to plan future designs based on feedback, rather than prediction. Data driven product increase The data collected from PDA as well as POS system formed a precious marketing database and provided data allows the design teams to plan styles and issue re-buy orders based on feedback rather than hunches and guesswork.The goal is to make better the frequency and quality of decisions made by the design and planning teams. The designers from The Cube follow evidence of customer demand. When they deign new garments or decide which kind of stuff, cut and price points to be used or modify existing designs, they will base on information from PDAs and POS rather than create trends by button new lines via advertisements or catwalk fashion shows. Vertically structured value chain Inditex is a vertically integrated group, it owns several layers in its value chain.The distribution center in L a Coruna equipped 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 be low by fashion application standards. The spectacular benefits reaped by Zara from the deployment of technology have resulted from targeting technology investment 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 run through with in-store technology deployment. scrutinise control Zara uses Toyota-designed logistics system and overnight parcel services to manipulate items stocked in the five-million-squargon-foot distribution center in La Coruna, or a similar facility in Zaragoza in the northeast of Spain. About two and a half million items were handled every week and none of them stayed in the wa rehouses more than 3 days. Before sending to each store, clothes are ironed in get a coarse and packed on hangers, with security and price tags fixed forwardshand.This system helps staff in Zara utilize their measure efficiently with the inventory during busy periods. Just-in-time manufacturing (JIT) The JIT approach to manufacturing involves timing the delivery of resources so that they arrive just when needed. Inventory optimization models help the firm 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 can be reached overnight, while chartered lode flights serve farther destinations deep down forty-eight hours. And the firm can coordinate outbound shipment of all Inditex brands with return legs loaded with edged materials and half-finished clothes items from locations out-side of Spain thanks to the revised shippi ng models through Air FranceKLM warhead and Emirates Air. Zaras products are manufactured for a limited exertion run. This approach encourages customers to buy right extraneous and at full price.The constant parade of new, limited-run items also encourages customers to visit often. Staff allocation Headquarter of Zara uses software to execute staffs roster. The manpower is allocated based on each stores forecasted sales tawdriness, with locations staffing up at peak times 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 trading operations throughout the firms value chain has helped reverse a prior trend of cost rising 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 ledge in days instead of months. pic Question 2 Do you think information systems are a strategic liability for Zara? Give reasons. (50% of the total mark) Porters five forces analysis To understand the stock condition of fashion diligence, we need to use Porters five forces model. It is shown how the market behaved at the very beginning of the company according 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 large enough impact to come to a companys margins and volumes, then they hold substantial power. There are many suppliers for raw material There are many substitutes Presence of substitute 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 (competitive) product is simple The product is not extremely important to the buyer they can do without it for a period of time. Customers are price sensitive B uyer do not have teddy be 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 Competitive rivalry within an industry This describes the intensity of competition between existing firms in an industry. Garment industry is utmostly competitive loosely earn low returns.For many industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc. It is a mature industry with very dinky growth. Companies can only 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 increas ed 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 once 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 Threat of new Entrants No distribution barriers to transfix because it only consists on low costs of renting a shop, no administrative restrictions, low sign capital to start Reduced 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 Need time to build up relationship with supply chain and suppliers Threat of substitute products What is the likelihood that someone will switch to a competitive produ ct or service? If the cost of switching is low, then this poses to be a sedate 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 juicer 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 liability in the next Collecting Market Data & customers needs Product development JIT production Considering the information technology investment helping Zara to mainta in its competitive advantages, it is strategic liability for the firm. 1 Zaras Secret for sporting Fashion, Kasra Ferdows, Michael A. Lewis and Jose A. D. Machuca (http//hbswk. hbs. edu/archive/4652. html)