Ikea - operations and supply management
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Transcript of Ikea - operations and supply management
25.03.15Group BMIM_Sept_Section 1
F O U N D B Y I N G V A R
K A M P R A D , S W E D E N , I N
1 9 4 3
A LI'LL ABOUT IKEA
COMPETE BY USING A NEW
STRATEGY - COST REDUCTION
AND INNOVATIVE IDEAS
THE FIRST SHOPS OPENED
OUTSIDE OF SWEDEN
WHERE IN DENMARK AND
NORWAY
H E A D Q U A R T E R - N E T H E R L A N D S
S P R E A D A L L A R O U N D 4 6
C O U N T R I E S W I T H
3 5 1 S T O R E S .
IKEA DELIVERS OVER 250
MILLION CUBIC METRES
OF PRODUCTS EACH
YEAR.
IKEA POSITIONING
"For price and design conscious customers all around the world,who are looking for a wide range of valuable products, IKEA with aScandinavian heritage, makes people's lives easier by offering themhome furniture with a form, function and affordability that featuresgood quality and innovative designs while welcoming customers
with a unique purchasing experience as IKEA allows them to touch,select, carry and assemble the best value for money products to their
homes, making their customers feel in-vogue and satisfied."
GROUP F - SMS1
“By offering a wide range of
well-designed, functional
home furnishing products at
prices so low as many people
as possible will be able to
afford them. Also by giving
people the possibility to grow,
as individual and in their
professional lives, to create a
better relationship with
customers. “
MISSION
BUSINESS MODEL
Shorten the distancebetween the need of thecustomers and thepossibilities of the suppliers.
Low cost in every operationdepartment, which will leadto low prices and highvolumes.
The IKEA Experience
OPERATIONS &
SUPPLY
BusinessIntelligence
Design
ExternalSupplier
Swed Wood
Bidcompetition
andProduction
BusinessIntelligence Design Trading
BusinessIntelligence Design
Production &
Trading
HOME VISITS
TRENDRESEARCH
FORECASTPRODUCTIONVOLUMES
BACKWARDINTEGRATION
ALLIGNED WITHMANUFACTURING
EASY CUSTOMERASSEMBLY
LOW COST
LOWTRANSPORTATIONCOST
SWEDWOOD
EXTERNALSUPPLIERS - 80%
Modularity
Modularity : a production concept widely used by IKEA
"Modularity is the degree to which a system componentsmay be separated and recombined"Eg: wheels of a table are the same like that of a chair
IKEA & it's Suppliers
OBJECTIVE : gain long-term relationships, encourage suppliers todeliver better quality
IKEA AUDIT : over every external supplier in order to meet their idealworking conditions, and avoid exploitation among their workforce.
Once IKEA commits to it's suppliers for a certain amount of units, it hasto take the delivery of those units - THERE'S NO GOING BACK
IKEA Way of Purchasing Home Furnishing Products (IWAY), helpmanufacturers reduce the impact of their activities on the environment.IWAY raise standards by developing sustainable business activities andleaving positive impacts on the business environment in which thesuppliers operate.
SUPPLIERS AROUNDTHE WORLD
Sweden9%
Italy7%
Germany6%
Poland12%
China18%
DistributionCentre
StoresFinal
Customer
DistributionDepartment
RetailDepartment
MarketingDepartment
Vendor managedinventory system
DistributionDepartment
RetailDepartment
MarketingDepartment
Distribution centreswork as wholesaler
IKEA´s store workas a warehouse -
Flat packaging isused to minimizedistribution cost
7 x units pershipping than theproduct alreadyassembled
Forecasting systembased on historicaldata provide eachstore with the idealquantity
Clear message: costadvantage of brand
70% of budget -printing catalogues
212 million of copiesof IKEA cataloguesprinted in 29languages, onlinecataloguesdownloaded 9.7million times.
IKEA & it's Customers
IKEA design's focus on people with limited income and limited livingspace
IKEA Consumers : half producers-half consumers, the products are selftransported, self assembled
To achieve a low cost, no frill services are offered to the consumers
IKEA strives to offer its consumers - Quality, Speed, Dependability,Flexibility and Cost.IKEA offers it's consumers 120 days to return or exchange the product ifunsatisfied.
IKEA & it's other Customer Services
IKEA offers for the furniture to be delivered to the consumer's home fora premium price
IKEA also sends a technician to the consumer's home for assembling theproduct if needed.
IKEA sends over "Dr. Furniture" to the consumer's home if the consumeris dissatisfied or has incurred any injury from IKEA's products- incase the product caused an injury to the consumer or harmed theconsumer, the product will be pulled out of production and the retailstores immediately.
81%16%NORTHAMERICA
EUROPE
3%
3%
ASIA &AUSTRALIA
ASIA &AUSTRALIA
SALES AROUNDTHE WORLD
Improve conditions for their direct and indirectemployees
Expand into new countries
Entering the second hand furniture market
Improve the relationship between suppliers andshops, for the suppliers to understand thecustomers and the reasons behind every purchaseor product return better.
IKEA's FUTURE GROWTH
Our visit to IKEA, Madrid
Thank you