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NMIMS Global Access

School for Continuing Education (NGA-SCE)


Course : Information Systems for Managers
Internal Assignment Applicable for June 2016 Examination

Assignment Marks: 30

Instructions:

All Questions carry equal marks.

All Questions are compulsory

All answers to be explained in not more than 1000 words for question 1 and 2 and for
question 3 in not more than 500 words for each subsection. Use relevant examples,
illustrations as far as possible.

All answers to be written individually. Discussion and group work is not advisable.

Students are free to refer to any books/reference material/website/internet for attempting


their assignments, but are not allowed to copy the matter as it is from the source of
reference.

Students should write the assignment in their own words. Copying of assignments from
other students is not allowed.

1. Consider you are the owner of a software company and a restaurant chain has approached
you to develop a software for their restaurant. From the restaurant owners perspective
what are the inputs that you will provide to the software developer. As a developer what
are the steps that you will undertake to develop the software to ensure its success. Elaborate
on the steps in detail.

(10 marks)

2. Ranpharma drugs limited is operating in the pharmaceutical industry with a number of drug
formulations in the form of tablets, capsules, powder and syrup. These drugs are available
to the patients on prescriptions of registered practitioners only. Besides, the company has

NMIMS Global Access


School for Continuing Education (NGA-SCE)
Course : Information Systems for Managers
Internal Assignment Applicable for June 2016 Examination

some over the counter products that are available to any person without prescriptions. The
company markets its products through a network of wholesalers, who in turn have their
retailer network. The company is finding it difficult to maintain the inventory of the raw
materials, stocks that it has at its disposal. The legacy standalone systems make it difficult
for the systems of different departments to integrate with the other departments, as a result
the systems fail to capture the real market scenario. In order to streamline its operations to
achieve efficiency, the company is planning to invest in an ERP system. How would this
help the company in achieving its objectives? What are the risks in implementing the same?
(10 marks)

3. Zara is the flagship brand of the Spanish retail group, in Inditex, one of the superstars in
the fashion retail industry in the recent years. In2005, Inditex reported 21 percent sales
growth to $8.51 billion. That puts Inditex ahead of H&M, the world leading purveyor of
cheap-chic apparel, which posted $7.87billion in sales. Zara has more than 1000 stores in
31 countries. The fashion industry is a special industry. The products they deal with are
highly perishable, and they are susceptible to seasons- gross margin is meaningless if the
product does not sell as planned. For many retailers, 35 to 40 percent of the total
merchandise being sold at hefty discount is quite the norm. Zara contributes around 80
percent of group sales by concentrating on three winning formulas on which to base its
fresh fashions: short-lead time, lower quantities, and more styles. With an in-house design
team based in La Coruna, Spain, and a tightly controlled factory and a distribution network,
the company says it can take a design from drawing board to store shelf in just two weeks.
That lets Zara introduce new items every week, which keeps customers coming back again
and again to check out the latest styles. With new styles being developed and introduced
frequently each style would provide only around $20000-$300000 of retail sales, a far
lower figure than those other retailers or brands, and certainly not cost-efficient in terms

NMIMS Global Access


School for Continuing Education (NGA-SCE)
Course : Information Systems for Managers
Internal Assignment Applicable for June 2016 Examination

of design and product development cost. Moreover, Zaras success is all the more
surprising because at least half of its factories are in Europe, where ages are many times
higher than those in Asia and Africa. To maintain its quick inventory turnover, however,
the company must reduce shipping time to a minimum. The fast-fashion approach also
helps Zara reduce its exposure to fashion faux pas. The company produce batches of
clothing in such small quantities that even if it brings out a design, that no one will buy,
which happened during an unseasonably warm autumn in 2003, it can cut its losses quickly
and move on to another trend. This higher cost of product development however, is
obviously more than adequately compensated by higher realized margins. The result is that
Zara discounts only about 18 percent of its product, which is roughly half the level of
competitors. Information and communications technology is at the heart of Zaras business
supply chain. Zaras quick response to the market, and its high speed from design table to
store shelf are enabled through four critical information related areas.First, constant
collection of information on customer needs. Trend information flows daily, and is in turn
fed into the database at the companys head office. Zara outfits its store clerks with
handheld computers to record sales and customer comments, and then integrates the
collected data with design, manufacturing, and distribution functions. Designers check the
database for these dispatches as well as daily sales numbers, using the information to create
new lines and to modify existing ones. Thus, designers have access to real-time information
when deciding with the commercial team on the fabric, cut, and price points of a new
garment. As a result, the company can spot trends early on- a rather critical quantity in
fashion relating- and adjust stock accordingly within days.The second is standardization of
product information. Different or incomplete specifications and varying product
information availability normally add several weeks to a typical retailers product design
and approval process. Zara, however, stored the product information with common
definitions, allowing it to prepare designs quickly and accurately, with clear-cut

NMIMS Global Access


School for Continuing Education (NGA-SCE)
Course : Information Systems for Managers
Internal Assignment Applicable for June 2016 Examination

manufacturing instructions.The third is product and inventory management. Its inventory


management system is able to manage thousands of fabric and trim specifications, design
specifications, and physical inventory which gives Zaras team the capability to design a
garment with available stocks, rather than having to order material and wait for it to
arrive.Zaras distribution management approach is its final advantage. Its state-of-the-art
distribution facility functions with minimal human intervention. Approximately 200
kilometers of underground tracks move merchandize from Zaras manufacturing plants to
the 400 plus chutes that ensures that each order reaches it right destination. Optical reading
devices sort out and distribute more than 60,000 items of clothing an hour. Zaras
merchandise does not waste time waiting for human sorting.

Source: Motiwalla, Luvai, and Jeffrey Thompson. Enterprise Systems for Management. Harlow:
Pearson Education, 2014. Print.

a. Discuss the role of Zaras SCM system. Suggest how it can be improved. (5 marks)

b. Discuss the role of SCM in retail industry as mentioned in the case.

*********

(5 marks)

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