Ikea Distribution
Table of Contents: 1. IKEA – An Introduction …………………………………………………………………………….. 2 2. The reason of why distribution is such a key element of IKEA’s value chain.. 2 3.1 Distribution System of IKEA ………………………………………………………………………… 2 3.2 Porter’s and IKEA modified value chain ……………………………………………………….. 2 3.3 Importance of distribution for IKEA value chain …………………………………………… 2 3. SMA techniques in IKEA for managing its distribution network ………………….. 3 4.4 Target costing ………………………………………………………………………………………………. 3 4.5 Customer profitability ………………………………………………………………………………….. 3 4.6.1 Customer Revenue …………………………………………………………………. 3 4.6.2 Customer Costs ………………………………………………………………………. 4 4.6 Rolling forecasts strategy …………………………………………………………………………….. 4 4.7 Balance score card ……………………………………………………………………………………….. 4 4. Recommendation/Conclusion ……………………………………………………………………. 4
APPENDIX ………………………………………………………………………………………………….. 6
1. IKEA – An Introduction
IKEA, a home furnishing product seller and distributor, was originally founded in Sweden and becoming the world leading and internationalize company in its field with more than 300 stores, 27 distribution centres and 11 customer distribution centres over the world in 40 countries. It has created more than 9,500 products with a low cost, good quality, flat package, unpronounceable name and do-it-yourself concepts. An effective system in IKEA has been renowned in many areas including supply chain management, cost management and human resource management. The background and business function of IKEA can be found in Appendix 1. 2. The reason of why distribution is such a key element of IKEA’s value chain 2.1 Distribution System of IKEA: IKEA distribution system starts from receiving finished goods supplied from suppliers or manufacturers into IKEA distribution centres and retail stores. IKEA perform an inventory management and warehousing system. Customers
APPENDIX ………………………………………………………………………………………………….. 6
1. IKEA – An Introduction
IKEA, a home furnishing product seller and distributor, was originally founded in Sweden and becoming the world leading and internationalize company in its field with more than 300 stores, 27 distribution centres and 11 customer distribution centres over the world in 40 countries. It has created more than 9,500 products with a low cost, good quality, flat package, unpronounceable name and do-it-yourself concepts. An effective system in IKEA has been renowned in many areas including supply chain management, cost management and human resource management. The background and business function of IKEA can be found in Appendix 1. 2. The reason of why distribution is such a key element of IKEA’s value chain 2.1 Distribution System of IKEA: IKEA distribution system starts from receiving finished goods supplied from suppliers or manufacturers into IKEA distribution centres and retail stores. IKEA perform an inventory management and warehousing system. Customers