Ikea Supply Chain

2393 WordsNov 18, 201210 Pages
INTM 543 PURCHASING IKEA SUPPLY CHAIN November 2012 1. INTRODUCTION Ikea is a Swedish international home products company that designs and sells ready-to-assemble furniture. It was founded in 1947 by 17-year-old Ingvar Kamprad, who currently is one of the richest people in the world. He borrowed some money for his parents and create a small local furniture store, 65 years later Ikea is one of the leading home furnishing companies in the world with its vision to ‘’create a better everyday life for the many people’’ (Kamprad). The company’s 2011 sales jumped 6.9 percent to €24.7 billion and its net profit rose 10.3 percent to €2.97 billion ($3.85 billion) (Local, 2012). The Ikea concept is based on their market…show more content…
This means that Ikea is always close to its suppliers, which is one way to creating good business relations between the companies involved. The trading service office’s employees can make frequent visits to suppliers and follow the production process closely, enabling new ideas to be tested and regular quality controls to be made. These persons are also responsible of monitoring working conditions, social conditions and external environment around factories. Suppliers (Ikea, Sustainability Report, 2011) Today the majority of Ikea products are purchased from manufacturers in Europe (63%) but Asia is getting stronger and currently has 33% of the purchases of Ikea. There is a 4% of purchasing in North America. These are the top 5 purchasing countries. * China 22% * Poland 18% * Italy 8% * Sweden 5% * Germany 4% The suppliers are responsible of the Second Sector of the industry, Manufacturing. The internal supplier is Swedwood. The Swedwood Group is part of IKEA Industry Group. Swedwood’s primary task is to ensure production capacity for IKEA. This is accomplished by establishing and operating sawmills, component and furniture production units strategically located relative markets and/or raw materials supply. Swedwood has more than 33 production units and offices in 10 countries in three continents.

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