IKEA Supply Chain Management Case Study
These personnel are very effective in their duties, monitor and take note of deliveries and supplies in order to maintain minimal required stock which saves cost. This ensures an efficient business process and keeps customers satisfied.
3.6 The use of high and low flow warehouse facilities
According to (Lu, 2014), “IKEA’s store operations are supported by high-flow facilities (focused on the 20% of SKUs that account for 80% of the volume) and low-flow warehouses that are more manual”. IKEA uses an automatic retrieval and storage system to drive down cost-per-touch in its high-flow warehouse while products in low-flow facilities are not in high demand and operations on this level is manual since workers will not be pushing or moving inventory to take record. Lu also state that “these strategies have made IKEA the world’s most successful furniture retailer with low operating costs and high product demand. This allows the company to stay competitive in the industry as it continually seeks more advanced methods to streamline supply chain management” (Lu, 2014).
4 IKEA’S CUSTOMER
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This is a conventional business model that proposes low price for the customer and at the same time putting a lot of burden on them. It is more transparent in terms of price than when transportation cost is hidden in the product price. The display of furniture as it would appear in customers home gives a warm feeling while visiting the store. This can be different for variety of customers perhaps; one can know for that products displayed in the showrooms are available in the warehouse being in the same building and ready to be delivered. Also, provision of playgrounds in the store gives warm environment for families with kids and one can easily browse the store to find their needs and there are staffs to assist just in time of
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