Zara 's Operation Strategy And How It Uses Technology Into Operations For Fast Communication Between Different Departments Essay

Operations Management in an organisation is repsonsible for managing and in making decisions concerning the activities that convert inputs into outputs , that is goods and services. This covers both short term actvities as well as longer term activities to meet strategic goals. Inputs can be the raw materaials need to manufacture goods such as furniture or the computers needed to create a service like online shopping site. Operation management’s role is to make decisions to improve how operation activities function, for example, to improve the final quality of the output or to change production methods to be more efficient in terms of cost and in time.

Hence, technology is bettering reliability and speed with which information is divulged (Porter, 1980). Hand-held computers or PDA’s are utilized by Zara to collect information on consumer needs between retail stores and the factory in La Coruna. This along with regular telephone conversations between store managers and marketing specialists are one of the reasons that Zara’s information network is so effective. The utilization of PDA’s can be done by any company; it is Zara’s determination not to allow important information to fall by the wayside that assists with its success. PDAs are connected to the store 's point-of-sale (POS) system, enabling managers to see how garments rank by sales. In as little as an hour, managers can send information that combine the hard data captured at the POS intermixed with acumen on what customers would like to see. All of this data allows Zara to design and produce styles and orders based on feedback rather than guesswork. Hence, Zara avoids costly overproduction and the consequent sales and mark-downs that are so widespread in the fast fashion industry (Rohwedder and Johnson, 2008).

What distinguishes Zara from its competitors is the feedback that Zara’s managers get from the customers at the point of sale about new garments or new products that they are interested in. Around 60 percent of its products are permanent and the remaining 40 percent vary continually. The company estimates that customers visit a Zara store 17 times a year on average, compared to merely four visits for other fashion firms. The outlets are situated in main commercial areas and the interiors are designed to create a unique atmosphere with attractive window displays. The firm spends only 0.3 percent of its annual turnover on advertising , normally at the beginning of the sales season or on the occasion of a new store opening. The store is considered its most effective communication tool. The two key factors in Zara’s business model – the time factor and the store as a source of information – demonstrate the company’s customer

Quick response of Zara leads it to be successful in the fashion clothing industry. Zara adopts international strategy for its operation. With vertical integration, it benefits Zara in cost aspect, however, it involves some risks. Due to our anaylysis on Zara’s operations, some of the recommendations are made to facilitate its further improvements.

Operations management (OM) is the business function responsible for managing the process of creation of goods and services. It involves planning, organizing, coordinating, and controlling all the resources needed to produce a company’s goods and services. Because operations

By periodical reports received from shop assistants over the Internet, with opinions, interests and consumer preferences, and sent to the departments within the company, Zara adapts its outputs to the real demand. Therefore, different sources of explicit knowledge are received for combining them and creating new explicit knowledge. (María Teresa GARCÍA-ÁLVAREZ, p.1000)

According to, “(Jacobs & Chase, 2008), “Operations Management is the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services”. It is a key element in the improvement in productivity in an organization. To establish a competitive advantage the operation management should contribute to productivity growth. It is the management of the system that produce goods and deliver a services.

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

People can say that operations management has existed since man start to produced goods and services to meet their needs and necessities. Although, the origin of operations may be come from ancient civilizations, their major evolution in history is practically refers to the last 250 years. Therefore, the story is presented in accordance with the most important contributions or primitive impulses and not strictly chronological terms. There are several important areas that have contributed to the evolution and development of operation management.

There are several ingenious steps taken by Zara that proves both profitable and unprecedented. Zara has used technology to revolutionize their business, from buying the unprocessed cloth to determining which color die to use and what to make with that cloth. The technology process continues on the manufacturing lines and all the way to the final sale. But it does not stop there, it goes beyond the point of sale to question the reasons why a purchase was not made after a client expressed an interest in an item. The point of sale system provides real time data which is given immediate attention.

Operations Management Process is the central arteries within the organization because it produces the planning process for goods and services, which are its reason for existent. Operations management is linked to all organizations as every organization is producing either a product or a service. However, it cannot be said to be the most important function since there are other functional areas and boundaries within an organization. In today's fast changing world, organizations have to have a tendency towards being efficient, effective and innovative to the changing environment to succeed. Operations Management has to use metrics in order for them to accomplish their task and be successful with

Operations management can also be referred as a business practice that are used to generate profit for an organization with the use of optimal resources. It includes function such as material requirement planning, managing purchases, storage, logistic and evaluation of processes. The focus is on efficiency and effectiveness while performing these functions. Thus it can be concluded that operations management involves measurement and analysis of processes.

The core concept of Zara 's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara 's business model.  Through the entire process of Zara 's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology.  These four elements are involved in every aspect of the business.

Zara is a clothing and accessories retailer selling stylish apparel at affordable prices, and it is also the most profitable brand of the Spanish clothing retail group Inditex SA. Ortega planned for this new Zara outlet, located near his factory in La Coruna in northern Spain, to sell this overstock merchandise himself. Since then, Zara has expanded into 500 stores in 68 countries as of January 2007 and has become a leader in customized fashion retailing. This assignment presents core competencies to help Zara achieve competitive advantages in fashion industry. Besides, we also offer five competitive objectives about quality, speed, flexibility, dependability and cost to evaluate

Until now, every garment that is product in Zara’s factories around the world has to travel back to Spain in order to go through quality controls, and is then send to its distributors. But the continuous flows of goods from all the productions sites to Spain and from Spain to the markets of sell, as well as the relative communication flows necessary to such a business model will inevitably slow down as Zara will have to deal with a constantly growing number of customers. Thus, the highly centralized information system of Zara seems not to be easily applicable in Asia, in addition to being time and money consuming.