IKEA Companys Supply Chain Management

Table of Contents

Introduction
Management Structure
Supply Chain Structure
Environmental Performance
Conclusion
Works Cited

Introduction

IKEA is a private organization known all around the world. This organization is a home products retailer that was first to use flat-pack design furniture. Its primary business consists in selling this furniture, as well as accessories and kitchen and bathroom items. IKEA was founded in Sweden in 1943 by Ingvar Kamprad and is now owned by his family.

The name of the company is an acronym (the first two letters are the initials of the founder, the third letter is the farm where he lived (Elmtaryd), and the last one is from Agunnaryd, his home parish). IKEA is a non-governmental organization; it is also nonprofit because it is owned by a charitable foundation. I have chosen namely this organization for the analysis, because, apart from having a well-organized management structure and supply chain structure, IKEA stroke me with its environmental performance.

Management Structure

In general, IKEA employs around 60,000 people worldwide and its all branches have a flat management structure. The companys management style has been unconventional in the past. Ingvar Kamprad has never carried out any marking research for the business development of the company and its operational strategy was only about the instinct of its boss. This has hardly affected the welfare of the organization and it continued functioning normally throughout the past decades.

Currently, its group management is composed of Anders Dahlvig (CEO of IKEA Group and its president), Hans Gydell (Vice President), Soren Hansen (CFO), Lars Gejrot (Head of HR), as well as Peter Hogsted, Ian Duffy, Pernille Lopez who are the Presidents of the companys divisions in the UK, Asia, and North America, respectively.

Supply Chain Structure

IKEAs furniture and household products are designed in Sweden. However, with the purpose of keeping downs costs, they are manufactured in a number of developing countries. The organization has suppliers in 50 countries; at this, 1/3 is purchased from Asia and another 2/3 of purchasing comes from Europe. Some of the companys products are produced in North America, but those are rather small amounts. China is the first largest supplier country; it is followed by Poland, Italy, and Sweden. As a rule, the end-user performs the final assembly of the products. The end-users are numerous, because IKEA operates in 43 countries of the world and has 92% of the total share of international sales (Chandra & Grabis 307). Thus, though the supply chain structure of the company is not complicated, it is absolutely effective.

Environmental Performance

Though IKEA is a large organization which has to pay attention to its management and supply structure, the companys environmental performance remains its priority. Environmental Action Plan was adopted by the organization in 1992; its main focus was on the structural change which allowed the company to reduce the energy and resources consumption. Some of the furniture is produced from the plastic waste and recyclable materials; the use of such substances as chromium, lead, PCB, cadmium, and others has been significantly limited.

Conclusion

In sum, IKEA is a large company which is known throughout the world. Its management structure and supply chain structure are worth analyzing in more detail. Especially remarkable is the fact that the organization is environmentally conscious. This company is able to attract the attention of any researcher, because the issues related to it are extremely interesting to research.