Logistics And Supply Chain Management of IKEA

Running Head: MANAGEMENT 0
MANAGING STRATEGIC
RESOURCES AND
OPERATIONS

MANAGEMENT 1
Table of Contents
Overview of Ikea........................................................................................................................2
Logistics and Supply Chain management..................................................................................2
Linkage between the activities of company and theory.............................................................4
Strategic tangible assets of the firm.......................................................................................4
Sustainability throughout the value chain..............................................................................4
Conclusion..................................................................................................................................8
References..................................................................................................................................9

MANAGEMENT 2
Overview of Ikea
In 1943, IKEA started to design and sells ready-to-assemble furniture and currently,
the company has its presence in more than 25 nations with having 276 stores. In relation with
company 2019 revenue, it stands out nearly, 41.3 billion euros (statista.com, 2019).
Considering Ikea operation strategy, the organisation constantly offering products developed
as good design and functions with greater quality and durability relying upon other factors
too including cost, quality, speed and dependability. IKEA vision is to make a better daily life
for the various individuals – for customers, co-workers and suppliers.
In relation with company culture, a unique clusters of values have been established
from its roots in Sweden and keeping a robust IKEA culture is one of the greatest significant
aspects behind the endless accomplishment of the IKEA model where their aim is to make a
better daily life for the various individuals with presenting an wide range of well-made home
furnishing produces at less prices (ikea.com, 2019). This report outlines company supply
chain and logistics management activities and its sustainability throughout the value chain. It
also discusses strategic tangible assests of the firm that IKEA managed to gain over its long-
term operations.
Logistics and Supply Chain management
Logistics management and supply chain of IKEA is very strong and popular where
the company impresses not just its consumers with rational and superior value furniture,
however also rivals and businesses round the globe – specifically with its exceptional supply
chain and inventory management procedures. Every IKEA provision is big enough to hold
more than 9,500 products and the business also employs in-store logistics employees to
manage inventory management at its stores (ikea.com, 2018). As per ARC Advisory Group,
there is an in-store logistics supervisor accountable for the procedure of ordering and a store
goods manager accountable for material management logistics at all provisions of the
company.
The supply chain at IKEA has a global spread that has led to growing purchasing and
sales in all the main areas of the globe. More specifically, the supply chain activities of IKEA
extents to sourcing of raw materials to supplying the finished goods to the ultimate
customers. IKEA only hold the part of the production capacity in its supply chain, explicitly

MANAGEMENT 3
IKEA sector, which is the leading manufacturer of wooden furniture in the globe and its
stores, which are divided into three geographical regions, are supplied through 28 distribution
centres and by some 1000 suppliers in 40 nations (ikea.com, 2018a). Furthermore, more than
half of the sales volume is distributed straightly from suppliers to stores. To some extent, the
supply chain of the company is vertically integrated and the whole supply chain highly relies
on projections.
Value chain of Ikea starts at the very understanding and design of the product itself
and the company tops at developing products that stays upon low cost of production while
fulfilling firm necessities for quality, function and capable delivery. To manage more
efficiency in cost, the company pursues to use as few materials as likely to develop the
furniture deprived of forgoing quality considering packaging, handling and transport area
(inter.ikea.com, 2019). In addition, this conscious design practices and ready to pull together
product are then offered to consumer in flat-packed procedure which ultimately leads to
decrease in storing, shipping and assembling cost. IKEA operation strategy can be identified
effectively in the below diagram –
Quality  Meeting of
specificatio
ns
 Auxiliary
services
Speed  Exclusive
layout of store
 Mechanization
Dependability  Spoke and
Hub Context
so as to make
sure of
product
availability
Flexibility  Global
sourcing to
amend
changes in
volume
 Match and
Mix to
receive
great
differences
in offerings
Cost  Constricted
inventory
Capacity Supply Network Technology and
Performance Objectives