Ikea Erp

Topics: Supply chain management, Inventory, Supply chain Pages: 2 (618 words) Published: July 6, 2011
IKEA has been suffered from the difficulties faced by production-oriented retailers. IKEA project manager said that it was not enough for them to manage the demand only. They must manage the production too, and keep the supply and demand in balance. In the mid-1990s, it became clear to IKEA that the retailer's inventory model wouldn't work smoothly. The inventory costs were already too high. After mid-1990s, ERP implementation failed to fix IKEA's inventory management problems. The planning team composed a rudimentary list of the qualities, so stability and reliability were obvious musts. IKEA manages a whole range of production, which from raw materials to finished product. They have to coordinate with more than 1,600 suppliers worldwide. When sales for a product turns out surprisingly high, it would empty from their warehouse, and when the demand didn't reach the expectations, the merchandise had already produced would back up in the facilities. However, the most important problem for IKEA was an integrated planning platform that can provide a consistent working environment for the retailer's product managers worldwide. IKEA has been working on differentiate itself with other retailers. They not only offer unique designs, but also share a typical warehouse on its ground level. Meanwhile, on the second level they provide a cozy environment where customers can enjoy all kinds of furnishing concepts. IKEA in-stores logistics model is very novel and was welcomed by their customers. The most important thing is it can help IKEA saving costs and increasing productivity significantly. On the ground floor, the products selected by customers are picked from pallet location that placed as high as the typical person could reach. Additional product is stored in reserve zone above these locations. Inventory is cut down to the lower space at night because forklifts and pallet jacks are not used during store hours for safety reasons. The rest space contains items...
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