Supply chain at IKEA:

1. Raw materials sector

- Development natural resources such as timber, agriculture, oil or minerals
- Design its own product in Sweden. Low price
- Design stage, products must meet strict requirements for function, efficient distribution,
quality, and impact on the environment
- Sources raw materials from over 1,800 suppliers in 50 countries and uses 42 trading service
offices to manage supplier relationships
- Negotiate with suppliers, check the quality of materials, analyze the environmental impacts,
and social and working conditions of suppliers
- E-Wheel to evaluate the environmental impact of its products. 4 stages within the life of
product. 1. Resources extractions 2. Production 3. Use 4. Recycling/end of life. This also
helps suppliers improve their understanding of the environmental impact of products they
are supplying
- 50% of IKEA products made from wood or wood fiber.
2. Manufacturing sector
- Design some solution to minimize raw material by using recycled plastic
- Code of conduct called IKEA Way of Purchasing Home Furnishing Products (IWAY), contains
minimum rules and guidelines that help manufactures to reduce the impact of their
activities on the environment
- Cost saving in furniture design. By using recycled materials for over 50% products, company
cuts down on transportation cost because it uses less fuel and manpower to receive
materials and ship products
- Make a good communications and relationship with materials suppliers to get a good price
- Most IKEA furniture is designed and sold in pieces for the customer to assemble. The pieces
are placed into convenient and efficient, flat packages for low-cost transport because they
take up less room in trucks, maximizing the number of products that can be shipped
- The unique packaging also take up less space in warehouse bins and reserve racks, allowing
for more room to stock additional items for order fulfillment
- Combining Retail And Warehouse Processes
- Cost per touch inventory tactic
- In store logistics
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3. Distribution sector
4. Retailer sector
5. Consumer