Analysis Of Ikea Supply Chain

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

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 the suppliers among the countries. More than 50% of the products are made from sustainable or recycled products. Ikea’s strategy is characterized by the use as few materials as possible to make the furniture, with the aim of not compromising the quality and durability of the product. Most of Ikea furniture is designed and sold in pieces for the customer to assemble. It is interesting that the pieces are placed into convenient, efficient and flat packages for low-cost transport, because they take up less room

Our goal is to achieve a comparison between these and the standards present in Ikea’s code of conduct for supplier companies, the “Ikea Way on Purchasing Home Furnishing Products (IWAY), in order to understand if effectively Ikea respect the Code of Ethics concretely or if, in the points where it differs with false declarations, there is an obvious presence of greenwashing strategy. The data of our research are based on information gathered through workers interviews.

The aim of this analysis is to cover the standards spelled out in the Code of Conduct considering the following eight labour principles provided by Ikea:

1. Employment is freely