Strategic values of technology-driven innovation in inventory management: a case study of Zara's RFID implementation

Abstract

Inventory management has always been at the top of the agenda in the fast fashion business. Companies compete largely on strategic inventory management, which empowers quick market responsiveness. Much interest has recently been aroused by the use of radio frequency identification (RFID) in enabling product visibility along the supply chain. This paper presents a case study of Zara's RFID deployment, one of the largest-scale implementations in the industry, based on secondary data. It explores how Zara's RFID adoption aligns with its existing supply chain structure, business model and IT infrastructure. By drawing on the IT value hierarchy model (Urwiler and Frolick, 2008) in information systems literature, this paper creates a showcase for technology-enabled innovation that brings competitive differentiation in the context of inventory management in the fast fashion industry.