Supply Chain Management of IKEA: Sourcing Arrangements and Business Requirements

Supply Chain Management

Supply Chain Management 1
Contents
Introduction......................................................................................................................................2
Overview of IKEA.......................................................................................................................2
Supply chain management of the company.....................................................................................3
Supply Chain of IKEA products......................................................................................................4
Home Furniture............................................................................................................................5
Home appliances..........................................................................................................................6
Business requirements.....................................................................................................................7
Key sourcing arrangements of Supply chain...................................................................................8
Domestic sourcing.......................................................................................................................9
International sourcing..................................................................................................................9
Global sourcing............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

Supply Chain Management 2
Introduction
The report is prepared on supply chain management and its relative activities with the purpose to
throw light on theories, concept and tools of supply chain management. The company whose
supply chain activities are discussed is IKEA. Ikea is one of the well-known companies that deal
in the home furniture and auxiliaries. The details related to supply chain of two products or
brands of the IKEA Company with 3 business requirements of the customers/markets of
company and its alignment with business needs are discussed in the report. Along with this, it
also includes key sourcing arrangements that are present in supply chain management with its
implication.
Overview of IKEA
The company is a well-known Swedish-founded multinational group that designs and sells
ready-to-assemble furniture, kitchen, appliances, and the accessories. It is operated by Interogo
Foundation that is based in Liechtenstein and came into existence in the year 1989. The aim of
the company is to secure continuous improvement, development and expansion of the business
(Ikea, 2018). The supply chain is one of the important components of business as company
follow development and supply of the range of furniture. The effective supply chain has
contributed to make the company to establish business in 355 stores in 29 IKEA group countries
(Ikea, 2018).

Supply Chain Management 3
Supply chain management of the company
The supply chain management refers to exchange and transfer of goods and services that include
storage and management of the flow of goods and services. In simple words, it can be said that it
is movement of raw materials to work-in-progress and to the finished goods. This means that it is
transfer of goods from point of origin to point of consumption by the end-users of the company
(Christopher, 2016).
The below given image reflects the supply chain management system of IKEA company for its
most of the products. The supply chain of IKEA starts with the suppliers and ends at retail.
(Source: Jonsson, Rudberg and Holmberg, 2013)
IKEA implement some strategy for the effective supply chain management. The strategies
include cost saving in furniture design and sustainable relationship with suppliers of company.