Create a better everyday life for may people
Conclusion
We have provided recommendations for
- inventory management
- customer service
- information sharing
- transport
- and supplier/manufacturer relationships
which goes in line of IKEA'S vision
we foresee it working well in both the long run
Primary Sector
Thank you....
Global Centralized Supply Chain Planning
- evolution of supply chain and logistics
- 2010, changed from decentralized to a centralized planning of its supply chains.
- For better control of supply chain & to enhance delivery service and cost
- IKEA designs products in Sweden
- Sources raw materials from over 1,3000 suppliers in 50 countries.
- Uses trading services
- help negotiate prices with suppliers, carry out quality inspections of materials and analyze the carbon footprint
- social networking stage of procurement where organizational boundaries are removed
- Food products are source both locally and internationally
- Ethical procurement – IWAY
- Master-servant relationship
Transport
- Center of processes located at IKEA of Sweden
- Supervises the IKEA universe & develops long-term plans
- influences decisions concerning items being carried, purchasing, suppliers, distribution and store coordination
Recommendation
Suppliers / Manufacturers
damaged goods, fragile packing, untrained staff
- encase their goods in added protective layer when in transport
- have soft paddings installed on transport vehicles
- Improve the packaging on flimsy products
- training on how to maintain and store goods
- frequent product recalls
- what role does IWAY play?
- Is there a need to re-format IWAY?
- Run added test on random products on every level of the supply chain, not just production
- ensure a local representative for IKEA is hired for suppliers & manufacturers of different countries
- - Constant three way communication between IKEA of Sweden, IKE
- A Retailers and 3rd party suppliers/manufacturers. (ERP)
IWAY
Recommendation
IKEA Malaysia's Supply Chain
- stands for IKEA Way of Purchasing Home Furnishing Products
- requirements that is place for products and services and details what they can expect in return from IKEA.
- covers working conditions, the prevention of child labour, the environment, responsible forestry management and more
- must be adhered by all IKEA suppliers , manufacturers and third party agencies employed
Reverse Logistics
Retail Outlet
- the wastage from one manufacturing process would be used in the production of another item to form a new product
- Example : LUSYBLOM cushions , filled with leftovers from IKEA quilt production
- encourage customer to return waste by awarding points . Will then repair such products instead of discarding them
- Disposal of light bulbs in ethical way, in secure landfills in Bukit Nanas, Seremban
Recommendations
Customer Service
Information Flow
For IKEA Staff,
recommended use of ERP
Secondary Sector
Introduction
- IKEA Malaysia usually addresses the complaints very generically
- reimbursment? closure?
- Employ and screen through employees thoroughly to ensure they are of high caliber
- have regular ‘surprise’ check ups’ or inspections.
- ensuring customers with reimbursements when
- Carry out proper actions against employees (ex: character development training / warning letters)
_____________
For Customers, use resources that are already available
- IKEA uses the mass-customization production strategy.
- ‘One-design-suits-all’
- Design the price tag first, then develop a product to suit the price
- many of IKEA products are very similar in design, color or material
- Uses the principle of postponement to differ products from one another
- IKEA’s manufacturing is largely offshored
- Developing countries like China to keep costs low
- IKEA outsources other jobs like the printing of their worldwide catalog to India or the central IT operations to Capgemini, HCL and IBM.
- Ikea also outsources to their customers for the final assembly of the product.
Recommendations
Tertiary Sector
Risk Management
- Risk test are carried out during the production.
- After approval, will be reviewed for a second time by IKEA of Sweden.
- Also, Ikea hires third-party accredited test laboratories
- run random tests on their products for any harmful chemicals
Inventory
- IKEA Malaysia’s distribution has the capacity to hold 30 containers
- IKEA retail store in Damansara acts as a warehouse as well
- High holding cost due to high inventory levels
- High inventory to keep up with highly demanded products
- Customers part of their supply chain ( a strategy to reduce cost)
- In order to reduce holding cost, there is the Flat Pack phenomenon
- Benefits: practicing FCL (full container loads), more can be packed in a container.
Plans for newly available space
- More showrooms
- Customer Recreation Area
- Parking Space
- Check-out Counters
- large volume of inventory incurs a large amount of holding cost
- That space could be used in other , more profitable ways
- Reduce inventory level by using multi period inventory system (P-Model)
- Recommend for IKEA to reduce ordering time period to weekly
- By ordering in a shorter time period, reduce safety stock in stores
design by Dóri Sirály for Prezi