IKEA Supply Chain Management
- About IKEA
- Supply Chain
- Activities
- Push/Pull Strategy
- ABC Analysis
- Drivers and Metrics
Transportation
Inventory
- Conclusion and Recommendation
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
- 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
- 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
- IKEA minimize logistics costs and waiting time for customers
Strategic Fit
The Product
- 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.
- 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.
IKEA arrange their products as flat packs in order to :
Push/Pull Strategy
- 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.
- Transportation and Distribution
- 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