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Transcript

IKEA Supply Chain Management

Outline

  • About IKEA
  • Supply Chain
  • Activities
  • Push/Pull Strategy
  • ABC Analysis
  • Drivers and Metrics

Transportation

Inventory

  • Conclusion and Recommendation

Prepared by:

  • Abdi Fiqi
  • Ash
  • Mayur Handa

Core Business:

IKEA is considered as the largest furniture retailer in the world with:

42 distribution sites,

300 retailers

Operating in 36 countries.

IKEA established eight stores in Australia.

About IKEA

Customers & Performance Management

Products

  • A items are very important for an organization. Due to the high value of these items A, everyday value analysis is required.
  • B items are important, but of course less important, than A items and more important than C items.
  • C items are slightly important.

ABC Analysis

IKEA Cycle Counting Policy

Benefits of Cycle counting:

  • Few mistakes in item identification

Cycle Counting:

  • The ability to identify and correct record errors
  • The operation does not have to be shut-down during a cycle count
  • Fewer, more experienced people are used to perform a cycle count
  • There is a systematic improvement in the processes that dictate inaccurate records

Inventory

Types of inventory:

  • Raw materials
  • Work in process
  • Maintenance/repair/operating (MRO)
  • Finished goods

Drivers and Metrics

  • Mode of Transportation-Truck
  • Trucks are a relatively quick and very flexible mode of transport.

Transportation

Transportation Process

Conclusion and Recommendation

Thank you

Resources

Strategic Fit

  • Customers are part of their supply chain management
  • Customers collect their furniture from the self-service area

Customers

  • IKEA minimize logistics costs and waiting time for customers

Strategic Fit

The Product

Distribution Centers

  • IKEA use barcodes in order to track and manage their products
  • Packed products are transported from the manufacturer to distribution centres that are located worldwide to cater the demand of their retail stores
  • IKEA has 42 distribution centres with large inventory and wide array of products.

Transportation

  • IKEA transport products from distribution centers to retailer stores either by train or ships.
  • IKEA avoid using air shipment in order to keep the prices of their products as low as possible.

Manufactures

IKEA arrange their products as flat packs in order to :

Push/Pull Strategy

IKEA push/pull strategy

Retailer Stores

  • Unlike most furniture companies, retail outlets in IKEA act as warehouses.
  • The replenishment at the retailer stores are done every night 365 days a year.
  • To ensure that customers can find the product they are looking for easily as they are part of the supply chain.

Suppliers

Activities

  • Supply of Raw Material
  • Inventory
  • Transportation and Distribution
  • Items Replenishment
  • IKEA has over 1,400 global suppliers (64% from European countries), with the largest supplier market in China and Poland
  • IKEA manages their supplier by having long lasting relationships with their suppliers
  • IKEA has the ownership for their product, which allows to change suppliers when needed

Strategic Fit

The main stages of

supply chain in IKEA are:

Strategic Fit

Supply Chain

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