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Class 03 Zara and Supply Chain

Class 03 Zara and Supply Chain - M I S 302F I ntroduction...

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Leadership Cl i ck t o edi t Mast er subt i t l e st yl e Class 3 – September 1, 2011 Chapter 3: Zara & Supply Chain MIS 302F Introduction to Information Technology Management
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The fashion director for luxury goods maker LVMH calls Zara, “the most innovative and devastating retailer in the world.” Why?
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What do we know about each Largest retailer in world Shuns ads and sales Creates “fashion of the moment” Fashion driven by surveyed customers Strategic decisions and small batches Buy it or it’s gone WAS the largest Big failed ad campaigns Designs created for each season Fashion driven by high profile in-house designers Places BIG bets on big orders If they’re out of stock, just come back next
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Why Do We Give A Damn? Zara’s business has grown astronomically while Gap has struggled. Zara’s strategy is not the norm yet it’s extremely successful – DIFFERENT IS GOOD Technology makes all of this possible.
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Zara v. Gap: Key Industry Metrics Gap Zara Revenue $14.5 billion $14.7 billion Net Income $967 million $1.68 billion Number of Stores 3,149 4,359 Number of Countries 6 73 Biggest Brand Gap Zara Number of Other Brands 4 7 Based in San Francisco, USA Arteixo (near La Coruña), Spain First Store Opened 1969 1975 Rohwedder, Zara Grows as Retail Rivals Struggle, WSJ, 3/26/09
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Gap bets on more than khaki Inventory = Death How does Zara manage inventory differently than GAP?
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Zara Wins with Information Profound vertical integration Technology-orchestrated supplier coordination Just-in-time manufacturing Finely tuned logistics RESULT$ 10x unique products 12x turnaround speed
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IT = Strategic Business Value It’s not technology; it’s INFORMATION IT adds efficiency and competitive advantage, the life blood of success, to every business area
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What Is Information? Knowledge derived from data Data presented in meaningful context Data processed by summing, ordering, averaging, grouping, comparing, or other similar operations A difference that makes a difference
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9/14/11 IS 5-Component Framework {2366421D-1636-4198-80CF-D1D1D62CF3EE} Hardware {00E227D6-F56B-4BE8-8926-75E7C7068353} Software {77591EF3-BE03-4BCC-8D48-947D410556D0} Data {7BE46BEE-463B-4DA7-940F-492A25960494} Process {ACD3A0EC-92B0-4F9C-8513-23C9729ED363} People Computer Side Human Side Automation moves work from the human side to the computer side The more difficult the decision, the more human processing is needed Automation speeds up processes UNLESS a complex decision is needed; then human participation is essential for moving the process forward RETHINK processes before automating them – WHY?
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