Focus on profit rather than volumes or margins. In his sales negotiations with the IKEA purchasers he will be dealing with people who understand his business, particularly the cost drivers. Whilst this could be viewed as a disadvantage when it comes to price negotiations, it means that the IKEA traders will work with him to lower his costs so that they can buy at an acceptable price and he can sell at an acceptable profit. This contrasts with the poker playing' take it or leave it' approach that characterises many such negotiations in the industry. Ultimately IKEA want to keep the same suppliers for a long time so that they can develop them and to avoid the expense of starting new relationships with suppliers.
Technical advice. IKEA staff are on hand to give advice on a number of aspects of the business from the layout and flow on the factory floor to the design of packaging. This allows the supplier to develop distinctive competences in, for example, the application of veneers and lacquers.
IT. The supplier will be linked to ECIS, IKEA's own system. This will allow him to have total transparency of the supply chain so that he can see IKEA sales forecasts and view inventory levels in distribution centres and stores. This helps him to anticipate orders. Upstream, the system facilitates JIT from his sub-suppliers. As the system becomes more refined additional benefits are coming on-stream such as a worldwide trading domain for IKEA partners to allow them to find the cheapest sources of raw
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