You are on page 1of 7

IKEAs Global Sourcing The IKEA Challenge: vision is to Indian Rugs and create better everyday life for

Child del Haga clic para modificar el estilo de subttulo Labor the many
people. We make this possible by offering a wide range of welldesigned 4/28/12
patrn

Alejandro Lomas 283258 Armando Berlanga 285376 Diego Nava 285189 Jos Martnez 285511

The Birth and Maturing of a Global Company

Kamprad initiates when was 17 years old selling small goods, such as fountains pens, lighters 1948 he added furniture to his newsletter and stop selling small items 1951 he opened a display store to allow customer to inspect products IKEA concept: We use catalog to tempt people to visit an exhibition, which today is our store. 1953 introduced self assembled furniture (saving transport and storage costs) 1965 open big retailer in Stockholm 1963 expanded into Oslo, Norway 1973 open store in Swtizerland 1974 entered the German market 4/28/12 which soon became the largest

Developing sources principles


Swedens large furniture retailers block supplier base to IKEA. 1961 IKEA then turn to Poland suppliers and developed them showing them the know-how and in some case financing them. Ikeas vision of supplier base: Our objective is to develop long term business partners, we commit to doing all we can to keep them competitive- as long as they remain equally committed to us. We are in this for the long run We do not buy products from our suppliers. We buy unused production capacity Seek out seasonal mfg with spare offseason capacity Suppliers could do from sail makers to 4/28/12 seat cushions, from windows to tables,

The emerging Culture and Values


To create a better everyday life for the many people Selling affordable, good quality furniture to mass-market consumers around the world. Open plan office landscape, CEO did not have a separate office. Familiar and personal way all employees addressed one other. But informality often masked an intensity that derived from the organizations high seld-imposed standards. Because there is no security available behind status or closed doors, this environment actually puts pressure on people perform Waste of resources, is a mortal sin at 4/28/12 IKEA. Expensive solutions are often

The problems start up


1980 define emissions limits for formaldehyde Some IKEA products emitted more formaldehyde than allowed Sales dropped 20% in Denmark. IKEA tried to increase quality standards but suppliers were not able to meet them. IKEA then work directly with Glue suppliers, Tier 3 suppliers to fix the problem. 1992 the same problem rise with another IKEAs supplier that cost the company $7 million. Because wood being the first 4/28/12 raw material, restructured and

Child Labor

1994 Swedish documentary showed children in Pakistan working at weaving looms. Ikea dded a calause to all supply contracts stating simply that if the supplier employed children under legal working age, the contract would be cancelled. They started to monitory the suppliers by a 3rd party company. Travelled to sites and try to start up a label system that could identify the child labor avoidance. German TV program showed Ikeas supplier using child labor to produce rugs again May 1995 Barner faced a though decision: Cutting off one of major supplier of rugs (India) or opt to do nothing German TV program showed Ikeas supplier using child labor to produce 4/28/12 rugs.

Recommendations

Face the problem and solve it from the root cause. Appear in front of German TV audience and explain all the checkpoint controls they have on all of their supply chain process. Show the world the sourcing and analysis process of supplier selection. Develop a sustainable plan to prevent this to happen again but seeking the help of support of the country government to fulfill all compliances. Show the world that IKEA is a Transformative MNE willing to address social issues. Get partnerships with NGO, environmental institutions, etc to set an action plan.

4/28/12