Global Logistics: Ikea’s global supply chain model

Type :

Presentation

Pages :

17 pages

Format :

.doc

Published date :

01/15/2009

Category :

Business & market

Sub category :

Logistics

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Summary :

Executive summary.
Product characterstics and its impact on a global logistics model.
1. Customer needs and requirements.
2. Value proposition.
3. Supply chain strategy.
4. Product and service factors.
IKEA's Global Logistics analysis.
1. Traditional furniture business.
2. IKEA: Company background.
3. IKEA's business model.
4. IKEA's global supply chain model.
Improvements for IKEA's global logistics model.
1. Short term improvements.
2. Improving performance of a global supply chain: Long term perspective.

Abstract

The decisions regarding the supply chain design highly depends of the kind of products or services a company is dealing with. Issues such as the sourcing location or the distribution method will be affected by a whole range of requirements given by the nature of the products. In the first part of the study, we developed the following criteria to be considered in order to design the supply chain: customer needs and requirements, value proposition, supply chain strategy, product and service factors (that includes demand and production factors, product composition and external environment). The following pages are proposing a case study of the ikea's global supply chain design. We first explained the process of the traditional furniture industry, a relatively labor-intense industry. As ikea started operated, it proposed a dramatically different approach, based on a low-cost strategy. Therefore, the requirements for the supply chain became different from a traditional furniture company. ikea's revolutionary strategy resulted in significant differences in the trades-off to be done regarding the supply chain. The suppliers' location, the inventory level, the supplier relationship, the issue of localization, the in-store services and the store ownership structure were area in which ikea decided to act differently.