Zara's MIS: A Case Study on Information Technology and Management

This case study analyzes the management information systems (MIS) employed by Zara, a leading fashion retail chain, highlighting how its success is intertwined with its unique approach to information technology and supply chain management. Zara's vertically integrated supply chain, in-house production, and centralized distribution, coupled with a focus on gathering real-time data on trends and customer preferences through PDA devices used by store employees, enable quick response to market demands and efficient inventory management. The study contrasts Zara's relatively low IT expenditure with its effective utilization of technology combined with human intelligence, leading to advantages such as rapid product turnover, reduced warehousing costs, and enhanced customer responsiveness. The case study concludes that Zara's strategic implementation of MIS allows the company to meet evolving customer needs effectively.

Management Information Systems

MANAGEMENT INFORMATION SYSTEMS 1
Management Information System of Zara
Zara is known as one of the largest, most internationalized and most profitable fashion retail
chains in the world. The success of Zara largely depends upon its business information
system which depends upon vertical integration, quick response, in-house production, low
advertising cost, and centralized distribution center. The same can be summarized as follows:
Zara follows the idea of the vertically combined supply chain which enables the management
to keep a tight control over production phase, design phase and distribution system of its
retail outlets. Zara does not outsource any of its function to other countries as in the case of
other fashion brands (Vaish, 2017).
The main objective of using an information system at ZARA is to find out the best trends and
designs. Designers can estimate about the sold material by collecting all information such as
numbers and location of sellers, quantity purchased by them and type of sales etc. the real-
time information system enables the designers to decide about colors, fabric, and cuts at the
time of adjusting the existing clothes and designs or designing new ones. Use of real-time
information system at ZARA has resulted in decreasing the time form designing the clothes
to the arrival of clothes at the wholesale distribution centers and finally to the retail stores to
in the market.
The use of technology and information by ZARA is very different from its competitors. At
first, it uses less technology as compared to its competitors in terms of workforce and
expenditure. It spends only 0.5% of its net revenue on information technology.Zara has a
unique combination of IT intelligence and humans. A market survey is done by the
employees and managers at stores with the help of human intelligence. Information
technology used in form of PDA devices which are used to send the information collected by
employees and managers carrying PDAs (Scozzese, 2013). An order form is transmitted on
each manager’s PDA for asking the important stock information such as patterns of garment
sales, availability of particular styles etc. The manager of all retail outlets needs to divide the
order form into sections and then these sections are conveyed to the PDAs of all employees to
fill the same on the basis of kinds of sold designs and customers feedback. Further, the
employees are transmitted back to their respective sections after mentioning the requirements
of the customers.

MANAGEMENT INFORMATION SYSTEMS 2
The authority to identify and determine that which sections are required to be retained in the
order form is given to the managers. The final edited form is sent to the headquarters and then
designing teams start manufacturing and working on the basis of quantity and designs
mentioned in the order form. The unique collaboration of technology and human enables the
management to manage the inventory effectively and maintaining an efficient and quick like
between supply and demand (Aabed, 2017).
Advantages of such an innovative system
 A short run of time and vertical incorporation of the supply chain may lead to high
turnover of the product.
 Efficient and immediate distribution enables to eliminate extra warehouse
requirements thus saving the additional and extra storage cost.
 Identifying the latest fashion trend in the market and responding in a fast manner to
meet the customer requirements with the help of PDAs.
 Complete flexibility and autonomy to the managers and employees who remain in
direct contact with the customers.
 POS terminals tend to run on Disk Operating System, which is easy and cheap to
operate and maintain (Anon., 2016).
On the basis of above discussion, it can be concluded that ZARA sues information
technology system in an efficient and effective by investing a minimum amount in it. This
effective use makes the company fulfill continuously new and emerging demands of the
customers.

MANAGEMENT INFORMATION SYSTEMS 3
References
Aabed, A., 2017. Supply chain in the readymade garments industry (Zara case study).
[Online] Available at: http://www.journal.faa-design.com/pdf/7-4-abed.pdf [Accessed 18
October 2018].
Anon., 2016. ZARA | IIMC | MIS. [Online] Available at:
https://www.slideshare.net/induchoodanr/zara-iimc-mis [Accessed 18 October 2018].
Scozzese, G., 2013. From the supply chain management to the demand chain management in
fast fashion: Zara’s winning model. International Journal of Management Sciences and
Business Research, 2(5), pp.43-48.
Vaish, P., 2017. Case Study: Information Systems and Information Technology at Zara.
[Online] Available at: http://adataanalyst.com/information-systems-management/case-study-
information-systems-information-technology-zara/ [Accessed 18 October 2018].
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