Warehouse and Inventory

1
Warehouse and Inventory

2
Question 1
How does IKEA group express its solidarity with sustainability especially with warehouses?
Give examples to prove the same. Also elaborate on their adherence to IWAY standards.
Answer
IKEA Group has been one of the companies which has been utilising some of the most
effective warehouse techniques and concepts and these techniques and concepts has
provided with some fruitful results too. The foremost example of the scenario is that IKEA
Group has been utilising the Cost savings technique in furniture designs through taking up
the ingredients of the furniture manufacturing by the recycled materials. The use of recycled
products helped in reducing the cost of the company and thus the stocks of the company
proved to be helpful and productive for the company (Lin et al. 2018). The utilisation of the
standardized interface between the automation system and the Warehouse Management
System of the company has also supported the cost saving idea. The key relationship
manager and the suppliers has been the active and the most productive members of the
company who helped the company in maintaining the flow of supply and the maintenance of
the stocks (Feng et al. 2017). The IWAY standard set by IKEA for Corporate Social
Responsibility states that all of the suppliers of products and of services should meet the
minimum requirement concerning environment, working conditions, social conditions, etc.
The application and the utility of the Do It Yourself assembly technique helped the
concerned company in lowering the packaging cost and again the cost savings has been done
which helped in sustainability of the company.
Question 2
Elaborate on IKEA’s inventory management policy with reference to the three pillars of
inventory management plan.
Answer
The Inventory Management Policy applied and utilised in IKEA Group has been quite
accurate and specific to the three pillars of the inventory management theory The three
pillars of the inventory management plan has been observed to play a vital role in IKEA
Group and this could be explored further. The foremost pillar of the inventory management
plan is the stocks which needs to be maintained in sufficient and accurate amount so that the
balance of flow is maintained and no high or low inventories exist (Biswal et al. 2018).

3
Figure 1: Three Pillars of Inventory Management Plan
(Source: Lyon and Furse, 2017)
The usability of the stocks has been done by the group in an effective manner and this has
been proved through the supply chain of the KEA Group and thus the first pillar has been
strong in the concerned case. The second pillar of the plan is the Inventory management
system which the group has utilised in an efficient manner. The optimization through
utilising the intelligent system has been taken into practice in the group and the relationship
manager and the other personnel’s has helped in keeping the flow and the workings of the
inventories accurate. The utilisation of the In-store logistics has helped IKEA in the
reordering of the products which conveys that the group employs in store logistics
personnel’s who handles and manages inventories (Lyon and Furse, 2017). The third and the
last pillar is the supply chain. The supply chain has been quite simple in the concerned group
as the customers could browse for items in the main showroom and obtain the products
themselves from the floor pallet.
Question 3
Your manager asks you to reduce inventory for a certain component in IKEA by 20%. Use
the Inventory Planning pyramid to link this high-level financial instruction to reduce
inventory with the detailed implications of that reduction at an item and parameter level.
Answer