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Authors:
Kasra Ferdows (Georgetown University); Jan Olhager (Lund University)
Published in:
2020
Version:
2-Apr-2020
Revision date:
21-Apr-2020
Length:
15 pages
Data source:
Field research
Notes:
To maximise their effectiveness, colour items should be printed in colour.

Abstract

In November 2019, IKEA’s online sales were growing rapidly and recent launch of new small city stores, which unlike the traditional IKEA stores carried little inventory, as well as growing competition from Amazon, Alibaba and other online retailers all signaled the need for a fresh look at IKEA’s global supply chain strategy. With EUR41.3 billion in sales, IKEA had a massive system for procuring, stocking, and delivering around 25,000 different products and for replenishing its 433 stores in 50 countries. It had over 1,000 suppliers in 52 countries, 41 trading centers in 41 countries, 27 distribution centers (DCs) in 17 countries, and 11 customer distribution centers (CDCs) in 9 countries. This massive system was designed essentially for a brick-and-mortar structure. The challenge facing IKEA was how to make this system suitable also for the growing online sales. It needed to make its production and supply chain more agile. But exactly by how much, how, and where in the supply chain?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Topics

Supply chain strategies for online sales; Implications of e-Commerce for manufacturing; Production and supply chains agility; Deploying Industry 4.0 technologies for increasing agility of production and supply chains; Preparing brick-and-mortar supply chains for e-Commerce; Transforming global complex supply chains for digital age

Setting

The events covered by this item took place in 2019-2020.

Geographical setting

Region:
World/global

Featured company

Company name:
IKEA
Employees:
10000+
Turnover:
EUR 41.3 Billion
Type:
Privately held
Industry:
Furniture
Other keywords:
World's largest furniture retailer; World's largest manufacturer of wood furniture

Featured protagonists

  • Per Berggren (male), Head of Industrial Strategies, IKEA Industry
  • Anders Lindberg (male), Business Development Manager

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