STRATEGIC SUPPLY CHAIN MANAGEMENT AT IKEA

The company aims at offering quality and affordable product for their customers, in that IKEA produces high quality and low-price product, and makes the product readily available to all customers with the demand of the product. Supply chains is the complete process and the network of all the related activities that transform the raw materials to finished good which can satisfy the demands of the market, and the distribution of the product to the end users. Mentzer et al. IKEA is working daily to come up with strategies to increase the sales of their product. Different supply chain strategies are being implemented with a goal of increasing their sales and expand their market by reaching more end users in the market. et al. Distribution requirement planning Distribution strategies set should ensure a good flow of the product from the main company warehouse through the retail warehouse and finally to the customers in good condition.

Distribution requirement planning is done to ensure the delivery of product is more efficient by determining which product is needed, what quantity and at which geographical location is the anticipated demand of the product. Having the product at the retail warehouses helps on reducing the cost of ordering the products, transporting the products and to minimize the shortage of the products in demand (Miranda et al. Supply chain management is the management of the flow of the information, material and fund from the manufacturers down the supply chain to the customers. IKEA also are implementing the new technology, by using gas injection composite plastics in order to save material and reduce weight and faster production of product. Combining retail and warehouse processes Every IKEA retail store have warehouse with all the IKEA products where customer get a chance to choose and purchase the products of their choice from the showroom floor, here customers can purchase the furniture that fit their specifications and take home.

This strategy helps IKEA to allow self-service to the customers and this increases the customer satisfaction in that the customer get his/her own choice of the product. The main enabler for the implementation in IKEA a) Organizational infrastructure The business structure is organised in a tree order from the top-level management to the customers. The organization structure is very important in an organization for it defines the direction of the flow of the information between the levels. All the employees are fully empowered and enjoy different benefit like housing facilities, no child labor, harassment, abuse and disciplinary actions are also set clear. Distribution strategies of IKEA IKEA maintains their distribution strategic on providing quality and low-price commodities in the market so as to reach every potential customer in the market.

IKEA has a policy that maintains their manufacturing costs to a minimum level while adhering to strict guidelines for functioning, efficient distribution, quality, and impact on the environment (Lu, Clara. IKEA combines the retail and warehouse process which help the IKEA to reduce the transport cost on of the product since the product are under one roof. IKEA in-store logistics personnel help to maintain the product on stock by keeping records of the product that are out of stock every time thus, ensuring that at no time a customer can lack the product they need. Here holistic or cluster approach can be used, holistic involves reviewing the distribution network to ensure synchronization of all the part of the network, while the cluster charts and graphs of a particular distribution network are considered.

Improve the distribution strategies IKEA can improve the distribution strategies to reduce the delivery time of the ordered product to ensure the customers get the ordered product by not having to wait for long duration for delivery. Ensuring that every retail center has a warehouse, this will contribute in a large percentage increase in their sales year after year (Gunasekaran et al. Conclusion IKEA being the largest distributer of furniture product in the world have the largest supply chain where a lot of coordination is required for the effective operation of the company. For the success of IKEA effort must be done to ensure that the supply chain matches the organization structure of the company. Laurin, Francine, and Kamel Fantazy. Sustainable supply chain management: a case study at IKEA.  Transnational Corporations Review 9.

Andersson, Benny. Furniture module. Miranda, Pedro L. Reinaldo Morabito, and Deisemara Ferreira. Optimization model for a production, inventory, distribution and routing problem in small furniture companies.  TOP 26. Chopda, Viki R. McGaughey. A framework for supply chain performance measurement.  International journal of production economics87.