Supply Chain Planning In Ikea

COLLABORATIVE PLANNING FORECASTING AND REPLENISHMENT (CFPR): It provides a comprehensive approach to the management of the supply chain. It takes into account several trading partners for planning and achieving the target of fulfilling customer demand. CPFR deals with

 sales

 supply chain planning

 reducing inventory

 merchandizing

 transportation

 logistics cost

The problems IKEA faces regarding poor demand planning, increasing cost, distorted information across all supply chain partners can be solved with the implementation of collaborative planning forecasting and replenishment model. This model attempts to improve the service provided to the customer. It allows achieving this through more accurate forecasting techniques. It helps

In a push based supply chain model is also called build-to-stock. In a push based supply chain model the production is done on the basis of forecast. Production is done based on guess of customer demand. Goods are pushed from the supplier to the ultimate customer. Since poor quality data distorted the forecast it led to the bullwhip effect. Therefore in order to avoid this problem IKEA can implement pull based model. The pull based model is also called the demand driven model or the built to order. According to the pull based supply chain model customer actual order trigger events in the supply chain. The customer’s order the product and this generate series of events within the supply chain. Customer orders the good. Retailer, the next person in supply chain orders for stock replenishment. The distributor then order manufacturer replenishment of warehouse inventory. Manufacturers order supplier the raw materials to produce goods. Therefore, in pull based supply chain model actual order information is used to place order. The diagram below summarizes the pull based supply chain model. It is also called the lean

However, during recent times IKEA is facing a lot of difficulties in managing its supply chain. Supply chain inefficiencies have dented IKEA’S profit. Therefore several solutions have been provided to overcome supply chain inefficiencies. In my opinion the foremost problem that IKEA is facing is the poor quality information which has also distorted the forecast. Therefore, IKEA should implement enterprise resource planning system. It will help to gather the information on a single domain. All the information will be easily accessible to supply chain partners. The information regarding the inventory management, lead time, production schedule and several other areas will be readily available and accessed by all. Therefore, Enterprise resource planning will help IKEA resolve its supply chain