Procurement and Supply Chain Analysis for IKEA

This report examines the procurement and supply chain strategies of IKEA, a renowned furniture company. It analyzes the company's supply chain process, operations, information management, integration, and sustainability efforts. The report also discusses the company's goals and suggests improvement programs to enhance efficiency and customer satisfaction.

Running head: SUPPLY CHAIN FOR IKEA
Mapping and Analysing
Procurement and Supply chain for IKEA
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SUPPLY CHAIN FOR IKEA
Executive summary
This report will be dealing with the procurement and supply chain for IKEA whose
tremendous efforts and qualified services at low cost made it one of the leading companies in
furniture around the world. IKEA is a top-rated business organization, which deals with home
furnishing products. The approach will be to analyze the Supply Chain strategies adopted by the
company and identify the best strategies that are necessary for the business operations of IKEA.
Different models and theories will be used for analyzing the supply chain strategies, and the
suitable options will be introduced for the company. Dynamic alignment model will be used for
the successful identification of the best strategy best-suiting the business operation of the
company.
Vision, mission and strategic goals of the company
The IKEA retailing was started with the concept of the woods of Southern Sweden, and
the company is operating from the last 70 years. The company claims the company has grown
due to the contribution and the experience gained in these years and still improving. The
company has adopted a vision of creating a better everyday life for the different individuals and
the customers who are connected with the company (IKEA 2019). This vision is shared among
all the stakeholders, and the contribution is made by each of the IKEA co-worker, trademarks,
and the retailers.
Findings of supply analysis
The IKEA works as a group for managing the IKEA concept around the world and has
the franchise in around the world. The company deals with the selling and designing of the
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"ready to assemble furniture" and has been operating a very long supply chain across the globe.
The operations of the supply chain include the following products:
 Bookcase ranges
 Furniture appliance
 Curtain accessories
 Bathrooms articles
 Children items
 Home accessories
 Upholstered furniture
 Kitchen articles
It has been identified that the traditional approach adopted by the company must
coordinate between inside and outside the company for the development of the chain within all
functions of the supply. There has been the consideration of the non-core competency functions
while collaborating with the partners. The company has adopted the boost best strategy for
maintaining the relationship between the customers and effective collaboration with the partners,
including the members of the IKEA company (Laurin and Fantazy 2017). The suggestion can be
made to adopt supply chain management, considering the demands realized from the side of the
customers.
The supply chain process of IKEA is established based on two ideas, which are as:
Firstly, the company operates into different approaches for meeting the supply and managing the
supply chain firstly, the product introduced to the market is based on the demand of the market
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(Yu et al. 2016). Secondly, the linkage between the products has been established considering
the long-term process that is being maintained within the company.
Findings of operations analysis
Operation management system approaches have been applied health integral part of the
system of IKEA company. The different methods being introduced in the existing system of the
company include corresponding flow waste elimination and full philosophy that focuses on
delivering the daily operations of the company as it is being planned. IKEA also consists of a
portable motion (Stadtler 2015). Define string and operating of Idea company can be described
using the following model:
Figure 1: Process Map of IKEA
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(Source: Mahmood 2018)
The success of the company can only be determined through smooth and efficient
management of the operations. The employees have been guided to manage the fluid shopping
experience for the customers where the customers are you allowed to go through the showrooms
and check for the products whatever they want and what is available in the store, the customers
are introduced with code for the selected item and retrieve the product later using the same
system. Assistance is also provided on the store for allowing the customers to lift or carry heavy
objects (Yu et al. 2017). The process map defines the entire operations of the company and
analyzing the whole operation process it can be observed that there are two significant delays in
the point of sale including the duration when the customer has to retry the item and go to the
checkout. Another setback is they have to wait in a queue and move throughout the store while
looking for the product of their need.
Findings of information analysis
The company is growing and expanding worldwide in an exponential manner managing
the extended requirements of the customers is getting Complex for the company. IKEA modified
its existing system into an advanced system by using the information technology and the digital
Technologies for boosting the productivity and management of the operations (Mangan,
Lalwanui and Lalwani 2016). IKEA has updated the digital technology for enabling the business
and established a centralized management system That helped the company in managing the
complex operation in a less expensive and much easier way in addition to the boosting of Service
Delivery and elimination of the manual labor as much possible. Digitally transformed IKEA
company is capable of managing the information and data related to daily operations in a much
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easier way and allowing the supervisors to have an overall insight over the entire functioning and
operating of the business.
Digitally transformed IKEA company is capable of managing the information and data
related to daily operations in a much easier way and allowing the supervisors to have an overall
insight over the entire functioning and operating of the business (Jia, Gong and Brown 2018).
The company has been managing the warehouse logistics, warehouse management, customer
relationship, supply chain, and many other daily operations using information technologies.
Information management has enabled the company in considering the aspects of the customers
and introducing the product best as per the need of the users and gain command over the
Industry.
Findings of integration analysis
The existing supply chain model of IKEA Is capable enough for managing daily
operation and supplies of the customers. However, considering the long run on the future aspect
of the customer demands, it can be observed that the company needs a little modification in their
existing supply chain integration for managing the proper functioning and operating of the
company. The reward structure is adopted by the company for gaining the sustainable
competitive advantage is supporting the company in managing daily delivery of the operations
(Hilletofth, Reitsma and Eriksson 2018). The structure of the company is always crucial for the
deployment of the supply chain management, and hence, IKEA must consider the alignment
between the structure of the company and the deployment of supply chain management
strategies. IKEA has a very large number of franchise companies and many partners around the
world that makes the supply chain complex. Despite giving preferences to the employees and the
staffs operating in the company, the flat structure of the company is not allowing the efficient
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outcome (Ayers and Odegaard 2017). The suggestions can be made for aligning the different
supply chain Strategies for the various small companies, and the franchises for integrating into a
single supply chain for the different products and productions can be highly effective and
efficient in improving the productivity and revenue of the company.
John Gattorna Introduced a new dynamic element strategy for the management of the
supply chain that can be applied for improving the existing integration of the supply chain within
the company. The company is growing and expanding worldwide in an exponential manner
managing the extended requirements of the customers is getting complex for the company
(Khalid et al. 2015). It can contribute in developing the best strategies that could be applied
among the various small supply chains in different sectors of the company to align with each
other to be a bigger supply chain for managing the supply of the IKEA.
Findings of sustainability analysis
The vision of the company is to introduce and provide the best services to the consumers
and contribute to the daily delivery and management of the products and services. The company
has adopted a set of the practices for the management of the inbound strategies best suiting the
functioning of the company and the different franchises that are attached to the company. The
outbound operations are also considerable for the IKEA as it considers a set of the strategies
those could allow the management of the outbound deliverables and improve the functioning
while managing the logistics, marketing, and packaging innovation. It can be represented as the
model company that can be an inspiration of change for the other companies or could contribute
in inspiring the others as being the giant company in the world makes them responsible in
contributing for the environmental consideration. The sustainable approaches being adopted by
the company be effective and efficient in managing the sustainability across the entire supply
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chain management assuring that the operations being delivered does not harm the environment.
The sustainable efforts being driven can undoubtedly impact economic erosion and thus,
contribute to the overall competitive advantage of the company. The academic research supports
and other approaches can be highly effective and efficient in a sustainable model that can meet
the environmental needs and manage the deliverables for the company accordingly.
Discussion of the company's procurement and supply chain analysis
The goal of the company is to meet the vision of the company through being a better
listener to the retailers, sharing of better ideas, and providing the best solutions as the IKEA
product range. The following alignment model can be used for analyzing the supply chain
management strategy adopted by the IKEA, and the procurement analysis can also be preferred
as useful.
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Figure 1: Dynamic Alignment Model
(Source: Gattorna 2017)
The new thinking or the innovation within the supply chain management has always been linked
with the concept of the integration and John Gattorna introduces the analysis over the supply
chain dynamic alignment and introduces the facts related to the adoption of this strategy for
managing the business operations. The above figure explains the different sectors of the
operating of the company and how the companies can adopt it as the configuration for managing
the daily operations. The different levels of management need a different level of alignment that
is necessary for integrating a successful supply chain (Saberi et al. 2019). It also introduces
innovation through allowing the company in developing a string of the small supply chains while
the organization is operating broadly and later on integrate them within a small group that can
manage the entire supply chain. The IKEA has a flat company structure and thus, it needs to
consider the alignment between the company structure and the supply chain strategies in a
manner to make sure that the established structure functions properly and meets the needs and
requirements of the end consumers.
The company is strategically focused towards listening and understanding the customers
feedback more aggressively and wherever there is any escalation regarding the product the
quality of the product the company consider it as a serious matter and deploy the changes
accordingly. Resulted positively for the company introducing the best approaches in short
interval of time and saving many others would be applied in different sectors of the business
operations for IKEA.IKEA modified its existing system into an advanced system by using the
information technology and the digital technologies for boosting the productivity and
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management of the operations (Gorgan and Morris 2016). It has updated the digital technology
for enabling the business and established a centralized management system that helped the
company in managing the complex operation in a less expensive and much easier way in
addition to the boosting of service delivery and elimination of the manual labor as much
possible.
The IKEA can establish the strategies from the present to the future assuring that the
strategies being deployed meets the needs of the final consumers and the products being
introduced is same as that is required by those customers. Deployed supply chain strategy
allowed the company to build stock while considering the customers as an online segment, and
products are introduced considering the small configuration for the market those have different
production sizes. The production strategy of the company is smooth, leading to an efficient cost
cut and the availability of enough stock to supply the products throughout the world market.
Improvement Programs Discussion
The primary modification required can be related to the supply chain management
strategy that is adopted by the company in managing the daily operations. The existing system is
capable of meeting the organizational needs, and the customers need; however, considering the
improvement in the overall output and the proper satisfying the customers, the company needs to
adopt some innovative ways. The above paper introduced the process map that clearly defines
that there are time lag and other shortages in the existing supply chain that needs to be mitigated.
The consideration of the entire business structure and functioning of the company while
managing the daily operations and meeting the supplies of the products (Zsidisin et al. 2015).
Moreover, the company needs to improve the information strategy by adopting the latest and
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advanced technologies. The most applicable technology nowadays is cloud computing and
software as a service based on cloud computing.
IKEA must look forward to the implementation of the ERP that can manage the different
management sectors of the company, including the supply chain, customer relationship, allowing
staffs to operate effectively, and many more. The company can alternatively fasten the service
deliveries, and thus, cost-saving factors can also be embraced, allowing the company to provide
the products at a lower cost. These improvement programs can be highly effective and efficient
in meeting the increased demands of the customers and managing the complexities of the supply
chain. The strategies can alternatively contribute to the better revenues and outcomes for IKEA.
Improvement Programs Assisting Company
The improvement programs focus on the replacement of the existing ways of the
operations delivery to a transformed way, considering the adoption of the best strategy that best
suits the operating and functioning of the IKEA company. The approaches could be made for
transforming the service deliveries ways and allowing them to manage the deliverables. The
primary step must acknowledge the contribution to each of the small or large companies to
contribute to the innovation and adoption of the research and development aspects that could
alternatively improve the supply chain management. The adoption of the dynamic alignment
model must be considered for meeting the current increased demand and managing the future
extended services. The approach could allow the company to manage the deliverables in much
innovative way and providing the owners to have great insight over entire functioning and
operating in a much efficient way.
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The strategic goal of the company is to listen to the customers and provide the products
and services as per the needs and requirements of the customers (Gattorna 2016). The mentioned
strategies directly focused over meeting these aspects and hence, allowing the customers in
getting better services and products. The integration of technology can alternatively improve
customer engagement and organizational development in all ways. Thus, IKEA will be able to be
more strategically focused towards the requirements of the end consumers and will be successful
in delivering the services accordingly. The strategies can contribute to achieving the company's
vision of providing the best services and products.
Conclusion
The analysis represented in the above paper concludes that the company is genuinely
transforming and evolving with the passage of the time as many modifications can be seen while
comparing with the traditional approaches of IKEA. The above paper introduces the application
of the process mapping and the supply chain dynamic alignment for the analysis of the supply
chain management strategies adopted by the IKEA. Adopted strategies are highly effective for
the employees, customers and the partners of the company, however, the customer's demands are
changing with the time, and they need to be met through introducing improved supply chain.
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