Global supply chain planning at IKEAFrom supplier to store

- A case study and analysis.

Nikunj RanaME INDUSTRIAL(GCET)

IKEA’s supply chain has a global spread with growing sales and purchasing in all major regions of the world.

This article outlines IKEA’s global supply chain planning concept and describes the roles of the planning organization, data quality and software support in the concept. Its cornerstones are mutually integrated planning processes, a centralized planning organization, focus on data quality, use of advanced software support and structured change management during implementation

296 IKEA stores in 36 countries. 27 distribution centers. 11 customer distribution centers in 16

countries. 41 trading services offices in 30 countries. 1380 suppliers in 54 countries. Purchases most of its supplies from Europe 9500 products

Sourcing materials close to the supply chain to reduce transport costs.

Building its DCs closer to seaports so that it can use more of ocean transport and less of road transport.

Delivering products directly from the supplier to IKEA stores. This slashes handling costs, reduces road miles and lowers the carbon footprint.

Warehouse attached to their retail stores.

Using flat packs, packaging is designed to maximize the cube of ocean containers and domestic over-the-road trailers. This allows IKEA to ship more units at a time which has

direct impact in the reduction of their overall landed costs.

A better use of stock and warehouse space Transporting goods where possible by rail and

sea. Utilizing fuel-saving techniques that allows to

be cost-effective and environmentally friendly.

◦ Less than 1% is air freighted. The aim is to constantly increase the

proportion of goods transported by rail.

1) Supply chain.2) Planning concept. 3) Sales planning. 4) Demand planning.5) Need planning.6) Supplier capacity planning .

In order to realize the new global supply chain planning concept, it has been possible to identify four main enablers for the implementation i.e.:

1) Planning organization 2) Data quality 3)Software support 4)Project and change management

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