Ikea Management Analysis

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IKEA Supply Chain Analysis
Catalogue
1. Abstract ………………………………………………………………...3

2. Introduction…………………………………………………………….3-4

3. IKEA Supply Chain Strategy…………………………………………..4-6

4. Supply Chain Management of IKEA…………………………………..6-9 3.1. Supplier Management……………………………………………..6-7 3.2. Store Design……………………………………………………….7-8 3.3. Warehouse Management…………………………………………..8-9

4. IKEA Supply Chain……………………………………………………9-13 4.1. IKEA Supply Chain System……………………………………….9-11 4.2. IKEA Supply Chain Planning……………………………………...11-13 4.2.1. Planning concept overview……………………..……………11-12 4.2.2. Sales planning………………………………………………..12-13 4.2.3. Demand planning…………………………………………….13

5. Problems……………………………..………………………………...14-15 5.1. Lack of Central Coordination…………………………………….14 5.2. Lack of Accurate Sale Forecasts………………………………….14-15 5.3. Inventory Costs are too high…………………..………………….15

6. Recommendations…………………………………………………….15-16

7. References…………………………………………………………….17-18

Abstract: This article is an analysis of the IKEA’s supply chain. IKEA’s supply chain is globally with sales in more than 250 own stores in 24 countries and 32 external franchisees in 16 countries. It has special supplier management, store design, and warehouse management. IKEA Supply Chain system includes IOS, TSO, material and suppliers, DC and IKEA store. IKEA global planning has seven processes. Sale planning and demand planning are in this article. IKEA’s supply chain was operated really successful, however, it still exist some problems, like lack of central coordination, inaccurate sale forecasts, and high inventory costs. In the end, this article will provide some recommendations to solve those problems.

Introduction
IKEA, founded in 1943, is one of the best home furniture company in the world whose, and its vision is “To provide better life for everyone”. IKEA provides modern and fashionable low cost furniture for over 38 countries with 301 stores. It is the largest furniture retail chain in the world and boasts a range of 12000 products, including home furniture, accessories and some other stuff. What’s more, it’s concern for people and environment lead to excellent use of raw material and energy, which result in their green targets and the overall environment. A supply chain is a network of retailers, distributors, transporters, storage facilities, and suppliers that participate in the production, delivery, and sale of a product to the consumer. The supply chain is typically made up of multiple companies who coordinate activities to set themselves apart from the competition. A supply chain has three key parts:

Supply focuses on the raw materials supplied to manufacturing, including how, when, and from what location. Manufacturing focuses on converting these raw materials into finished products. Distribution focuses on ensuring these products reach the consumers through an organized network of distributors, warehouses, and retailers. Ikea is a worldwide company and its supply chain also deserves us to study. In this paper we are going to analyze the IKEA's supply chain in the market and we will also analysis the strategy and plan of the company. In addition, we would give our proposed recommendation in the end.

IKEA Supply Chain Strategy
IKEA’s supply chain is global with sales in more than 250 own stores in 24 countries and 32 external franchisees in 16 countries. The stores are supplied through 31 distribution countries, or directly from the 1,350 suppliers in more than 50 countries. IKEA’s supply chain consequently has a global spread with both sales and purchasing in all major regions of the world. IKEA's growth has been tremendous and sales are still growing. Currently IKEA plans to open 10-20 new stores every year with a goal to double sales within the coming five year. Considering the pace of growth in sales, the many stores and...
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