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IKEA's Supply Chain System Analysis Publish Time: 2023-07-05

IKEA is a multinational home furnishing retail company originating from Sweden. Since 2008, IKEA has become a leading global home furnishing retailer and is widely regarded as a exemplary case in the furniture industry for its supply chain management. This article will delve into IKEA's supply chain system to help readers better understand the company.

Complex Corporate Structure IKEA has a complex corporate structure, with tightly managed processes for product design, production, and sales, each overseen by different companies.

Global Procurement IKEA employs a global procurement strategy, with currently 1,220 suppliers and 31 purchasing service companies in 26 countries. Its products are sourced from various trade regions and shipped to 28 countries and regions worldwide.

Modular Design IKEA pioneered the "modular" furniture development and design method, which not only reduces research and development costs but also significantly lowers product costs.

Reduced Transportation Costs IKEA reduces transportation costs through design innovations such as flat packaging for sofas, reducing packaging specifications by 50% and annually decreasing the transportation volume of trucks by 7,477 units.

Low-price Strategy IKEA implements various procurement strategies, including global procurement models, localized development, "green" procurement, and global bidding systems, all of which lay the foundation for IKEA's low-price strategy.