Our Team

Lead by Hasnul Aydiel bin Hasnul Edly and co-lead by Nurhanan Sufiyah Binti Zanusi and Nordiana Binti Khamis. Students from Diploma Integrated Logistics Kolej Profesional Mara Bandar Penawar. Enjoy this blog everyone. Thankyou for spend your time.

Chapter 6: Capacity Management

Chapter 7: Planning Activity Control

Information Technology

As we know Ikea is well known company in our life. So, they requires advanced technology to organize the product in the warehouse. using IT technology, Ikea can reduce the time during arrange the product in warehouse. They need a good information system in the warehouse as to ensure that the arrangement of the product is good. Ikea choose warehouse management system (WMS) as their information system because Ikea have a large number of products.

This WMS is about software system that control warehouse operation from receiving goods or material until move out. There are 6 elements that include in warehouse operations, which is receiving and put away, Wi-Fi and barcode system to trace the product during shipment, location management, picking and packing when product arrived, reporting management about the detail of the products and lastly about the inventory management how they arrange the inventory in warehouse. They used forklift and arrange by racking because Ikea packaging in flat style.  

Transportation

Ikea has created a program seeking to make their transportation more efficient and more environmentally friendly. It is to limit the air pollution during distribute their goods to customers. IKEA products are transported in flat-packs so they get more items in each load. It can reduce cost because it can move goods in large quantity because the packaging is easy to arrange. A network of transport companies helps them move their products from factories to stores via distribution center and warehouses. Transport service providers must commit to their code of conduct

Ikea use various modes of transport which is 73% of road, 16 % of sea, 2% of rail and 9% of inter modal. In future years, Ikea decide want distribute their finish good using rail because it is more cheaper and convenient than others mode and can reduce their transportation cost. Other than that, Ikea used third party logistics companies to transport their product to various Ikea location. The role of transportation is important allowing goods to between their facilities.

The IKEA Way on Distributing Home Furnishing Products

Which include details, among other requirements, use of modern vehicles with cleaner fuels, and emissions targets. Their product are flatly-packed or know as ready-to-assemble furniture.

Purchasing & Order Processing

                   

PURCHASING : Terms purchase of ikea is buying volumes from good suppliers is a win-win deal. Ikea suppliers built good relationships with suppliers for their greatest assets.Purchasing co-workers build win-win relations with competitive suppliers who care about people and the environment.
Efficient and reliable production with high quality results and minimum waste are the basis for creating the lower price. Ikea together create optimal conditions and long-term cooperation. In ikea, purchasing teams are located around the world and work with suppliers in more than 50 countries. They finding new suppliers, evaluate and develop existing ones. The purchasing teams together unsure optimal production conditions, capacity, product quality and availability.

                           

ORDER PROCESSING OF IKEA :
Ikea also have order processing like others company. Each company have their own order processing terms. Order processing is the flow work associated with the picking, packing and delivery of the packed items to a shipping carrier. Customer can make order in 2 ways which is order online or walk-in to their stores. Ikea has a lot of stores all around the world.
First step of order processing, customer can survey the product at their websites or customer can go to their ikea stores nearby them. It will be easier for customer if they go to their stores because it has a lot of choices and they will know more about the product. After the customer choice the product, the company will checking the stock product then submit to the shopping cart. This way is when the customer buy at their website. If the customer buy at their stores, they can just simply take the product and pay it. Ikea offer in-home deliveries to their customer. Usually, if the customer don't want to bring the product to home, they can ask ikea sent it to them. If the customer buy online, they have to wait for their order. The company will give the tracking number to the customer to track their order. Usually, the amount of time for ikea to prepare customer order for shipping. This typically takes 1 - 2 days, however some orders may ship within as few as 4 hours and some may take up to 5 days. In conclusion, buy product at ikea stores is more better than online because the customer does not have to wait and a lot of choices of product at their stores.

Inventory Management & Warehousing

Cost-per-touch inventory tacticHaving customers select the furniture and retrieve the packages themselves is an inventory management tactic called ‘cost-per-touch’. As a rule of thumb, companies find that the more hands touch the product, the more costs are associated with it.

Maximum/minimum settings as a proprietary systemThe in-store logistics managers use an inventory replenishment management process developed by IKEA called ‘minimum/maximum settings’ to respond to store-level inventory reorder points and reorder products.

Minimum settings: The minimum amount of products available before reordering.Maximum settings: The maximum amount of a particular product to order at one time.Since all IKEA inventory is only stocked at night after opening hours, the logic of its min/max settings is based on the number of products that will be sold from the reserve stack of the bin in a single day or two-day period. The process meets customer demand while minimizing ordering too few or too many products.

Usage of high-flow & low-flow warehouse facilitiesIKEA’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. In its high-flow warehouses, IKEA employs automatic storage and retrieval systems to drive down its costs-per-touch. Products stocked in a low-flow facility are not in high demand, and operations rely on manual processes since workers will not be shifting and moving inventory around too much.

Strategies & Planning

IKEA works with 21 foresters to ensure that all wood is sourced in compliance with the Company’s strict sustainable forestry standards. Over 30% of the wood used to make products is currently from more sustainable sources - this is wood that is recycled or comes from FSC certified sources. IKEA aims to have increased this to 50% by 2017. The company is also working to inspire millions of customers to live a more sustainable life at home, introducing innovative products and services to help customers use less energy and produce their own renewable power, save and recycle water and reduce and recycle waste. IKEA’s strategy is also aimed at its co-workers. By August 2020, more than 500 co-workers from around the world will have participated in IKEA Foundation ‘I Witness’ trips by visiting school and community based programes run by UNICEF and Save the Children which are supported by the IKEA Foundation’s annual good cause campaigns.

Strategy is a plan that turns the vision and mission of a company, supported by its values, into a set of actions that gives a business a competitive advantage in the market. IKEA’s strategy is to design and develop products based on customer’s need, making sure the price is low and provide many kinds functional, attractive and reliable furnishings and solutions. Sustainability has been at the root of IKEA’s strategy throughout its evolution. In 2012 it launched its People and Planet Positive sustainability strategy, which sets out the company’s approach to achieving positive social and environmental impacts. This sustainability strategy brings all the elements of vision, values and mission together to drive innovation and transform the IKEA business. This will strengthen IKEA’s competitiveness by securing long-term access to important raw materials and energy supplies, maintaining and developing its supplier base, developing relationships with co-workers and customers, and increasing market share.

What is IKEA?

IKEA is a Swedish-founded multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, among other useful goods and occasionally home services. It has been the world's largest furniture retailer since at least 2008. It was founded in Sweden in 1943 by 17-year-old carpenter, Ingvar Kamprad, who was listed by Forbes in 2015 as one of the ten richest people in the world, worth more than $40 billion.The company's name is an acronym that consists of the initials of Ingvar Kamprad , Elmtaryd , and Agunnaryd.

The company is known for its modernist designs for various types of appliances and furniture, and its interior design work is often associated with an Eco-friendly simplicity. In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.

The IKEA group has a complex corporate structure, which members of the European Parliament have alleged was designed to avoid over €1 billion in tax payments over the 2009-2014 period. It is controlled by several foundations based in the Netherlands, and Liechtenstein.

As of November 2018, there are 424 IKEA stores operating in 52 countries. In fiscal year 2018, €38.8 billion (US $44.6 billion) worth of IKEA goods were sold. The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range. There were over 2.1 billion visitors to IKEA's websites in the year from September 2015 to August 2016. The company is responsible for approximately 1% of world commercial-product wood consumption, making it one of the largest users of wood in the retail sector.