The IKEA case study comprehensively and distinctively elaborates on the companies supply chain management integration with competitive strategy. The report details process flow prior to and after production in enhancing customer satisfaction. Collectively, the case study report shows the significance of the IKEA supply chain and competitive strategy in the market.
The company has various outlets in the global market which makes its products available to the customers. As such, the company products remain available to the potential and present customers hence increasing market preference. Again, IKEA has invested significantly in employee training as a key strategy in enhancing resource efficiency (Sandybayev, 2017). Moreover, IKEA partners and franchisees share the same strategy of resource optimization. Also, the company stores are based in developed countries hence, increasing marketability. Importantly, IKEA embraces customer centricity, a key strategy in the global market. The approach aids in meeting the diverse customer needs and expectations (Harland, 2015). It also assists in making crucial decisions in the production flow. Moreover, IKEA’s operational efficiency approach enhances its competitive strategy focusing on quality products and high efficiency in resource utilization gives the company a low cost and price competitive edge.
IKEA Supply Chain and Third Parties
IKEA supply chain primarily focuses on informed decision making where production and demand data is required (Sandybayev, 2017). The central planning element also includes taking into consideration the suppliers’ ability to deliver the required materials. It also includes material planning, a core element in production planning. Thereafter, the plan i.e. sales demand materials and supplier capacity is executed. Order replenishments are matched with distribution services that are transport and warehouse planning. Finally, the chain takes into account store planning as the chain replicates. Cordially, the supply chain factors in tactical operational distribution and retail planning. The approach as such incorporates planning for sourcing raw materials, production, storage, and retail and customer feedback. Collectively, the supply chain caters for the three major pillars in planning i.e. internal (primary), supplier (secondary) and customer (tertiary) (Reimann & Ketchen, 2017).
IKEA intensively focuses on customer satisfaction through value optimization. The company not only provides the goods but also services that assist customers to make purchases. Such services include pre-purchase information, purchase, transport, and after-sales services. It also offers information on how to use the products. Additionally, the company provides a variety of products upon which customers with different tastes and preferences can choose (Sandybayev, 2017). The company employees as well assist customers in various outlets to make purchases. Furthermore, IKEA outlets offer friendly support services such as parking, food courts, children playgrounds and other facilities which make strategic. The approach significantly adds value to the customer purchase experience and to the IKEA brand. Again, customer feedback reports and product return policy enhances customer value. Collectively, IKEA Company has significantly invested in creating value for the customer.
Order Processing Dtrategy
IKEA in partnership with its suppliers focuses on low-cost approach fin raw materials sourcing. It also aims in minimizing wastage in the production process. Importantly, reducing operational errors through employee efficiency and training ensure high-quality control. Product diversification through creativity and innovation assists in meeting the needs of the various global markets segments (Sandybayev, 2017). The company as we’ll intensively utilizes the approach Range & Supply which focuses on planning as the foundation of a successful supply chain. The department establishes the demand for materials as per production needs and sources distinctively to optimize resources optimization. The approach as well focuses on quality and quantity control. The production as such remains controlled and distribution also directive based on planning. Upon sales, the IKEA products warranty plays a key role in enhancing customer centricity. The IKE partners as well have the IWAY code focusing on control for quality and as such the standardization of process and approach gives the company a competitive advantage in the global market (Sandybayev, 2017). Also, integrating all partners in ensuring quality production, customer centricity and, research, creativity and innovation play a major role in increasing the effectiveness of the order processing strategy. Moreover, the company has a price competitive edge in the market due to its huge range of suppliers and also logistics efficiency.
Conclusion and Recommendations
Collectively, the IKEA supply chain strategy comprehensively factors the elementary elements of an efficient approach towards efficiency, quality control, and resources optimization. By considering the internal needs through planning, suppliers’ integration in quality production, efficient staff, customer centricity and research, the company increases its competitiveness significantly (Reimann & Ketchen, 2017). However, the company could also factor in innovations and research finding of its partners in the supply chain and not entirely rely on findings of its employees. Partners and suppliers could also provide crucial information relating to resource optimization and as such would recommend the approach to also focus on information collection from suppliers and partners (Harland, 2015).
Harland, C. (2015). Supply Chain Dynamics. Wiley Encyclopedia of Management, 1-2. doi:10.1002/9781118785317.weom100048
Reimann, F., & Ketchen, D. J. (2017). Power in Supply Chain Management. Journal of Supply Chain Management, 53(2), 3-9. doi:10.1111/jscm.12140
Sandybayev, A. (2017). Strategic Supply Chain Management Implementation: Case Study of IKEA. Noble International Journal of Business and Management Research, 5-9. Retrieved January 27, 2019, from http://napublisher.org/?ic=journals&id=2
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