Upgrading Zara’s POS systems From the case study scenario, it would be recommendable for Salgado to upgrade the POS terminals to a modern operating system. This is the ideal decision for Zara as it is continually expanding its stores making it more complex to operate using the simple DOS systems which is increasingly becoming obsolete, and which is highly manual. …
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Zara’s business model sells fashion more than it does apparels. To this end, speed, agility, and flexibility in responding to changing consumer demands is essential and even more important is Zara’s need to maintain its core capability so that it cannot be imitated by other competitor in the industry (Walters, 2006; Lu and Ramamurthy, 2011:937). Failing to upgrade its POS terminals could potentially make the company lose its edge in terms of speed in delivery of fast fashion to its competitors, due to obsolete ancient technology. Although the DOS system is stable, it is increasingly facing challenges and problems. First and foremost, there too many people involved in information transfer and analysis of the ordering, fulfilment and manufacturing processes which increases the probability of errors. Though Salgado does not mind a small margin in error, a more integrated system would allow easier data transfer and also ensure accuracy in such data which would enable a balance between supply and demand. Secondly, using PDAs with small screens to enter data is strenuous and time consuming. Getting to do this every day does not help in enhancing data accuracy. Thirdly, since the POS terminals are not connected to Zara’s headquarters or stores, the sales data transmitted at the end of the day, may not fully reflect changing fashion trend sales (McFee, Dessain, and Sjoman, 2007). Within the fast fashion industry, what is fashionable today may be obsolete and unfashionable tomorrow (Tesseras, 2009). Fashion changes fast, and Zara needs a system that can wholly and efficiently reflect this based on cloth’s designs, colour, and even the sizes. And finally, the very fact that Zara’s hardware vendor for POS terminals refuses to enter into a contractual agreement regarding their assurance not to change the DOS operating system, does not fully assure Zara that it would not in the future (McFee, Dessain, and Sjoman, 2007). This presents a risk to Zara’s operations. Where the costs of maintaining the ancient system surpasses or equals the benefits that the vendors gain from maintaining the system for Zara, the vendors may decide to change the machines. Upgrading the POS terminals into a modern operating system would enable development of newer capabilities into the software which would potentially enable the company to build in store networks as well as give the employee the ability to look up inventory balances in their own stores and in other stores. This would enable the store managers to understand which cloths are selling fast, and which ones they are left in inventory without having to go through the store to physically count them. Therefore it would enhance decision making with regard to what kind of clothes, in what design, colour and size are required. Furthermore, connectivity among stores which are nearer would enhance sharing of data on which products are in one store yet is in shortage in another (Caro and Gallien, 2010:261-265; Caro, et al, 2010:74-79). This would enhance fast movement of merchandise from one store to another, thus enhancing sales. Such information technology capabilities would not only streamline information flow along the supply chain in real time but also enable the headquarters to be connected to a store’s real time data sales which would be essential in making any decisions with regard to design, size and colours, as well as using actual real time data in planning and shortening cycle times for each of the stores (Walters, 2006). The real time data also would enable the headqu
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