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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

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