Supply Chain Management and Sustainability

This assignment delves into the crucial topic of Sustainable Supply Chain Management. It examines the core principles of sustainability within the context of supply chains, highlighting the advantages of adopting eco-friendly practices. The assignment also analyzes the challenges businesses face in implementing sustainable supply chain strategies and provides insights into best practices for overcoming these obstacles. Furthermore, it discusses the impact of technology on sustainable supply chain management, exploring how advancements like e-marketplaces can contribute to a more environmentally responsible approach.

Supply Chain Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................5
TASK 3............................................................................................................................................8
CONCLUSION .............................................................................................................................10

INTRODUCTION
Supply chain is considered as the most dynamic aspects of systems and operations
management to create effective supply chain within the firm. Further, it often creates a good
source of considerable competitive advantage and so different businesses owe their success to
the specific use of supply chain management strategies. This particular assignment focuses on
supply chain principles in relation to IKEA. It is a multinational group of companies that designs
and sells ready to assemble furniture such as beds, chairs and desks (Mackey and Gass, 2013).
However, company owns an effective supply chain management which attracts customers to
purchase goods from the firm. Report focuses on critically analyzing the supply chain principles
work with other aspects of systems and operations management to create competitive advantage.
TASK 1
Material management is considered as an effective scientific technique which is
concerned with planning, organizing and control of flow of materials from firm's initial purchase
to the final destination. As per the view of Pickard (2012), main focus of organization is towards
material management in order to obtain right quality raw material so that best products can be
manufactured for satisfying the customers. Managing material helps in designing the movement
of material or logistics that deal with the tangible components of supply chain. In regard to
IKEA, covers the acquisition of material required to make furniture and home appliances,
quality control of purchasing and ordering such parts and also maintain certain standards
involved in ordering, shipping and warehousing the identified parts. It is essential for the cited
firm to undertake supplier evaluation which is one of the fundamental steps to evaluate the
supplier on adaptability towards one's organization (Pickard, 2012). Further, Supplier evaluation
framework is considered as a generic approach to attain objective of clients and satisfy their
needs as per Schroeder, Goldstein and Rungtusanatham (2013). Further, procurement is also
considered as an integral part of the firm's overall business strategy. Through understanding the
significance of this core business discipline, purchasing executives needs to attain lower costs,
high quality, improved safety and an enhanced reputation for their supplier agencies (Schroeder,
Goldstein and Rungtusanatham, 2013).
Moreover, IKEA procurement management function has always been a major concern for
the top management of any firm and thus possesses high inventory and an inefficient
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procurement process that affects profitability up to a great extent. According to the view point of
Stadtler (2015), there are different problems which are faced by businesses in relation to poor or
inefficient procurement process. Thus, it is essential for management of mentioned firm to plan
proper material planning and procurement processes and inventory management systems in
respect to changing business environment. However, material costs involve approximately 60%
of the total working capital of IKEA. Also, because of inefficient procurement practices it creates
a great deal of evidence of loss of productivity (Stadtler, 2015). Also, the material management
function within IKEA requires obtaining best price by involving buying the material at best value
such as-
 Right quantity and quality
 Appropriate price
 Suppliers who are reliable and provide best service
As per the view of Waters and Rinsler (2014), material planning and procurement
process, it helps in designing effective system so that it assist in reducing the cycle time of
receipt so that order can be maintained in an effective way. Further, it also reduces the lead time
i.e. time between placement of order and receiving materials. Also, establishing long term
relationship with suppliers to create a reliable vendor base and thus minimize current inventory
so that IKEA can maintain its material management system to achieve desired results (Waters
and Rinsler, 2014).
Wisner, Tan and Leong (2015), examined that IKEA possess an amazing consumers base
with its affordable, high quality furniture and yet it is successful global home furnishing retailer
that impresses and assists the cited firm to develop its operations around the globe and maintain
effective material management system. In order to maintain material cost low, IKEA uses
distinct product design and thus provide the best quality goods to customers to satisfy their
needs. Main aim of the firm is to keep the prices low and thus maintain control over
manufacturing costs. IKEA also focuses on something unique that concerns its logistical
management of reordering products. Therefore, company possess in-store logistics personnel
handling inventory management so that material can be managed appropriately to attain desired
satisfaction (Wisner, Tan and Leong, 2015).
It can be assessed that IKEA's innovative inventory management helps in providing the
best solutions which relies upon two basic factors such as cost per touch aspects and in store
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logistics management (Hrelja, Isaksson and Richardson, 2012). However, the cost per touch and
the in-store logistics management aspects comprises of following features such as-
 IKEA designs its products using few materials and packaging.
 Cutting down transportation costs by using packaging boxes.
 Company provides option of do-it-yourself or assembling by the customers.
 It provides high flow facilities are automated for inventory storage and retrieval.
However, all such stages helps in providing IKEA the world's most successful furniture
retailer that possess low operating costs and high product demand in the market. Hence, it is
essential for the organization to manage its materials appropriately as well as develop effective
supply chain structure so that success can be attained in an effective way. According to the view
point of Khan, Christopher and Burnes (2008), it allows company to stay competitive against
other retailers in the industry as it continually seeks more innovative techniques to streamline
supply chain management. However, it may be hard for other rivals to cope with the success
IKEA has with stock management and order fulfilment. It is essential for supply chain strategies
to push against boundaries and inspire companies to develop their own inventory strategies so
that best operations can be carried out to attain success. Further, there are different companies
that will move away from traditional supply chain management strategies to generate and seek
better solutions so that they can handle inventory which lowers down manufacturing and
operational costs to increase product demand (Khan, Christopher and Burnes, 2008).
As per the Molino (2013), material handling helps IKEA to announce that it will phase
out wooden pallets on a global basis. However, wood will be replaced with a shipping platform
so that best results can be attained. Main objective to bring such change is to decrease the costs
and create a more sustainable business through having less impact on the environment. Further, it
involves a number of sourcing principles that enables IKEA to stay competitive in the interface
with tis suppliers. Therefore an effective sourcing strategy is the ownership of product rights that
allows IKEA to switch suppliers when necessary (Molino, 2013). Additionally, IKEA seems to
concentrate upon as a few suppliers and also obtain few supply markets as possible. It selectivity
means that IKEA is effective in order to balance its market choices that concentrate its sourcing
activities in order to maintain geographic areas through committing to and investing in certain
markets when deciding to move into foreign markets.
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IKEA's supply chain organization structure involves different suppliers that provides raw
materials, components and other services that helps firm to manufacture and distribute its
products to intermediate as well as end users. Also, supply chain possess different business
structures that reflects the business relationship or degree of collaboration among companies.
However, such structure ranges develops informal relationship in which enterprises make
occasional purchases from the diverse group of suppliers and develop joint ventures or integrated
supply chain where there is a high degree of collaboration and dependency in order to attain
desired success (Porter, 2008).
 Basic structure- As per the view of Singh, Singh and Bhardwaj (2011), within a basic
supply chain, it helps firm to lead company and forms a series of relationships with
companies that purchases and sell supplies from each other. IKEA issues and processes
purchase orders on demand from consumers. Hence, it is essential for them to have
access to suppliers which might face problems caused by fluctuations in supply capacity,
delivery, reliability etc (Singh, Singh and Bhardwaj, 2011).
 Collaboration- Further, in regard to improve the supply chain efficiency, it helps
company to agree upon different facts so that they can enhance collaboration. Therefore,
it does not change the business structure and buying and selling is carried out as per
Storey, Emberson and Reade (2005). Hence, it assists in creating formal relationships.
Organization's members agree to share production and demand data over a secure
network so that every firm can plan its operations more efficiently and also minimizes the
risk of supply fluctuations. Also, members helps in deciding to harmonize their quality
standards in order to make sure that consistency should be maintained as well as
minimize the waste throughout the supply chain (Storey, Emberson and Reade, 2005).
 Partnership- Moreover, as collaboration increases, supply chain members may form an
business structure based upon long term partnerships in order to stabilize the supply
arrangements. It also assists in replacing ad hoc purchase orders in order to obtain long
term supply contracts and also collaborate on cost reduction programs. As per the opinion
of Tang (2011), long term contracts make sure that continuity of supply helps in leading
the enterprise as well as provide greater stability for other members so that best supply
chain process can be developed in order to achieve success (Tang, 2011).
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 Integration- IKEA depends upon certain members of the supply chain for essential
supplies such as different components like scarce raw materials etc. It helps firm to
supply the most crucial products or services and operate in an effective way in order to
bring quality arrangements (Vachon and Klassen, 2008).
Moreover, it can be assessed that IKEA's material management helps in producing best
quality raw material to customers so that they can attain competitive edge over its rivals.
Business faces varied challenges standing in the way of turning different strategies into a source
of competitive advantage (Purvis, Naim and Towill, 2013). Hence, it helps business to set a
proper mindset so that capabilities can be attained in order to overcome such problems and gain
competitive advantage.
TASK 2
It can be stated that IKEA possess effective significant relationship within material
management and logistics and thus it helps firm to develop the best relationship with each other
in order to form desired success. Hence, it is significant for business to carry out its operations in
an efficient manner so that availability of raw material can be there in the right quantity and
quality. It also assists in determining a reasonable extent to which, the best output can be
generated so that success can be attained efficiently (Sarkis, 2012). As per the view of Preuss
(2009), it is essential for firm to obtain the best resources so that success can be attained in an
effective and thus set goals can be attained efficiently. Material and logistics moves altogether in
order to provide the best resources so that it determines best planning decisions so that balances
policies can be developed in order to manage the resources. Also, material management being
the coordination of efforts i.e. planning, controlling, organising and directing which helps
towards improving efficiency (Preuss, 2009).
Also, it is significant for business to develop effective inventory that involves managing
material as well as logistics so that success can be attained in an effective way. Moreover, it is
also essential for IKEA to develop effective inventory management so that it can develop
especially competitive environment in order to bring desired success. According to the view
point of Seuring and Müller (2008), inventory control is the effective science which is based
upon the art of controlling the amount of stock so that movement of raw material within the firm
helps in converting raw material into finished stock in appropriate time and deliver it to the end
users. Also, inventory management basically focuses upon providing both internal and external
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customers in regard to deliver the products in appropriate quality so that IKEA can overcome or
avoid overstocking in order to keep the cost to a minimum level. Also, it is essential for
enterprise to develop effective availability of computer systems at reasonable prices so that best
results can be attained in an effective way (Seuring and Müller, 2008). Also, it is crucial for
business to make effective inventory decision making so that it helps in integrated into computer
based inventory systems and thus make effective relationship among material management and
logistics.
Furthermore, modern inventory management systems assists in challenging and obtain
different variables so that different factors such as raw material management and logistics assists
in enhancing the number of suppliers entering into procurement market and rapid development
of micro-processes in order to make effective decision making (So, Parker and Xu, 2012). Also,
it is essential for IKEA to support innovative technology development in order to adopt smart
materials replacing costly materials and thus add to the challenges for IKEA. As per the opinion
of Carter and Liane Easton (2011), IKEA needs to create effective approach in order to maintain
effective relationship among material management and logistics so that best results can be
attained. Through enhancing the management of firm is required to develop appropriate
materials' management and logistics so that best relationship can be developed among employees
and purchasers in order to obtain effective logistics system (Carter and Liane Easton, 2011).
According to the view point of Colicchia and Strozzi (2012), it is also essential for IKEA
to develop effective contractual arrangements and other informal agreements so that best
relationship can be developed in relation to maintain efficiency in market. Also, it is considered
as effective relationship among material management and logistics in relation to obtain the best
contractual development and thus build informal agreements so that success can be formed in
relation to attain specific goals (Colicchia and Strozzi, 2012). However, Geerts (2011), argued
that it is essential for enterprise to obtain effective relationship among supply chain management
and logistics so that best results can be attained effectively and efficiently. Moreover, it is
concerned particularly with the supplier development and building collaborative supply
relationships so that desired success can be attained. Procurement is considered as the best
method through which all the activities are associated with acquiring and managing the IKEA's
supply inputs. Also, it is essential for firm to obtain innovative method of procurement in
relation to make collaborative and aggressive approach to supplier management (Geerts, 2011).
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As per the view of Hunt and Davis (2012), purchasing and inventory control involves the
key elements which helps in developing efficient material management so that best decisions can
be obtained in order to attain best solutions. Company is also required to develop the provision
of safety stock in relation to maintain the stock insurance and thus largely influenced by the lead
time in order to procure the materials. Hence, it is obvious that firm needs to improve the lead
time so that safety stock can be minimized and also reduces the overall lock up inventory.
Furthermore, crucial system in maintaining effective material management and logistics so that
success can be obtained in an efficient manner (Hunt and Davis, 2012). It also implies that all the
related operations needs to be developed in order to accomplish the goals in appropriate time and
control. Also, an integrated material management system involves electronic data processing so
that best value can be delivered to consumers in order to attain satisfaction. Business is also
required to develop effective contractual arrangements and other informal agreements which
helps in identifying the best relationship among each other so that success can be attained
effectively and efficiently. Contractual agreements are written as mutual agreements which are
enforceable by law among two or more parties that something shall be done by one or both of
them. Further, there are two major classes of contract that helps government to use in the
management and administration within business. Hence, such arrangements are required to
develop effective relationship among different parties and also interact with them in order to
attain success (Sarkis, Zhu and Lai, 2011).
Therefore, it is essential for business to develop effective role in order to build
relationship in the IKEA's approach to materials management and logistics so that best
relationship can be maintained in order to improve desired success. Further, firm is required to
build effective contractual arrangements and other informal agreements in relation to make
contract among two parties so that success can be attained in an effective way. Also, developing
effective relationship assists in maintaining effective business approach so that best relationship
can be developed among material management and logistics. They both move simultaneously in
order to bring best results (Seuring, 2013).
Furthermore, it is significant for firm to develop relationship among material
management and logistics so that agreement can be formed among each other. Also, it is
essential for organization to obtain specific arrangement in relation to make optimum utilization
of resources and thus attain desired targets. Further, developing contractual agreements and other
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informal agreements requires maintaining efficient relationship among each other and bring
desired goals and targets. It also possesses crucial relationship in the business approach to
material management and logistics so that best arrangement can be made as well as satisfy the
requirements of clients (Short and et. al., 2012). Both these perspectives are interconnected with
supply chain management and thus build effective relationship so that success can be attained
effectively and efficiently. Procurement perspective is broader that helps in carrying out the best
relationship in regard to enlighten the activities enlightened and overcome the issues effectively
and efficiently (Colicchia and Strozzi, 2012).
TASK 3
As per the opinion of Fawcett, Ellram and Ogden (2014), emerging requirements for
technology in relation to supply chain is the best process that helps firm to obtain specific targets
so that different threats can be overcome. It also assists in attaining competitive edge over rivals
and thus bring possible results in an effective way. Effective procurement policies assists in
maintaining effective concern over the issue so that expansion of knowledge and skills can be
attained through using effective technology and obtain desired outputs. Also, new supply chain
technology helps in building power up existing operations and enhance the revenue in order to
implement the results correctly so that best results can be obtained (Fawcett, Ellram and Ogden,
2014). Using integrated effective technology helps in developing existing operations and assists
individual to enhance customer service, reduce costs and streamline supply chains. Also,
adopting effective technology assists in applying information technology so that it can be used
appropriately in relation to manage the sources and thus maintain record of inventory with the
help of effective inventory management software tools. Another effective method is used in
relation to plan proper material planning and system development requires appropriate
technology so that supply chain can be carried out in an effective way. Hence, it is crucial for
firm to obtain effective technology in relation to maintain the record of inventory and thus utilize
the best resources so that success can be attained efficiently (Eng, 2004).
According to the view point of Graham (2000), technology is considered as the most
valuable resource that helps business to have access to lead technologies in order to remain
competitive and especially undertake effective resources so that best results can be attained. It
helps IKEA to maintain the record of inventory in an effective way and thus manage the
resources properly. Technology plays a crucial role in order to allow the business to develop
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effective results. It also requires effective and innovative technology that recognises attractive
investment opportunities so that best results can be attained. Implementing such technology
helps in improving the management of raw materials and other inventory so that it can be
identified at any level of time (Graham, 2000).
Business also forecast new and innovative technology for a different number of reasons
so that they can contribute towards new product development as well as developing the improved
manufacturing process. It is also required to make sure that firm remains competitive in order to
gain benefit from developing innovative process and thus contribute towards adopting
technology adaptation so that effective relationship can be maintained. For instance, within
IKEA, management is required to adopt innovative technology and thus make sure that best
resources can be obtained in an effective way. Hence, it is significant for firm to reduce the
environmental operations involving different technological changes so that success can be
attained in an effective way (Hrelja, Isaksson and Richardson, 2012).
As per the view of Singh, Singh and Bhardwaj (2011), contributing to the new product
development it helps firm to undertake effective technology so that best results can be attained in
an efficient way. Involving different updated technology it helps IKEA to improve its process so
that best benefits can be obtained in order to improve the security system within firm. Hence, it
is essential for enterprise to adopt effective technical improvements so that desired outcomes can
be attained and improve the products or services effectively and efficiently. Requirements of
emerging technology helps in developing the management of inventory so that success can be
attained (Singh, Singh and Bhardwaj, 2011). Hence, it is essential for enterprise to adopt
effective approach so that current use of forecasted technologies assists in building future
technology so that issues can be overcome.
Business can also use Delphi technique in relation to develop effective structured
forecasting tool so that it assists in capturing the views and opinions of experts and thus seeks
relationship with each other. Also, developing effective technology helps in improving supply
chain so that best results can be attained. Innovative technology also assists in planning effective
improvement in materials planning which can be best used with the help of innovative or
updated technology so that systems' development can be attained in an effective way (Wisner,
Tan and Leong, 2015). Hence, it is essential for enterprise to use emerging technology in relation
to obtain desired success. Information technology needs to be used within firm so that best
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results can be obtained. Through using different technology such as computer systems etc. helps
in planning appropriate results so that success can bee obtained effectively and efficiently.
Hence, it is essential for business to obtain specific results so that operations can be attained in
an effective way (Vachon and Klassen, 2008).
There are different key drivers required in relation to emerging technology in relation to
IKEA' supply chain and thus develop appropriate planning so that best relationship can be
developed in an effective way. It involves different factors that needs to be considered in relation
to apply information technology, materials planning and systems development so that best results
can be obtained effectively and efficiently (Seuring and Müller, 2008). All these methods helps
in effective relationship so that proper planning and development can be attained. Moreover, it is
significant for company to achieve desired success and thus obtain best results so that success
can be attained in an effective way. Emerging technologies assists in adopting the best resources
so that materials planning can be done in an effective and efficient manner. Hence, it is crucial
for enterprise to adopt the best resources (So, Parker and Xu, 2012).
It is also significant for enterprise to adopt effective practices so that best relationship can
be developed in order to bring positive results and thus attain desired results. Using information
technology, materials planning and system development assists in improving the organization's
success in relation to obtain desired outcomes (Colicchia and Strozzi, 2012). Also, it is crucial
for enterprise to adopt effective technology so that best practices can be carried out in order to
bring desired output in an effective manner (Carter and Liane Easton, 2011). Hence, it is crucial
for IKEA to adopt innovative technology so that best material management as well as system
development can be attained so that growth and success can be attained.
CONCLUSION
From the above report it can be articulate that supply chain management is the best
process that provides in-depth knowledge regarding managing material and supplying raw
material to firm in order to develop quality products for clients. It is essential for each and every
business enterprise to adopt effective material management procedure so that quality raw
material can be delivered to consumers in order to enhance satisfaction. Further, developing
proper supply chain structure assists in identifying the intermediaries involved in the supply
chain process of IKEA and thus it helps in delivering the raw material conveniently to clients.
Moreover, company also possess an integrated relationship between its material management and
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logistics department so that quality products can reach timely to the end users. Also, here IKEA
requires formulating different contractual agreements and treaties so that best action can be taken
in relation to attain desired success. At the end, company is required to adopt innovative
technology so that best supply chain practices can be carried out.
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