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How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems?

Should the company upgrade the POS terminals to a modern operating system?

Should the company build in-store networks?

Should the company gives employees the ability to look up inventory balances for items in their own stores?

Should the company give employees the ability to look up inventory balances for items in other stores

What is Zara’s “business model”? How is it different from the business model of other large clothing retailers? What weaknesses, if any, do you see within this business model? Is it scalable?

What information does Zara need to operate its business model?

In your opinion, what are the most important aspects of Zara’s approach to information technology? Are these approaches applicable and appropriate anywhere? IF not, where would they NOT work well?

What current or potential weaknesses (if any) do you see in Zara’s IT infrastructure and IT strategy?

Case Study 1 – Zara: IT for Fast Fashion
Spanish retailer Zara’s head of IT was deciding whether or not to upgrade Zara’s IT infrastructure. Zara, a worldwide retailer of hip fashionable
clothes, had over 1500 stores in 45 countries. Although its growth had been tremendous, some employees felt that its IT Operations had not kept
pace with the company’s expansion. Specifically, the company’s use of in-store point of sale systems.
Products
•
A written analysis that addresses the standard case study guidelines, and answers all questions.
Instructions
Preparation
1. Read and analyze Zara: IT for Fast Fashion case study in your Harvard Business Publishing course pack.
2. Review and follow the Case Study Process and Information (see document)
When using the Case Study Process using a heading/bullet point format. Eg.
Most Important Facts of the case
• Fact 1
• Fact 2
• Fact 3
Analysis
1. Answer the questions below, in relation to the case study and any additional research that you complete.
2. Compile your answers and recommendations into a professional, succinct analysis.
3. Submit your case study analysis in Moodle.
Spend the bulk of your analysis on answering the questions.
Questions
1. How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems?
•
Should the company upgrade the POS terminals to a modern operating system?
•
Should the company build in-store networks?
•
Should the company give employees the ability to look up inventory balances for items in their own stores?
•
Should the company give employees the ability to look up inventory balances for items in other stores
2. What is the Zara “business model”? How is it different from the business model of other large clothing retailers? What weaknesses, if any, do
you see within this business model? Is it scalable?
3. What information does Zara need to operate its business model?
4. In your opinion, what are the most important aspects of Zara’s approach to information technology? Are these approaches applicable and
appropriate anywhere? IF not, where would they NOT work well?
5. What current or potential weaknesses (if any) do you see in Zara’s IT infrastructure and IT strategy?
Case Study – Rubric
Criteria
Expected (3)
Sufficient (2)
Weak (1)
Demonstrates an
understanding of Main
Issues/Problems
Identifies and demonstrates a
sophisticated understanding of the main
issues/problems in the case study.
Identifies and demonstrates an
Identifies and demonstrates an
accomplished understanding of most of the accomplished understanding of most of the
issues/problems.
issues/problems.
Analysis and Evaluation of
Issues/Problems
Applies the right financial “tools” and
presents an insightful and thorough
analysis of all identified issues/problems;
includes all necessary calculations.
Presents a thorough analysis of most of the
issues identified; missing some necessary
calculations.
Presents a superficial or incomplete
analysis of some of the identified issues;
omits necessary calculations.
Recommendations on
Effective
Solutions/Strategies
Supports diagnosis and opinions with
strong arguments and well documented
evidence; presents a balanced and critical
view; interpretation is both reasonable and
objective.
Supports diagnosis and opinions with
limited reasoning and evidence; presents a
somewhat one-sided argument;
demonstrates little engagement with ideas
presented.
Little or no action suggested and/or
inappropriate solutions proposed to the
issues in the case study.
Links to Course Readings
and Additional Research
Makes appropriate and powerful
connections between identified issues/
problems and the strategic concepts
studied in the course readings and lectures;
supplements case study with relevant and
thoughtful research and documents all
sources of information.
Makes appropriate but somewhat vague
connections between identified
issues/problems and concepts studied in
readings and lectures; demonstrates
limited command of the analytical tools
studied; supplements case study with
limited research.
Makes inappropriate or little connection
between issues identified and the concepts
studied in the readings; supplements case
study, if at all, with incomplete research
and documentation.
Presentation of case
analysis/assignments
Demonstrates clarity, conciseness and
correctness; formatting is appropriate and
writing is free of grammar and spelling
errors.
Occasional grammar or spelling errors, but
still a clear presentation of ideas; lacks
organization.
Writing is unfocused, rambling, or contains
serious errors; poorly organized and does
not follow specified guidelines.
Complete Case Analysis
Answers all case study questions and any
other questions presented in specific case
study and supports all answers with
multiple thoughtful details
Answers all case study questions and any
other questions presented in specific case
study, and provides support but lacks full
detail to support answers
Does no answer all questions and/or does
not provide any support for questions
answered.
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REV: SEPTEMBER 6, 2007
ANDREW MCAFEE
VINCENT DESSAIN
ANDERS SJÖMAN
Zara: IT for Fast Fashion
On a beautiful August night in 2003, Xan Salgado Badás and Bruno Sánchez Ocampo settled into
seats at their favorite tapas bar in the Spanish city of La Coruña, ordered pulpo gallego (octopus
Galician style), and resumed their argument.
Salgado was the head of IT for Inditex, a multinational clothing retailer and manufacturer
headquartered in La Coruña (see Exhibit 1 for a map). He was Sánchez’s boss, although the two men
had worked together for so long that their formal reporting relationship mattered little. It certainly
did not keep Sánchez from disagreeing with every point Salgado made this evening as they discussed
the point-of-sale (POS) terminals used by Zara, Inditex’s largest chain of stores. Sánchez was the
technical lead for the POS system, so the matter was close to his heart.
“It’s time to upgrade them,” said Salgado.
“No, it’s not.”
“Yes, it is. It’s risky to let them get so far behind current technology.”
“No, it’s riskier to upgrade them just to ‘stay current.’ The software works fine now; we shouldn’t
touch it.”
“But it runs on DOS, which you know Microsoft doesn’t even support anymore.” 1
“And you know DOS hasn’t been supported for years now, and that hasn’t stopped us or hurt us,”
Sánchez replied. “We have the right to keep using the operating system—where’s the problem?”
“One problem is that the hardware vendor for our POS terminals could upgrade their machines,
or some peripheral for them, so that they’re not DOS-compatible anymore. Then where would we
be? We’d be explaining why Zara can’t open any new stores because we don’t have POS software
that works with our POS hardware. Do you want that job?”
1 All computers have an operating system (OS), which is a specialized program that “sits between” the hardware (i.e., the
screen, keyboard, disk drive, processor, etc.) and the software (also called “applications” or “programs”) that users want to run
on the computer. Microsoft’s MS-DOS (Microsoft Disk Operating System), or DOS, was a widely installed operating system in
early personal computers. In 1985, Microsoft launched the Windows OS to replace DOS.
________________________________________________________________________________________________________________
Professor Andrew McAfee, Executive Director of the HBS Europe Research Center Vincent Dessain, and Research Associate Anders Sjöman
prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of
primary data, or illustrations of effective or ineffective management.
Copyright © 2004, 2006, 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may
be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.
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ZARA: IT for Fast Fashion
“Of course not. So let’s buy a bunch of the current terminals so if that happens we’ll have plenty
of breathing room while we port the POS application to a new OS.2 But I don’t even think we need to
do that. The terminal vendor has assured us they’re not going to make any drastic changes, and
we’re a big customer.
“And let me remind you why we shouldn’t tamper with POS unless we absolutely have to,”
Sanchez continued. “Everything about it works! Sales get recorded in stores around the world and
transmitted to us here every day like clockwork. I wrote most of the POS application, and I’m the
one a store manager calls when there’s a problem they can’t fix. Do you know how many of those
calls I got last week?”
“I know that the application is stable, but that doesn’t . . .”
Sánchez didn’t let him finish: “None! That’s how many! Let me ask you another question—do
you know how many stores we opened last week?”
“No, but what’s that got to . . .”
“Exactly! That’s because opening a store requires no IT involvement! You don’t have to send
someone to Dubai, or Argentina, or Russia, or wherever. The store manager just unpacks the POS
terminals, inserts a couple disks in each, plugs a modem into a phone line, and starts selling clothes.
Why on Earth would you want to mess with that?”
“Because I’m worried about DOS,” Salgado said. “And because I think it might be time to
upgrade the POS application itself. We could add functionality, we could add networking capability,
we could . . .”
“We could mess it up in the process. We could turn it from an application that we never have to
worry about into a real headache, for us and the stores.”
“But the store managers are asking for POS to include more . . .”
“Store managers are always asking for something more from us. But which do you think they’d
rather have: a basic POS application that always works, or a fancy buggy one?”
“Of course they’d rather have a stable application,” Salgado replied, “but we’ve been hearing
more and more lately that they want to be able to look up inventory balances in their stores, other
stores . . .”
“Great. So instead of selling clothes they’ll be counting them all the time, trying to make sure their
online inventory figures are 100% accurate. Bad idea.
“POS is not broken,” Sánchez finished definitively. “Why are we trying to fix it?”
Instead of replying, Salgado sat back and thought. He was quite familiar with Sánchez’s
arguments, because Salgado himself had made them many times. The two of them, in fact, often
switched sides in this debate; it was how they made sure that they raised all the relevant issues and
examined the whole argument, instead of getting entrenched in one point of view. This thorough
approach, however, had only deepened Salgado’s confusion over what to do about POS. He
wondered what approach would be most in keeping with how Zara developed and exploited its
overall computing infrastructure.
2 “Porting” is the work of rewriting an existing piece of software so that it is compatible with another operating system.
2
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Zara Business Model
The original business idea was very simple. Link customer demand to manufacturing, and link
manufacturing to distribution. That is the idea we still live by.
— José María Castellano Ríos, Inditex CEO
Zara was founded by Amancio Ortega, who in 2003 was still its largest shareholder and the richest
man in Spain.3 Ortega had started in 1963 with clothing factories. Over time, he came to believe that
retailing and manufacturing needed to be closely linked in the apparel industry, where consumer
demand was notoriously hard to forecast. So he integrated forward, opening the first Zara store in La
Coruña in 1975.
Two important events occurred in 1985. First, Inditex (Industria de Diseño Textil) was formed as
a holding company atop Zara, other retail chains (see Exhibit 2 for a list of them as of 2003), and a
network of internally owned suppliers. Second, José María Castellano Ríos joined the company.
Castellano had worked as an IT manager and shared Ortega’s belief that computers were critically
important in enabling the kind of business that they wanted to build. Castellano became Inditex’s
CEO in 1997.
Speed and Decision Making
In addition to their affinity for information technology, Ortega and Castellano shared two other
beliefs about the company. First, Zara needed to be able to respond very quickly to the demands of
target customers, who were young, fashion-conscious city dwellers. Their tastes in clothing changed
rapidly, were very hard to predict, and were also hard to influence. Other companies in the apparel
industry had shown that marketing and advertising campaigns could be effective at convincing a
consumer to buy their clothes. History had also demonstrated, however, that “fashion misses” were
common even with extensive advertising and that new styles could appear suddenly (based, for
example, on what a rock star wore during a televised awards show), surge in popularity, then quickly
fade. Zara wanted to be able to produce and deliver such styles while they were still hot, rather than
relying on the persuasiveness of its marketing to push clothes it had made some time ago.
Second, Ortega, Castellano, and the other senior managers wanted to take advantage of the
intelligence and trust the judgment of employees throughout the company, instead of relying on a
small set of decision makers. Store managers at Zara, for example, were given much more
responsibility than those at other large clothing chains. In addition to dealing with customers,
employees, contractors, and landlords, Zara store managers decided what garments would be on sale
at their stores. They placed orders for the items they thought would sell, rather than simply
accepting and displaying what headquarters decided to send them.
Similarly, a group of people at La Coruña called “commercials” had great discretion in deciding
what clothes would be designed and produced. In sharp contrast with those of other chains, Zara’s
collections were not conceptualized and designed by a small, elite team. Instead, collections were
created, then extended and modified over time, by teams of commercials, each dedicated to a section
of the store (Men, Women, or Children) and, within that, to a specific collection (“Basic” and
“Sports,” for example, were both collections within Women). Teams usually consisted of two
designers and two product managers, who purchased material, placed production orders with the
factories, and set prices.
3 This section draws on Pankaj Ghemawat and José Luis Nueno, “Zara: Fast Fashion,” HBS Case No. 703-497 (Boston: Harvard
Business School Publishing, 2003).
3
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ZARA: IT for Fast Fashion
Another group of commercials, called store product managers, sat in close proximity to the
product teams and served as La Coruña’s main interface with Zara stores around the world. They
traveled extensively, observing what residents were wearing and talking at length with store
managers to find out what kinds of clothes were selling. Even more importantly, they also tried to
learn what kinds of clothes would sell if Zara made them. Store product managers communicated
what they had seen and heard to the design teams, helping them keep abreast of fast-changing trends
and demands (for a layout of the office in La Coruña where design teams and store product
managers sat, see Exhibit 3). Store product managers could initiate store-to-store transfers when they
saw that garments selling slowly in one area were popular in another.
Other employees within the commercial function also exercised a great deal of autonomy. They
decided, for example, which clothes each store would be able to order. When total orders from stores
exceeded availability for an item in any period, commercials decided which stores would get clothes
and which would not. Commercials’ decisions were not typically reviewed by higher-level
managers. Zara believed that such second-guessing would compromise both the company’s speed
and its emphasis on decentralized decision making.
Marketing, Merchandising, and Advertising
Unlike its main competitors, which were other multinational clothing retailers such as H&M, Gap,
and Benetton, Zara did virtually no advertising. The company placed ads only to promote its twiceyearly sales4 and to announce the opening of a new store. As a result, Zara’s marketing expenditures
averaged 0.3% of revenue, instead of the 3%–4% typical for competitors. (For a financial comparison
of Inditex and its three main competitors, see Exhibit 4.)
While it spent little on ads, Zara spent relatively heavily on its stores. They were always located
in a city’s prime retail district, often on the best-known street. And while Zara’s store managers had
a great deal of freedom in deciding what clothes to stock, they had no discretion about the look and
feel of their stores. Store layouts were completely changed every four to five years, with artwork,
window displays, and sales racks changed more frequently. A 1,500-square-meter pilot store was
kept in La Coruña, where all new store layouts were designed and tested before being rolled out
around the world. After a redesign, a La Coruña-based team traveled to each Zara store to set up the
new configuration.
Individual stores also did not have the freedom to set garment prices; these were determined by
product managers. Prices were established for the Spanish market, denominated in euros (€), and
noted on the tag affixed to the garment in La Coruña. Prices for other countries were set at a fixed
percentage of this baseline, taking into account distribution costs and market conditions.
Zara did not try to produce “classics”—clothes that would always be in style. In fact, the
company intended its clothes to have fairly short life spans, both within stores and in customers’
closets. Three implications followed from this approach. First, experienced Zara shoppers knew that
if they saw a garment they liked they should buy it on the spot, because it might not be there on their
next visit (about 75% of the merchandise in the average store was changed over three to four weeks).
Second, shoppers also knew that they should visit the store often, since new styles showed up all the
time. Finally, Zara garments were not designed and manufactured to be highly durable; they were
described as “clothes to be worn 10 times.”
4 All large clothing retailers held these sales to get rid of merchandise in advance of a new collection’s debut. Because of its
proficiency at matching supply to demand, Zara typically sold 15%–20% of its clothes during these sales at an average discount
of 15%. European competitors sold 30%–40% of their clothes this way, at an average discount of 30%.
4
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Zara had decided not to sell clothes over the Internet, for two main reasons. First, the company’s
distribution centers (DCs) were not configured for picking small orders and shipping them to
consumers. Second, it would be complicated to handle returns of merchandise bought online. Zara
managers understood that the retail mail-order industry saw return rates as high as 50%–60%, which
they compared unfavorably with their normal 5% store returns. A Web site—www.zara.com—
existed but served only as a digital display window, showing a few typical garments at any time.
Financials and Growth
At the beginning of 2003, Inditex operated 1,558 stores in 45 countries, of which nearly 550 were
part of the Zara chain. The group opened on average one store per day across the world. Forty-six
percent of the group’s sales were inside Spain, with France the largest international market. Zara
generated 73.3% of the group’s sales. Of the three departments inside Zara, Women accounted for
60% of sales, with the rest evenly split between Men and the fast-growing Children segment. For its
fiscal-year 2002, Inditex had posted a net income of €438 million (about $502 million U.S. dollars) on
revenues of €3,974 million (about $4,554 million), continuing a trend of rapid and profitable growth;
the company’s earnings, for example, had more than tripled between 1996 and 2000 (Exhibit 5
provides the group’s financial information, Exhibit shows its geographic expansion, and Exhibit 7
shows growth over time).
Inditex executives felt that ample room for growth existed within its current markets. Italy, for
example, had very few Zara stores, despite the fact that shoppers there were some of the most fashion
conscious in Europe. Zara’s Italian stores were extremely popular, giving Castellano confidence that
the country could one day have a store density similar to that of Spain. And Inditex’s western
European expansion could, he felt, be largely supported with its current infrastructure. This implied
that it would not be necessary to build entirely new production and distribution networks in order to
support future growth.
Operations
To reach its goal of quickly and accurately responding to shifting consumer demands, Zara
established three cyclical processes—ordering, fulfillment, and design and manufacturing. Of these,
ordering (of garments by the stores) was the most regular, precisely defined, and standardized
around the world.
Ordering
Every major section of a Zara store—Men, Women, and Children—placed an order to La Coruña
twice a week. The order encompassed both replenishment of existing items and initial requests for
newly available garments. Stores faced “hard” deadlines for submitting these orders; if they missed
the deadline, La Coruña calculated a replenishment-only order for them, based on what they had
sold since the previous order.
Store managers determined replenishment quantities by walking around the store and
determining what had been selling by counting garments and talking to salespeople. Store personnel
could not look up their inventory balances on any in-store computer, so canvassing the store was the
only way to learn about stock levels.
Managers learned about newly available garments by consulting a handheld computer that was
linked each night, via dial-up modem, to information systems at La Coruña. (See Exhibit 8 for a
5
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ZARA: IT for Fast Fashion
picture of a handheld.) Less than 24 hours before each order deadline a digital order form, called
“the offer,” was transmitted to all stores’ handhelds. The offer included descriptions and pictures of
the newly available items, as well as all replenishment items that were still available to that store.
Each store’s offer was different; offers were developed by a team of commercials and were based on
garment availability, regional sales patterns, predictions about what would sell well in each location,
and other factors. (See Exhibit 9 for a portion of an offer.)
To facilitate ordering, the store manager usually divided the offer into segments and “beamed”
each segment to a different handheld using infrared technology. Several people then used these
handhelds to fill in their segment of the offer as they walked through the store, then beamed their
segments back to the store manager. After reviewing them, the manager would send the completed
form, now called “the order,” back to La Coruña.
Fulfillment
Fulfillment, or shipping clothes to stores to satisfy their orders, involved another group of
commercials at La Coruña. Their job was to match up the supply of finished clothes coming from
factories into the DC with the stores’ demands for these items. They worked with two pools of
information: the aggregated orders from all stores, which was finalized soon after the order deadline
had passed, and the total supply of inventory in the DC at the same point in time. Both of these were
at the level of the stock-keeping unit (SKU), which was defined as the combination of garment plus
fabric plus color plus size.
When supply and demand lined up closely for a particular SKU, no decisions were required; the
commercial simply allowed the inventory to be divided up, by computer, among all the stores that
wanted it. If, however, demand for an SKU was greater than supply in any ordering period, the
commercial had to determine which stores would get the available inventory and which would not.
He or she did this by looking at which stores had been most successful at selling the item and which
ones, if any, had been shortchanged on these decisions in the recent past.
These commercials also worked with product managers to determine future production for each
SKU. If there were more demand than supply, of course, production would be increased as quickly
as possible. When supply started to exceed demand, the commercial would decrease replenishment
requests and eventually stop placing new factory orders altogether.
Finally, commercials could also ship items that stores did not order. These were typically new
garments for which Zara wanted to assess demand. They would be sent to stores in targeted
geographies; store managers knew to expect such deliveries periodically, and to offer the clothes for
sale rather than asking where they came from. Store managers also knew to expect that some items
that they had ordered might not arrive because total demand had exceeded supply and commercials
had decided to allocate available SKUs elsewhere.
Deliveries typically showed up at stores one or two days after each order was placed. Stores in
western Europe were replenished by truck from the two Spanish DCs. Latin American stores were
replenished from smaller local DCs.5 More remote stores, such as those in northern Europe and the
Middle East, were replenished by air from the Spanish DCs. Garments did not stay long in a DC; the
goal was to produce, then deliver, only what the stores needed, and only when they needed it. In
fact, there was little inventory anywhere in Zara’s supply chain. Clothes flowed quickly, and without
stopping, from factories to DCs to stores, where they were immediately put on the sales floor; Zara
stores had no “back room” where excess inventory could be kept.
5 Latin American DCs were supplied via bulk shipments from Spanish DCs.
6
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Each section of all Zara stores ordered twice a week, but different sections received shipments on
different days. As a result, the DC in La Coruña was active throughout the week but most active on
the days when Women’s orders were shipped to stores, since the Women’s Department accounted for
the greatest share of sales, orders, and SKUs.
Design and Manufacturing
Like other large clothing retailers, Zara introduced substantially new design collections at the start
of the fall/winter and spring/summer buying periods. In sharp contrast to the competition,
however, Zara also brought out new items continuously throughout the year, including both changes
to existing garments (for example, a shirt with a new collar or color) and entirely new creations. In a
typical year, Zara introduced approximately 11,000 new items; competitors averaged 2,000–4,000.
Zara’s vertically integrated manufacturing operations enabled this constant introduction of new
items and also ensured short lead times. Production requirements were distributed across a network
of specialized facilities that quickly produced and delivered the required goods. Zara owned a group
of factories in and around La Coruña to do the capital-intensive initial production steps of dyeing
and cutting cloth.6 Cut fabric was sewn into garments at a network of small local workshops in
Galicia and northern Portugal that guaranteed quick turnaround times.7 All finished garments were
sent to a Zara facility, where they were ironed, inspected, given a machine-readable tag, and sent to a
DC.
Using this network, Zara could consistently move a new design from conception through
production and into the DC in as little as three weeks.8 Two days after that, the garment could be on
sales racks in stores around the world. This speed enabled Zara to respond to the fast-changing and
unpredictable tastes of its target customers. As far as Inditex managers were aware, no other large
apparel retailer could match this capability.
A consequence of Zara’s approach to design, fulfillment, and manufacturing was that the
company did not have to rely on accurate long-range sales forecasts. Instead, commercials within
design teams simply made an initial guess about how well a garment would sell, then communicated
this guess to factories in the form of a first-production requirement. It was not critical that this guess
be accurate. Stores’ orders told commercials how well the garment was selling and thus whether
future production should be increased or decreased. And flexible factories with short lead times
could adjust to such changes easily and rapidly. Zara did not have to predict what would be selling
six months, or even one month, in the future; it could continuously sense what customers wanted to
buy and respond “on the fly.”
Information Technology
Approaches and Organization
Zara’s approach to information technology was consistent with its preferences for speed and
decentralized decision making. The company had no chief information officer and no formal
6 Zara bought a large amount of undyed fabric on the external market and also owned some textile fabrication facilities.
7 These workshops were not owned by Inditex.
8 Zara outsourced production of some items with comparatively stable and predictable demand patterns like men’s dress
shirts. Lead time for items produced in China was approximately four months; for items produced in Turkey, lead time was
two months.
7
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processes for setting an IT budget9 or deciding on specific technology investments or projects.
Instead, Salgado and Castellano sat on a technology steering committee and so got involved early in
discussions of initiatives that might include computerization (for a formal organization chart of
Inditex, see Exhibit 10). As these discussions progressed, Salgado and his colleagues would
determine what new systems, if any, were required and which IS department personnel should work
on them. There was little or no formal justification for IT efforts, nor were cost/benefit analyses
typically conducted for a proposed effort.
Salgado and his colleagues shared a preference for writing the applications they needed
themselves rather than buying commercially available software. They felt that the company’s
operations were unique enough that commercial packages would not be suitable. The fact that Zara
did business in so many countries and currencies, for example, meant that standard accounting
packages would have to be heavily modified and extended. Rather than attempting this, the IS
department wrote its own accounting software. Similarly, the applications that supported ordering,
fulfillment, and manufacturing were largely developed internally.10
Application development and other IT activities were the responsibility of an IS department of
approximately 50 people, almost all hailing from Galicia and recruited from local universities.11 They
were divided into three groups: Store Solutions, Logistics Support, and Administrative Systems.
With very few exceptions, all IT support of Inditex stores around the world was done directly from
La Coruña. Staff retention was not seen as a problem; in the last 10 years, only one person had left
the department.
La Coruña
At La Coruña, several information systems were used to support Zara’s operations. Internally
developed applications were used to prepare the offer and distribute it over the Internet to stores
around the world and also to receive orders from all of the stores and aggregate them. Another
application compared the aggregated order to available inventory for each SKU, highlighted
situations where supply and demand were imbalanced, and executed commercials’ decisions about
how to allocate products when demand exceeded supply.
Yet another application kept track of the “theoretical inventory” of each SKU at each store.
Shipments to stores increased this inventory, and sales decreased it. At the end of each business day,
each store transmitted that day’s sales for all SKUs back to La Coruña, using a modem connected to
one of the store’s POS terminals (see Exhibit 11 for a photo of a Zara POS terminal). Of course, if
shipments and sales were not recorded perfectly, stores’ theoretical inventory would become
inaccurate; theft, damage, and other losses would also make theoretical inventory a poor reflection of
reality.
The company had not historically been greatly concerned that theoretical inventory be 100%
accurate for each store and SKU at all times. Theoretical inventory was used to help make allocation
9 Castellano estimated Inditex’s 2002 IT spending to be €25 million, or approximately 0.5% of revenue. A 2001 survey of large
North American retailers found their IT spending to average approximately 2% of annual revenue (Gartner, Inc., 2001 IT
Spending and Staffing Survey Results).
10 Zara did use standard commercial applications for office productivity (word processing, e–mail, etc.) and computer-aided
clothing design.
11 IT employees accounted for less than 0.5% of Inditex’s total workforce. Large North American retailers, in contrast, devoted
approximately 2.5% of employees to IT on average (Gartner, Inc., 2001 IT Spending and Staffing Survey Results).
8
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decisions and for little else.12 Salgado maintained that “Having 100% control is most of the time just
too expensive. Being 95% right is pretty good, and often you don’t need more accuracy.”
Factories
Inside Zara’s factories, relatively simple applications were used to plan production. These
applications did not use sophisticated mathematics to generate “optimal” plans and schedules.
Instead, they presented factory managers with quantities and due dates for all production requests.
Managers used this information to load their factories and put jobs in sequence.
The most sophisticated technologies inside Zara factories were usually the large computercontrolled equipment that cut cloth into patterns.13 These machines calculated how to position
patterns so as to minimize scrap and could cut over 100 layers of fabric at a time. Cut fabric was then
sent from Zara factories to external workshops for sewing.
Distribution Centers (DCs)
Zara’s DCs relied on a great deal of automation and computerization. At the La Coruña DC, for
example, miles of automated conveyor belts facilitated the ongoing task of receiving bulk quantities
of each garment from factories then recombining these garments into shipments for each store. (See
Exhibit 12 for a picture of these conveyor belts.) Information systems tracked where each SKU was
stored as it entered the DC, then controlled the conveyor belts to pick them up and drop them off at
the appropriate places. Humans helped with this work, particularly by taking garments off the belts
at the end of their journey through the DC, then putting them on hanger racks or in cardboard boxes
that would be sent to each store. Zara’s IT department wrote the applications that controlled the
DC’s automation, often in collaboration with the vendors of conveyor equipment.
Stores
All Zara stores had identical handhelds—also known as personal digital assistants (PDAs)—and
POS systems. PDAs had been introduced in 1995. At that time, many within the company felt that it
was taking too long and costing too much to fax order forms back and forth to all stores around the
world twice a week. Because of the number of SKUs involved these forms could be well over 15
meters long, so it was time consuming to send and receive them. Unreliable fax machines, paper
shortages, and other similar problems also introduced delays and frustration into the critical ordering
process. Salgado and his colleagues decided to address the situation with IT and began
experimenting with handheld computers that would communicate with La Coruña via modem. They
first used Apple’s Newton device and became one of the largest users of this then-new technology.
After the Newton was discontinued in 1998, Zara switched to another PDA manufacturer.
In 2003, PDAs were used primarily for ordering and also for tasks such as handling garment
returns to DCs and transmitting information from headquarters to all stores. Each store had several
PDAs, allowing redundancy and division of labor during the ordering process. Zara constantly
upgraded stores’ PDAs as devices were discontinued or as technological advances such as color
screens became available.
12 All Zara stores periodically conducted physical audits of their inventory. During an audit SKUs were divided into
categories based on price, then the number of garments in each category were counted. If the total value of the inventory in
the store was close enough to the total value of theoretical inventory, the store passed the audit.
13 These were commercially available machines, and Zara did not greatly modify them.
9
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ZARA: IT for Fast Fashion
The POS terminals in use within every store, in contrast, had remained essentially unchanged for
well over a decade. They still used the DOS operating system, which in 2003 was no longer
supported by Microsoft. Zara continued to use DOS, and the internally developed POS application
that ran on top of it, because this combination had proved to be remarkably stable, effective, and easy
to roll out and maintain over time. Store employees, for example, could turn POS terminals on and
off at any time without worrying about following start-up or shutdown procedures. They could also
set up and maintain the complete POS infrastructure themselves. When opening a new store, the
manager simply inserted two floppy drives into each “blank” POS terminal; the floppies contained
DOS and all required applications. In the event of a serious problem with a POS terminal, a complete
software reinstallation was similarly straightforward. As a result, no IT support was required to
open a new store, nor was it necessary to run a large IT support organization to assist the stores.
Neither the POS terminals nor the PDAs were always connected to Zara’s headquarters or to other
stores. One POS terminal at each store had a modem, which was used at the end of each business
day to transmit comprehensive sales information and other data to La Coruña. POS terminals were
not connected to one another via any in-store network, so employees copied daily sales totals from
each terminal onto a floppy disk, then carried these disks to the one modem-equipped terminal to
accomplish the transition. PDAs also used this terminal’s modem to receive the offer and transmit
the order. Stores did not have any computers beyond the POS terminals and PDAs. Within a store,
POS terminals and PDAs could not share information.
The POS terminals and PDAs did not contain information that could be used when one store
wanted to know if a nearby one had a particular SKU in stock. Store personnel telephoned one
another to answer this question.
Conclusion
Salgado and Sánchez both worried about “getting fancy” with store IT. Would upgrading to a
modern operating system, enhancing the POS application itself, and/or building networks within
and between stores put at risk the robust and scalable infrastructure they had built? They also
worried, however, that Zara was building a bigger and bigger company on top of a more and more
obsolete operating system. What if the hardware vendor for POS terminals changed the machines in
such a way that they could no longer use DOS? This vendor had already made it clear that Zara was
its only customer using the ancient operating system. The vendor also said that it had no plans to
change its machines so that they could no longer run DOS, but Salgado had gotten nowhere when he
had tried to include such assurances in Zara’s contract with the terminal maker.
Did all of this mean that it was now time to port the POS application to another OS such as
Windows, UNIX, or Linux? And as insurance against unpleasant surprises, did it make sense to
purchase enough of the current POS terminals now, so that Zara’s needs would be covered in the
event of a sudden loss of support from the vendor?
If they were going to port the POS application to a new operating system, should they also use it
as an occasion to build new capabilities into the software? One of the few complaints store managers
had about the PDAs was that it was time consuming to use their small screens and styluses to
accomplish returns. An updated POS application could easily incorporate this functionality,
allowing store personnel to use a large screen, keyboard, and mouse to quickly execute returns
transactions.
And why stop there? Modern POS terminals, since they were really modern PCs, could
accommodate even more sophisticated capabilities, especially networks within stores and across the
10
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ZARA: IT for Fast Fashion
604-081
company. Wireless networks were particularly intriguing since they were much cheaper to install
within a store. With a wireless network in place, it would no longer be necessary to carry floppy
disks around the store at the end of each business day to tally up total sales. And if all stores and La
Coruña were permanently connected to the Internet, every location could know the theoretical
inventory of all of its SKUs, as well as the theoretical inventory in all other stores. In this scenario,
stores could request inventory transfers from one another online, eliminating the need for phone calls
to see if an item were in stock. (See Exhibit 13 for some industry-based assumptions on development
costs.)
Salgado and Sánchez saw that a move to change the operating system of Zara’s POS terminals
entailed a number of follow-on decisions. Was now the right time to make them, or should the
company simply continue to use the IT infrastructure that had worked so well for so long? Even the
arrival of the delicious pulpo did not take their minds entirely off the issue, but it did temporarily stop
them from arguing about it.
11
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Exhibit 1
ZARA: IT for Fast Fashion
Map of Spain, with La Coruña Indicated
La Coruña
Source: University of Texas, http://www.lib.utexas.edu/maps/europe/spain_sm97.gif, accessed January 20, 2004.
12
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ZARA: IT for Fast Fashion
Exhibit 2
604-081
Inditex Retail Chains (end of 2003)
Zara
Massimo Dutti
• Founded in 1975
• Continuous design based on
customer desires, for women,
men, and children.
Pull and Bear
• Founded in 1991
• Offering casual clothing at
affordable prices
• Acquired in 1995
• Higher fashion for men and women
Bershka
• Founded in 1998
• Trendy clothing for a younger
market
Stradivarius
• Acquired in 1999
• Youthful urban fashion
Source:
Inditex (formatted by casewriters).
Note:
The retailing chains were organized as separate business units.
Oysho
• Founded in 2001
• Lingerie
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ZARA: IT for Fast Fashion
Exhibit 3
Physical Organization of a Zara Design Department
The department for Zara Women sat in one open landscape. Design and production teams
consisted normally of two designers and two product managers responsible for a specific collection,
such as knitwear for Zara Women. They interacted with the store product managers, who were in
almost daily contact with stores in their geographical region, for instance France.
The other Zara departments—Men and Children—were organized in a similar way.
Design and Production Teams
(with product responsibility)
Design and Production Teams
(with product responsibility)
!!
!!
!
! !!
! !!
!
!!
!!
Source:
!!
!!
Store Product Managers
(with geographic
responsibility)
!
! !!
! !!
!
!!
!!
Casewriters research.
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ZARA: IT for Fast Fashion
Exhibit 4
604-081
Inditex and Key Competitors (financials in €)a
2002
Operating Results (€mn)
Net Operating Revenues
– Cost of Goods Sold
Gross Margin
– Operating Expenses
Operating Profits
– Nonoperating Expenses
Pretax Income
– Income Tax
– Minority Interests
Net Income
Net Margin
2001
Inditex
Gapb
H&M
Benettonc
3,974
1,955
2,019
1,180
839
224
615
173
4
438
11.02%
13,819 4,972
9,122 2,230
4,697 2,742
3,729 1,840
968
902
202
-40
766
943
309
321
0
0
456
621
3.30% 12.49%
1,992
1,124
867
625
243
194
49
57
2
-10
-0.49%
Inditex
Gapb
H&M
Benettonc
3,250 15,559
1,563 10,904
1,687
4,655
982
4,276
705
379
209
108
496
271
150
280
5
0
341
-9
10.49% -0.06%
4,269
2,064
2,205
1,615
590
-28
618
206
0
412
9.65%
2,098
1,189
909
624
285
43
242
92
2
148
7.05%
Financial Position (€mn)
Current Assets
Property, Plant, and Equipment
Other Noncurrent Assets
Total Assets
1,146
1,413
455
3,014
5,487
3,611
368
9,467
2,038
668
477
3,184
1,637
706
301
2,643
854
1,228
523
2,605
3,436
4,695
435
8,566
1,468
661
54
2,183
1,558
720
543
2,821
Current Liabilities
Noncurrent Liabilities
Total Liabilities
Shareholders’ Equity (book value)
Liabilities and Shareholders’ Equity
1,013
240
1,253
1,761
3,014
2,607
3,363
5,969
3,497
9,467
578
90
667
2,085
2,752
546
957
1,503
1,141
2,643
834
285
1,119
1,486
2,605
2,320
2,850
5,170
3,396
8,566
432
101
533
1,650
2,183
956
624
1,580
1,241
2,821
Market Capitalization
Equity—Market Valued
1-Year Change in Market Value (%)
13,981
0
12,320 16,496
0
0
1,144
-1
13,433 12,687 15,564
0
-1
0
2,605
0
Other Statistics
Employees
Number of Countries of Operation
Sales in Home Country (%)
Sales in Home Continent (%)
Number of Store Locationse
Stores in Home Country (%)
Stores in Home Continent (%)
Average Stores Size (square meter)
32,535 169,000 25,674
45
6
14
46%
NA
11%
75%
NA
96%
1,558
3,117
884
59%
88%
14%
85%
91%
95%
NA
NA
NA
7,824
120
31%
69%
5,371
NA
NA
NA
26,724 165,000 22,944
39
6
14
46%
87%
12%
77%
NA
96%
1,284
3,097
771
60%
88%
15%
86%
92%
96%
514
632
1,201
7,666
120
44%
78%
5,456
40%
80%
279
Source: Compiled and calculated by casewriters.
– 2002 numbers: Operating results and financial position from companies’ annual reports. Market cap/equity data
from analyst reports. Other statistics from company Web sites, annual reports, or analyst reports.
– 2001 numbers: As for 2002 numbers and based on Pankaj Ghemawat and José Luis Nueno, “Zara: Fast Fashion,”
HBS Case No. 703-497 (Boston: Harvard Business School Publishing, 2003).
aConverted to euros for Gap (original financials in USD) and H&M (from Swedish kronor, SEK).
bGap includes retail chains Gap, Banana Republic, and Old Navy.
cBenetton includes main brands United Colours of Benetton, Sisley, Nordica, and Prince.
dEquity market value for 2002 as of February 18, 2003, and for 2001 as of May 22, 2002.
eIncludes franchise stores.
15
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ZARA: IT for Fast Fashion
Exhibit 5
Inditex Historical Financials (millions of Euro)
Year
Net Operating Revenues
Cost of Goods Sold
Gross Margin
Operating Expenses
Operating Profits
Non-Operating Expenses
Pre-Tax Income
Income Tax
Minority Interest
Net Income
Net Margin
2002
3,974.0
1,954.9
2,019.1
1,179.8
839.3
224.3
615.0
172.5
4.4
438.1
11.02%
2001
3,249.8
1,563.1
1,686.7
982.3
704.4
209.3
495.1
149.9
4.8
340.4
10.47%
2000
2,614.7
1,277.0
1,337.7
816.2
521.5
152.7
368.8
106.9
2.7
259.2
9.91%
1999
2,035.1
988.4
1,046.7
636.2
410.5
118.1
292.4
86.2
1.5
204.7
10.06%
1998
1,614.7
799.9
814.8
489.2
325.6
96.7
228.9
76.1
-0.2
153.0
9.48%
Inventories
Accounts Receivable
Cash and Cash Equivalents
Total Current Assets
Property, Plant, Equipment
Other Non Current Assets
Total Assets
Asset Turnover
ROA
382.4
237.7
525.9
1,146.0
1,412.6
455.2
3,013.8
1.32
14.54%
353.8
184.2
315.7
853.7
1,336.8
414.5
2,605.0
1.25
13.07%
245.1
145.2
210
600.3
1,339.5
167.8
2,107.6
1.24
12.30%
188.5
121.6
171.8
481.9
1,127.4
163.6
1,772.9
1.15
11.55%
Accounts Payable
Other Current Liabilities
Total Current Liabilities
Non Current Liabilities
Total Liabilities
Equity
Total Liabilities and Equity
Leverage (Equity / Total Assets)
506.2
506.5
1012.7
239.8
1,252.5
1,761.3
3,013.8
1.71
426.3
407.9
834.2
284.5
1,118.7
1,486.2
2,605.0
1.75
323.0
347.3
670.3
266.4
936.7
1,170.9
2,107.6
1.80
ROE
24.9%
22.9%
22.1%
Note:
1997
1,217.4
618.3
599.1
345.5
253.6
1996
1,008.5
521.0
487.5
285.4
202.1
117.4
9.64%
72.7
7.21%
157.7
75
158.8
391.5
880.4
54.4
1,326.3
1.22
11.54%
274.0
635.7
67.5
977.2
1.25
12.01%
190.3
820.3
1.23
8.86%
276.1
275.6
551.7
328.0
879.7
893.2
1,772.9
1.98
215.6
229.1
444.7
208.2
652.9
673.4
1,326.3
1.97
131.4
141.5
272.9
174.4
447.3
529.9
977.2
1.84
234.1
171.3
405.4
414.9
820.3
1.98
22.9%
22.7%
25.0%
20.0%
Inditex fiscal year ended January 31. Fiscal year 2002, for instance, ran from February 1, 2002 to January 31, 2003.
Source: Inditex (Formatted by case writers)
16
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Exhibit 6 Inditex Store Locations by Country and Group (January 31, 2003)
Zara
Europe
Andorra
Austria
Belgium
Czech Republic
Cyprus
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Luxembourg
Malta
Norway
Poland
Portugal
Spain
Sweden
Switzerland
The Netherlands
Turkey
United Kingdom
Middle East
Bahrain
Israel
Jordan
Kuwait
Lebanon
Qatar
Saudi Arabia
United Arab Emirates
Asia-Pacific
Japan
Singapore
Americas
Argentina
Brazil
Canada
Chile
Dominican Republic
El Salvador
Mexico
United States
Uruguay
Venezuela
TOTAL
Kiddy’s
Class
1
4
15
1
3
2
1
71
21
23
1
Pull &
Bear
Massimo
Dutti Bershka Stradivarius Oysho
1
Total
5
10
9
3
1
1
29
8
2
7
75
0
6
16
2
18
6
25
0
2
11
2
4
33
1
10
2
1
73
24
39
1
5
5
3
4
1
4
155
918
2
6
5
8
19
1,325
0
4
25
2
8
5
4
15
18
81
0
6
1
7
0
5
10
9
3
1
1
83
8
2
23
145
531
59
296
250
197
153
72
1,558
1
13
4
2
1
2
7
1
3
3
2
1
5
1
5
3
2
1
2
1
3
1
4
35
200
2
4
8
17
419
7
52
59
1
11
38
200
256
1
14
1
2
1
1
3
2
1
8
4
30
0
6
1
7
0
32
155
2
2
1
2
218
20
135
4
24
0
9
48
145
60
2
168
1
1
1
2
1
4
4
14
14
128
1
1
1
4
4
1
3
2
8
1
0
0
0
0
10
16
19
9
Source: Inditex.
17
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Exhibit 7
ZARA: IT for Fast Fashion
Inditex Store Development
Year
Europe
Spain
Portugal
France
Greece
Belgium
Sweden
Malta
Cyprus
Norway
Great Britain
Germany
Switzerland
Netherlands
Poland
Andorra
Austria
Denmark
Czech Rep.
Iceland
Ireland
Italy
Finland
Luxembourg
87 88 89
90
91
92
93
94
95
96
97
98
99
57 70 85
1 2
99 201 266 323 350 391 399 433 489 603
4 11 17 28 38 49 60 74 87 97
1
3
5 13 20 30 36 47 55 59
1
6
8 10 14 17 17
4
8 11 13 17 20
1
3
3
4
6
6
1
1
1
1
2
1
2
4
5
1
1
1
1
3
2
0
769
140
68
29
28
3
2
9
1
11
17
Zara only
01
02
6
29
8
3
1
2
3
6
41
8
4
3
2
5
8
55
8
20
4
3
7
8
27
8
7
4
3
7
2
54
2
71
2
107
1
1
3
3
1
3
1
4
7
6
12
6
14
7
20
7
25
4
1
1
1
3
4
4
11
18
20
27
37
6
16
1
3
1
1
1
10
22
3
3
2
3
1
11
3
1
23
4
4
4
5
0
17
11
1
1
24
4
5
4
15
0
5
14
2
2
33
49
70
1
76
Middle East/Asia
Israel
Lebanon
Turkey
Kuwait
United Arab Emirates
China
Japan
Saudi Arabia
Bahrain
Qatar
Singapore
Jordan
8
83
5
23
9
3
10
1
1
2
145
1
406
2
66
8
29
5
7
9
3
10
1
1
2
75
0
35
6
8
1
1
1
0
45
57 71 88 105 218 292 369 430 508 541 622 748 922 1,080 1,284 1,558
507
531
0
0
0
0
0
0
0
0
0
6
Source: Inditex.
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9
2
5
2
4
0
5
6
1
1
200
35
71
23
15
0
1
3
0
17
21
2
4
4
1
4
2
1
1
0
3
1
2
411
25
5
8
8
18
0
6
15
4
4
1
2
96
0
TOTAL
692
104
64
19
21
5
2
8
1
7
7
02
225
38
67
20
14
0
0
2
0
11
15
0
3
2
1
3
2
1
1
0
0
57 71 87 104 215 288 365 419 490 521 589 678 819
0
01
918
155
73
39
33
2
4
10
1
19
24
6
2
6
5
2
2
4
1
2
2
3
3
4
1
2
2
1
1
1
1
2
5
3
5
1
2
3
939 1,101 1,317
2
2
Americas
United States
Mexico
Argentina
Venezuela
Canada
Chile
Brazil
Dominican Republic
El Salvador
Uruguay
00
11
2
8
3
4
For the exclusive use of A. BADUGU, 2022.
ZARA: IT for Fast Fashion
Exhibit 8
Source:
604-081
Dell Handhelds (as of fall 2003)
Casewriters.
19
This document is authorized for use only by ABHINASH BADUGU in 2022.
For the exclusive use of A. BADUGU, 2022.
604-081
Exhibit 9
ZARA: IT for Fast Fashion
Order Form
Source: Casewriters.
20
This document is authorized for use only by ABHINASH BADUGU in 2022.
For the exclusive use of A. BADUGU, 2022.
ZARA: IT for Fast Fashion
Exhibit 10
604-081
Organization
Amancio Ortega,
Chairman
Antonio Abril, General Counsel and Secretary
Javier Monteoliva, Legal Advisory Services
Javier Chércoles, Corporate Responsibility
José María Castellano
Deputy Chairman and CEO
Borja de la Cierva, Chief Financial Officer
Ignacio Fernández, Tax Advisory
Diego Copado, Corporate Communication
Marcos Lopéz, Capital Markets
Juan Cobián, Internet
Juan Carlos R. Cebrián
Managing Director
Agustín García-Poveda
Deputy General Manager
Administration & Systems
Business Units
Administration: Fernando Aguiar Zara: Jose Toledo
IT: Xan Salgado
Pull & Bear: Pablo del Bado
Human Resources: Jesús Vega
Massimo Dutti: Jorge Pérez
Bershka: Carlos Mato
Stradivarius: Jordi Triquell
Oysho: Sergio Bucher
Business Support Areas
Expansion: Ramón Renón
Real Estate: Fernando Martínez
International (Am, As, Mi East):
Iván Barberá, Alfonso Vázquez
International (Europe):
Luis Blanc, Luis Lara
Logistics: Lorena Alba
Raw Material: José María Vandellós
Manufacturing Plants: Directors
Source: Inditex.
21
This document is authorized for use only by ABHINASH BADUGU in 2022.
For the exclusive use of A. BADUGU, 2022.
604-081
ZARA: IT for Fast Fashion
Exhibit 11
Source:
Inditex.
Exhibit 12
Source:
Zara Point of Sales Terminal
Inditex Distribution Center (interior)
Inditex, formatted by casewriters.
22
This document is authorized for use only by ABHINASH BADUGU in 2022.
For the exclusive use of A. BADUGU, 2022.
ZARA: IT for Fast Fashion
Exhibit 13
604-081
Assumptions for Zara’s Upgrade Decision
Category
Value
Operating System for POS terminals (costs per computer/CPU)
Windows: One-time license cost
Annual maintenance fee
Unix
One-time license cost
Annual maintenance fee
Linux
One-time license cost
Service contracta
Hardware (per store, avg. 5 terminals needed per store)
POS Terminals
Wireless Router (1 per store)
Wireless Ethernet Card (1 per POS terminal)
€140
€30
€160
€25
€0
€10–€150
€5,000
€180
€50
Connectivity (annual cost per store)
High-speed Internet connection
Overall programming time required to:
Port existing POS application to new OS
Expand POS application to includeb
1. Lookups of same-store theoretical inventory
2. Lookups of other-store theoretical inventory
3. Inventory transfers
Cost per day of programming time
Time required per store to:
Install new POS terminals with new POS application
Establish wireless network
Train staff on new POS applicationc
Cost per day of installation/training time
€240
15,000 hours
3,000 hours
1,000 hours
1,000 hours
€450
16 hours
8 hours
8 hours
€2,000
Source: Casewriters’ estimate, based on available industry data.
aDepends highly on IT staff’s knowledge in Linux programming and maintenance.
bAssuming three features are developed in sequence, i.e., step 3 builds on step 2, which builds on step 1.
cAssuming new application contains inventory lookup functionality.
23
This document is authorized for use only by ABHINASH BADUGU in 2022.

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