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Enterprise Resource Planning: IKEA

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Questions:

1. Using the case study, provide two examples of sustainable activities.

2. Explain how each sector of industry is linked together within a supply chain.

3. Describe how IKEA influences all elements of its supply chain to adopt sustainable practices.

4. Evaluate and discuss the effect that IKEA’s sustainable practices are likely to have upon the furnishing industry over the longer term.

 

Answers:

1. The organization serves low priced furniture for the consumers basically the organization is strictly focused to become a responsible organization.  The organization has over 36 countries all over the world. The mission of the organization is to make the daily life of the people efficient.  Many examples are there that, are known as sustainable activity.

Ex 1: IKEA is focused on the needs of the consumers. It wants to produce best quality products but by using a very small amount of resources. Moreover, in order to save the resources, the organization is focused to create hollow legged furniture.  If the legs of the furniture will be hollow then it will hold light weight

Ex 2: Another example for IKEA furniture manufacturing company is they are using honeycomb paper filling in place of solid wood. The top of the table will be filled up with, honeycomb paper. The code of manufacturer and suppliers implies that, this organization is strictly focused on the need of the consumers by using fewer amounts of resources. These are the two examples of sustainable activities.

2. The sectors of the industry those are interlinked to each other includes raw material,, manufacturing, distribution, retailer and consumers. After analyzing the case study it has been found that, in order to build a sustainable environment in IKEA, proper management of each step involved in the supply chain model is required to be focused. Particularly, for this case the two activities are manufacturing or production after collecting the raw material on the other hand the other activity is referred to as distribution of the products. These two activities are interrelated to each other manufacturing activity is independent in nature. The device required to manufacture a product, is not dependent on the supply of the raw material. If the amount supply reduces or increases then it will not affect the efficiency of the manufacturing device. The activity is sustainable in nature. Moreover, it can be said that, the sectors of supply chain are all connected to each other.

The initial stage is the supply of raw material, this is the primary sector. It has the capability to develop the natural resources. The resources are timber, agriculture and the oil or the other material. After collecting the raw materials the product manufacturing process will start. This is the secondary sector of supply chain; it helps to develop and furnished the goods or the furniture model. After manufacturing the products will be distributed among the suppliers. The distribution and the retailers fall under the tertiary sector. Then the product will be delivered to the consumers.

3. In order to make more active sustainability the organization has setup certain UK initiatives. In the year of 2006, more than 70 percent of the waste products are recycled. The focus of the organization is to recycle more than 90 percent of the waste products.  IKEA catalog system provides a vast range of collection which ca be used to demonstrate the range of products to store customer information into their central storage area. They use thin client technology. Apart from this, IKEA also influence the environment of its surroundings by creating a green ambiance among the users. According to the IKEA rules low energy or energy efficient light bulbs are utilized in the IKEA business area.

 

In the issue of ethical reliability the IKEA contribute a major part in the UK based supply chain management system. All the business organization (suppliers and manufacturer) who are connected with the IKEA business organization they should maintain certain conditions which is regulated by some administrative authorities.

4. Create a long term business objective among the supply chain management is not easy as like other business area. In supply chain management there are three paradigms involved to design a successful supply management system. These three paradigms are set to describe three distinguished and different categories in the supply chain operations. Suppliers, customers and vendors are the three components of the above described paradigms.

In order to maintain successful proposition among the business people and the end users (Suppliers, customers and vendors) a better common platform is needed to create an inter-connected communication system. Without creating a proper communication channel among different business segments can cause a devastating breakdown of the entire system.

Another major concern which is interrelated with the longevity of the supply chain management system is customer relationship management. It withholds the opportunity of the business organization among the existing consumers and the future consumers.

 

Bibliography

[1] A. Sajjad, G. Eweje and D. Tappin, "Sustainable Supply Chain Management: Motivators and Barriers", Business Strategy and the Environment, vol. 24, no. 7, pp. 643-655, 2015.

12] 'Building A Sustainable Supply Chain, IKEA' (https://businesscasestudies.co.uk, 2016) <https://Building a sustainable supply chain> accessed 22 November, 2016

 [3] C. Busse, J. Meinlschmidt and K. Foerstl, "Managing Information Processing Needs in Global Supply Chains: A Prerequisite to Sustainable Supply Chain Management", Journal of Supply Chain Management, 2016.

[4] G. Markman and D. Krause, "Special Topic Forumon Theory Building Surrounding Sustainable Supply Chain Management", Journal of Supply Chain Management, vol. 50, no. 4, pp. 100-101, 2014.

[5] J. Huttner and S. Batchelor, "Building a Sustainable Supply Chain for the Biobased Economy", Industrial Biotechnology, vol. 10, no. 4, pp. 251-255, 2014.

[6] L. Fayet and W. Vermeulen, "Supporting Smallholders to Access Sustainable Supply Chains: Lessons from the Indian Cotton Supply Chain", Sustainable Development, vol. 22, no. 5, pp. 289-310, 2012.

[7] L. Matthews, D. Power, A. Touboulic and L. Marques, "Building Bridges: Toward Alternative Theory of Sustainable Supply Chain Management", Journal of Supply Chain Management, vol. 52, no. 1, pp. 82-94, 2015.

[8] P. Jonsson, M. Rudberg and S. Holmberg, "Centralised supply chain planning at IKEA", Supply Chain Management: An International Journal, vol. 18, no. 3, pp. 337-350, 2013.

 [9] R. Kashmanian, "Building a Sustainable Supply Chain: Key Elements", Environmental Quality Management, vol. 24, no. 3, pp. 17-41, 2015.

[10] R. Khoshnoodi, H. Fazlollahtabar and I. Mahdavi, "A sustainable reverse supply chain for customer requirement fulfillment", Uncertain Supply Chain Management, vol. 1, no. 1, pp. 45-56, 2013

[11] R. Priem and M. Swink, "A Demand-side Perspective on Supply Chain Management", Journal of Supply Chain Management, vol. 48, no. 2, pp. 7-13, 2012

[12] "Special Topic Forumon Power in Supply Chain Management", Journal of Supply Chain Management, vol. 51, no. 3, pp. 101-101, 2015.

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