Analysis Of Ikea's Supply Chain

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IKEA’S SUPPLY CHAIN The analysis of the Ikea Group starts from the structure of its supply chain, which is the network between a company and its suppliers linked by continuous commercial relations, to produce and distribute a specific product. It represents the steps that the company takes to get the product or service to the customer. Supply chain management is a crucial process, because an optimized supply chain results in lower costs and a faster production cycle in fact, it identifies the sequence of operations carried out in succession, in order to transform the raw materials into a finished product. The different companies that carry out one or more of the supply chain activities can be incorporated in the vertical direction, for the…show more content…
At the beginning level, there is the development of the raw materials considering that Ikea designs its own products in Sweden and then they are largely manufactured in developing countries to keep down costs. At the design stage, Ikea checks that products meet strict requirements for function, efficient distribution and also quality and impact on the environment. Ikea has developed its distribution network worldwide. It is able to ensure timely delivery of products to retail stores all over the world by utilizing control points in the distribution cycle. It sources raw materials from 1300 suppliers, who are mostly located in low cost nations with close proximity to raw materials and distribution channels, in 50 countries and it uses 42 trading service offices across the world. It negotiates prices with the various suppliers, checking the quality of materials and analyzing the global environmental impact that occurs and also evaluate the social and working conditions of…show more content…
Referring to the Ikea’s code of conduct, where all the employees must be employed according to the laws and also there must be the presence of a written agreement with the consent of both parties, there is a clear violation of that standard. The labor contract is defined by all the following points: the name of the worker, the birth date, the level, the amount of the salary, the number of working hours and, if there are, any kind of overtime compensation and benefits. CONCLUSIONS Before concluding, we would underline two limits of our analysis we are aware of: first, considering the limited sample compared to the real number of Ikea’s suppliers, each generalization could lead to an accurate result. The second limitation is due to the data concerning the developing countries: they are based on a ten years old research; therefore, we can only make assumptions about the IKEA’s strategy evolution. Said that, there is no evidence that Ikea is doing greenwashing: it seems that the efforts put in appearing green (from the social point of view) correspond to a real work and concrete involvement in good and sustainable practices. Regarding the results from the analysis carried out in the factories located in the Far East, the most relevant issues

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