INDITEX: A growing player in fashion retail Sales based on fast-moving fads and trends, through flexible manufacturing Large

variety of clothing, huge retail network at prime locations IT dependence: Primarily for daily operations of reorder and for demand/supply matching Short term problem: Whether to upgrade the existing POS terminals to suit modern OSes, and whether to include additional features Long-term issue: Decide on level of IS involvement in the event of business expansion into diverse markets

Decentralized Decision Making: More responsibility to Store managers Autonomy to the teams of commercials Store product managers for market research

Operations: Ordering

Fulfillment

Design& Manuf..

Marketing: Separate distribution centers to manage the orders. Less advertising Location and Layout of the stores were more focused upon. Pricing determined by product managers

Information Technology: POS terminals with DOS compatibility Self developed applications by IT personnel. Centralized at La Coruna. Automated conveyor belts and PDAs were used.

Purchase behavior and patterns of the customers. Changing fashion trends across the globe. Order information. Area-wise sales data (for store-to-store transfers) The stock levels to determine the replenishment quantities. Product information.

Factors supporting scalability 1) Flexible Manufacturing systems Easily replicable Manufacturing system for different markets in other continents 2) Decentralized decision-making Localization of business through autonomy in production planning and sales 3) Strong financial position - growth phase Healthy position of profitability (NPM) and asset utilization(RoA)

Factors impeding scalability 1) Elementary level of data management No data on metrics like inventory, manforce, 2) Demand - supply gap No networking amongst stores; nor between stores and La Coruna head office Demand routed through Store Manager; production by Product Manager 3)Compatibility issues DOS based IS will be incompatible with other OSes; critical for daily operations

Should the company upgrade the POS terminals to a modern OS?

Outdated DOS being used for the POS system: Hardware vendor for POS Terminals could upgrade machines, or some peripherals for them, so that they are not DOS compatible anymore, in which case the company runs a risk of not having/finding a hardware for their existing legacy software.. The modern OS are compatible with latest technologies and come with utility softwares like spreadsheets, docs, browsers. With the existing system we need to patch the system to get these basic functionalities which is a waste of time and resource. The modern OS is preferable if we want to have new functionalities like inventory management system, Reports and inquiries, etc.

Should the company build in-store networks?

Yes. Currently the employees copied daily sales totals from each POS terminal onto a floppy disk then carried these to one modemequipped terminal. Building an in-store network will reduce the manual effort, and automatically communicate the daily sales information to the La Coruna Headquarters. And we can add new functional capabilities like Video Surveillance, which can help not only in preventing theft but to understand customer purchase behavior. And also to enable an Inventory management system, we need instore network.

Should the company give employees the ability to lookup inventory balances in for items in their own stores?

An effective inventory management system should enable the employees to lookup inventory balances in their own store as well as in other stores nearby, connected to this system centrally. The advantages of an looking up inventory balances in store are, store managers can get the inventory levels on the fly, and can take necessary action in time. Also it will help in placing the replenishment orders swiftly. It will also enable the staff to serve the customers better, by finding faster, the required product or sku in the store. While being able to look up the inventory balances in other store will able to manage the demand fluctuations and stock levels better, and will be helpful in replenishing the stock earlier and cost effectively, if a product one store requires is available in the nearby store.