INVENTORY MANAGEMENT.
-The way IKEA manages their inventory. It’s key factor serving the price leadership
objective and has contributed significantly to IKEA's success.
- First, IKEA uses Cost per Touch Inventory System
In the supply chain, more touches equals more steps. So This system minimizes the
number of times each product is processed. This system do in in 4 ways.
First, Combining Retail And Warehouse.
Second, IKEA uses Flat packaging that helps reduce shipping costs and makes it
easier for customers to transport and assemble furniture at home.
Third, Self-service shopping allows customers to shop independently, reducing the
need for staff to handle products.
Lastly, they use an Automated warehouse to help minimize the need for manual labor.
- Ikea has its inventory in two types of warehouses: the high-flow and the low-flow.
The high-flow warehouses are operated by computer systems that automatically place
and retrieve the packages. They store around 80% of the products.
The low-flow warehouses store items that have a low demand. The operations in this type
of warehouse are done manually.
- IKEA also uses Maximum and Minimum Settings:
“minimum settings” maintain the minimum amount of products available.
maximum setting do the same for the maximum amount of a product that can be ordered at
a time.
4.2 Relationship management
SUPPLIER RELATIONSHIP
IKEA's supply chain relationship management can be classified as a combination of
contractual relationships and partnership.
- Long-term contractual relationships help IKEA reduce costs by locking in prices
and ensuring a reliable supply of products.(đảm bảo nguồn cung cấp đáng tin
cậy)
- And about partnership with suppliers: IKEA collaborates with many suppliers
that produce similar products so that they can work together and reduce
uncertainty in the quantity and quality of goods.
- You guys can see on the screen IKEA is identified as a strategic partnership in
Strategic Relationship Positioning Model,
- In keeping with IKEA's goals of sustainability and price leadership, the
company expects its suppliers to follow strict standards, so IKEA has a code of
conduct called (IWAY), it is minimum rules and guidelines that help manufacturers
reduce the impact of their activities on the environment. It also emphasizes
commitment to the "low price but not at any price" principle.
The 3 main features of the IKEA 's Supplier Relationship development
First, Developmental governance structure: IKEA wants to upgrade suppliers by
supporting different aspects such as technology or quality assurance support and expanding
production capacity
Second, Sustainable governance structure: Part of IKEA’s ambition is to find and develop
suppliers that can build up capabilities to take responsibility for production from an
initial phase to large-scale production. xây dựng năng lực chịu trách nhiệm sản xuất từ
(
khâu ban đầu đến sản xuất quy mô lớn.)
Lastly, Long term relationship: IKEA aims at developing close and long-term relationships
with suppliers that are willing to share IKEA’s values and to grow together with IKEA.
IKEA đặt mục tiêu phát triển mối quan hệ chặt chẽ và lâu dài với các nhà cung cấp sẵn sàng
chia sẻ các giá trị của IKEA và cùng phát triển với IKEA.
CUSTOMER RELATIONSHIP MANAGEMENT
- Most of IKEA's products are delivered as "flat pack" self assembly kits
This Smart designs have helped IKEA not only reduce shipping and assembly costs but also
help customers easily assemble with simple skills and tools, which makes customers feel
accomplished when complete something
- Customer Direct Transactions:
IKEA has developed a mobile app to help customers check whether products are available
and at what price. Since Ikea does not take orders, customers cannot know whether Ikea
has any items in stock.
- Social Interactions
Because of the self-service concept, customers who come to IKEA tend not to go alone,
especially women, so the opportunity for social interaction between customers will increase,
and spend more time in the store. Therefore, IKEA offers a wide variety of products, which
also makes IKEA products more personal because it appeal to many different tastes and
preferences
4.3. Forecasting management
- The planning process in SC starts with (1) corporate sales planning, which sets the
framework for the (2) tactical demand planning at distribute stage activities. The
forecasts are thereafter input to the (3) need planning process, which in turn drives
the(4) supplier capacity planning process and the planning of the distribution supply
chain (transport, warehouse, and retail-store planning).
IKEA has developed an advanced tool that can significantly improve the accuracy of its
demand forecasting. Demand Sensing: would make predictions based on statistical sales
with AI-driven forecasting. The tool can use several influencing factors, such as
shopping preferences during festivals, the influence of seasonal changes on
purchase patterns, and weather forecast, among others.