Topics: Supply chain management, Supply chain, IKEA Pages: 11 (3348 words) Published: April 17, 2013
About ikeas

1. Introduction

Undoubtedly, in the modern, technological and developed world, IT defined as the storage, protection, conversion, transmission and retrieval of data, has a significant role in various important activities and contributes in industrial development. The usage of Information technology in businesses is a useful tool in managing and administering their regular operations and activities. An example of wise and effective application of IT into business is IKEA. IKEA is the world's largest home furnishing retailer with stores located worldwide. Every year IKEA stores welcome 565 million visitors, while more than 450 million visits have been recently recorded to its website. The followed low-price strategy coupled with a wide range of functional, well designed products that satisfy every lifestyle and life stage of its customers, who come from every age group and type of household, is responsible for its rapid growth and its enormous success.

2. The company

2.1 Company overview

IKEA began to design its own furniture in 1955 and opened its first store in Sweden in 1958. In1959 it began to produce self-assembly furniture to lower freight chargers and other costs to retail customers, an approach that continues until today. IKEA now has over 200 stores in 30 countries. Each store has about 9500 items for sale. Its 2008 sales were over €20 billion.

The company, over time has become a leader in its niche by the choices made in that process. Nevertheless, the IKEA uniqueness presents a formidable barrier to competitors- one that supply chain planners can look in creating their own business models.

The “IKEA concept” guides the company. This concept is to make “well-designed, functional home furnishing products” at low, affordable prices. In fact, the design process for a new product begins by setting the retail price. It then proceeds to design production processes that meet the cost objective. Finally, the product is designed to IKEA's style standard. This standard omits cost-adding frills that add no value in terms of functionality.

Each IKEA store carries -on average - a selection of 12000 products, while the core rage is the same worldwide and independently of the store size. Managing over 200 stores spread in 30 countries worldwide and having 1,600 suppliers in 55 countries, requires apart from outstanding support staff, exceptional logistics and the best information systems. IKEA, in order to maintain an integral supply chain at its most efficient level, it must incorporate the right people, the high technology and the best information systems.

2.2 IKEA's timeline

2.2 SWOT Analysis

2.3 IKEA's challenges and goals

The company requires the best tools available to ensure a faultless transition and has to be able to solve any problems as quickly as possible, particularly when it is the world's leading home furnishing retailer. The rapid development of technology creates new standards and increases demands in planning process. The company has to be modernized and able to adjust quickly to changes, place additional pressure on the whole operation of the supply network and be innovator in using the most up to date information systems. Being sustainable should remain a central part of IKEA's image. Failure to deal with new challenges and problems that arise due to market forces and to various economic factors will cost IKEA in every area of its business. Hence, to ensure that this would not happen, IKEA needs to invest in IT, helping the company to adapt quickly and easily to the developing situations (agility) and face any problems occurred. Investing in IT can achieve: • Increased visibility in the sales patterns of IKEA products. • Improved forecast accuracy.

• Improved planner experience and productivity through exception-based management. • Enabled the consolidation of supplier base with a focus on low-cost countries. • Increased overall supply chain visibility...
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