You are on page 1of 16

Hidayat Heydarov

Martin Wichmann
10000 products by 1600 suppliers at
186 Stores(Supply Facing
27 warehouses
31 distribution houses (Demand
facing warehouse)
Aim of IKEA:
a global distribution network
large volumes
flat packages
low costs

Both Anticipatory & Responsive
Business Model

Outsourcing 90% of production
Low-Cost Structure
Better Economies of Scale
Focus on Core Business
IKEA is Multi-National Company
Domestic Marketing and Delivery
Strategic Distribution points
Global Sourcing
From countries with low wage
Many sources through domestic
suppliers in low-cost countries
Facilitation of sales in the
international sourcing country
The supply chain is mainly make-to-stock and only a
few products are made to customer orders.
SC is heavily dependent on forecasts.
Stores have local freedom in terms of planning and
placing replenishment requests. This led to
fragmented supply chain planning with local
optimisation and a lot of manual intervention with
plans throughout the supply chain.
Due to frequent shortage situations, some regions
purposely overestimated demand to ensure delivery,
which in turn has led to imbalance in terms of
demand coverage. Hence, some markets have suffered
from stock-outs during long periods, whereas other
markets have ended up with obsolete inventories.
For Procurement they have: Alternative Strategies of
procurement: Buyer Involvement and Consolidation of

Do-It-Yourself Assembly Lowers
Packaging Costs

Quick Response (QR)

Vendor-Managed Inventory (VMI)


In-store logistics personnel
IKEA Stores= Warehouses
Economic Benefits of Warehouses:

Service Benefits:
Spot-Stocking in strategic markets.

For handling they use:

Corporate Management making
Sales Forecast
Front-end&Back-end chain
Efficient Supply Chain
Applying Six Sigma
Lean Operations
We offer the lowest price,
ease of shopping, the ability to
take your furniture home the
same day and last, but not
least helpful, friendly and
knowledgeable co-workers
when you need help

Tests During Development Stage

Third-Party accredited test lab

Certified Products from Supplier
renewable electricity supplies
promote Forest Stewardship
Council (FSC)
IKEA Foundation supports
programs that improve the lives
of children in need through
health, human rights and