IKEA Store— Chain supply strategies and the story behind the scene

IKEA is one of the world’s largest furniture companies, with over 400 stores worldwide selling low-cost household accessories to customers. It is a Swedish multinational corporation that sells ready-to-assemble furniture, kitchenware, and home accessories. IKEA started its operations in India with its first store in Hyderabad in 2018.

What makes IKEA unique?

Their products offer a unique self-service experience, where customers pick up the items, take them home, and assemble them themselves. While this may not initially sound extraordinary, it sets them apart from the usual practice of purchasing items online and having them delivered with a technician assembling them, or relying on store personnel to assemble furniture products like IKEA beds. 

IKEA introduced the innovative concept of customers assembling their own products, which has since been adopted by other brands. Nowadays, many brands provide easy-to-follow instruction manuals, allowing customers to assemble products themselves. This approach is particularly advantageous in today’s climate, where limiting the number of people entering your home is a priority.

How it all started? 

When Ingvar Kamprad established Ikea in 1943 at the age of 17, he had no idea that the brand would go on to conquer the world in the following decades. Fast forward to 2015, and Kamprad found himself among the ten wealthiest individuals globally, with a staggering empire valued at over USD 40 billion according to Forbes. Since then, Ikea has continued its upward trajectory, propelled by Kamprad’s vision.

The name “IKEA” was derived from Kamprad’s own initials, with the ‘E’ representing Elmtaryd (the farm where he grew up) and the ‘A’ symbolizing Agunnaryd (his hometown in Smaland, Sweden). Initially operating as a mail-order sales business, Ikea ventured into the furniture market, opening its first furniture store in Almhult, Smaland, in 1958. As of 2017, the brand boasted an impressive network of 415 stores across 49 countries.

Ikea’s interest in the Indian market dates back to 2006; however, at that time, Indian regulations allowed only 51% foreign ownership, and foreign single-brand retailers were required to have a local partner to operate in the country. In January 2012, the Indian government amended the rules, eliminating the necessity for foreign single-brand retailers to have a local partner. This paved the way for Ikea and other similar firms to establish their presence in India.

Reports in June 2012 indicated that Ikea planned to invest USD 700 million in India. In November 2012, the Foreign Investment Promotion Board granted approval for Ikea to open stores in the country, solidifying its entry into the Indian market.

IKEA Supply Chain

At the core of IKEA’s success lies its extensive global supply chain network, comprising numerous suppliers, manufacturers, and logistics providers. The management of these crucial stakeholders is accomplished through a comprehensive approach that involves IKEA’s internal Quality Assurance teams, external auditors, and various monitoring systems. This robust supply chain strategy has played a pivotal role in ensuring consistent customer satisfaction and market dominance for IKEA.

IKEA’s Supply Chain Strategy

IKEA’s retail success hinges on its well-crafted supply chain strategy, which encompasses several key elements. The strategy centers around leveraging global sourcing, embracing process automation, implementing lean manufacturing practices, and harnessing the power of e-commerce to optimize operations. Through global sourcing, IKEA gains access to a diverse range of products at competitive prices. Automation streamlines processes, driving cost reduction and operational efficiency. By adopting lean manufacturing principles, waste is minimized, and production is enhanced. Additionally, e-commerce broadens IKEA’s customer base, expanding its reach and market influence. These strategic approaches collectively enable IKEA to thrive as a frontrunner in the retail industry, maintaining its competitive edge and market leadership position.

Global Sourcing

IKEA’s supply chain strategy is fortified by its global sourcing approach, which entails procuring goods from diverse countries spanning Europe, Asia, and the US. By accessing a wide range of products at cost-effective prices, IKEA maintains its competitive edge in the retail market. Additionally, the company adheres to a stringent ethical code, ensuring responsible sourcing practices that prioritize environmental considerations. This commitment to quality and sustainability has cemented IKEA’s reputation as a trusted brand.

Automation of Processes

As part of its supply chain strategy, IKEA embraces process automation by leveraging robots and other automated systems. This strategic approach aims to enhance efficiency and minimize costs. By integrating automation, IKEA optimizes its operations, leading to improved cost-effectiveness and a consistent delivery of quality products that drive customer satisfaction. Additionally, automation reduces the reliance on manual labor, contributing to improved working conditions for IKEA’s employees.

Lean Manufacturing

IKEA incorporates lean manufacturing principles into its supply chain strategy to maximize production efficiency. By adopting techniques like Just-in-Time (JIT) production, the company ensures that materials and components are delivered precisely when required for manufacturing processes, minimizing excess inventory. This approach not only reduces costs but also enhances operational efficiency and minimizes waste generation. Through the implementation of these lean practices, IKEA optimizes its supply chain, resulting in improved productivity and sustainability.

Commerce

Embracing the digital age, IKEA has integrated e-commerce into its supply chain strategy, allowing the company to expand its reach beyond physical stores and connect with a broader audience. With a robust online presence, including an e-commerce store, mobile app, and active social media engagement, IKEA enhances its visibility and taps into a larger customer base. To support this digital expansion, IKEA has made substantial investments in advanced logistics systems, ensuring efficient and precise fulfillment of online orders in a timely manner.

Vast Range of IKEA Products

While IKEA is well-known for its furniture offerings, the variety of products they provide extends far beyond that realm. In fact, their inventory encompasses an extensive range of categories that cater to diverse needs. Just to give you a glimpse, here’s a list of the product categories available on their India website:

• Furniture
• Kitchen and appliances
• Bathroom Products
• Outdoor Products
• Kitchen and Tableware
• Summer
• Home Electronics
• Textile
• Decoration
• Beds and Mattresses
• Storage and organization
• Laundry and Cleaning
• Home Smart
• Winter Collections
• Home Improvement
• Food and Beverages

As you can see, the list is quite extensive. However, actually visiting an IKEA store and immersing yourself in the captivating display of their products is an experience like no other. You’ll encounter numerous items that will undoubtedly catch your attention and leave a lasting impression.

IKEA Support

Go to the store page for more information, such as opening times and directions. 

IKEA Store – HITEC City
Raidurg, Serilingampally, Mandal,
Survey No. 83/1, Plot No. 25, 26, Part 29 Panmaqtha, Rangareddy,
Hyderabad, 500032,
Telangana, India.

IKEA Store – Navi Mumbai
Turbhe MIDC, Turbhe
Navi Mumbai, 400705,
Maharashtra, India.

IKEA Worli City Store

Unit-1 Level 0, Unit -2 Level 1, Unit -3 Level 2, Bldg #18 & #10 Trade View, Utopia City, Pandurang Budhkar Marg, near Kamala Mills Compound, Worli, Mumbai, Maharastra, 400013

IKEA Store – Nagasandra

Manjunatha Nagar, Bagalakunte,
Bengaluru, Karnataka, 560073IKEA Store – R CITY
R CITY Mall,  3rd and 4th Floor, North Wing, T-28I and TF-1,146 CTS No. 166/1 to 23 off village Ghatkopar, LBS Marg, Mumbai, Maharashtra – 400086

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