Supply Chain And The Network Design

The purpose of this paper is to describe and critique the supply chain management of the Sherwin-Williams Company. We will focus on areas such as supply chain risks, productivity measurements, the flow of information between suppliers and customers, supply chain alignment with company strategy etc. We will analyze and critique the existing supply chain and make suggestions for future improvements. Finally, we will relate the topics discussed in Lee’s “The Triple-A Supply Chain” back to the Sherwin-Williams Company and its Team 150 goals.

Supply Chain Management is essential to successful movement of goods through a supply network. Many supply chains involves multiple processes and service providers. Most businesses operate in a just-in-time environment, managers must develop efficient, and cost effective ways of moving goods through the process to prevent loss revenue. Maria Hannah, Owner of The Clean Dog Pet Grooming Company provides pet grooming servicing and manufacturing of pet garments. This paper will examine Ms. Hannah’s responses to the Supply Chain questions as it relates to the business.

Strategic alliances could reduce the complexity of logistics if IKEA is able to find a reliable partner in this field.

Once IKEA identified and understood the consumers (i.e. abandoning metric measured appliances and beds for American standards of size and comfort), they were able to double revenues, from $600 million in 1997 to $1.27 billion in 2002. From this analysis, it is possible to infer that IKEA combined their already successful cost leadership strategy with the properly identified needs of its target market, the American consumer. With this modification of the value chain, IKEA increased revenues and is pointed in the right direction to achieve their growth goals for 2013. As seen in Appendix 1, their projected growth is well into 8% per year, in relation to total projected growth.

Starting from the beginning of its global supply chain, IKEA emphasize on building a sustainable sourcing channel and socially responsible brand image.10 In 2015 IKEA has 978 suppliers in 50 countries, in addition to having a large number of suppliers; IKEA also buys raw materials from its own industrial group. It is not easy to manage the production process and products quality of such a large number of suppliers scattered around the globe. The rationale of IKEA managing the relationships with its suppliers lies in the company business idea and

An in-store logistics is tasked to handle inventory management of the store such as monitoring and recording deliveries, carefully check delivery notices, sort and separate the goods, and get them off to the correct sales area or designated overstock locations. IKEA’s Inventory are managed using the high flow (facilitates goods in high demand) and low flow (manual facilities for goods in low demand) warehouse facilities which helps IKEA to decrease the overall operating cost.

The high level of customer involvement is one of the key features of the IKEA concept. With their unique self-serviced warehouses, customers are required to collect their flat-packed items before proceeding to checkout. Customers are also involved in the assembly of their purchases after transporting them home in their private car. Because the company’s furniture are designed to be shipped disassembled and sold to the customer flat-packaged boxes IKEA saves a lot on shipping costs. As one of the company’s mantras said; “We don’t want to pay to ship air”.

IKEA’s process for developing a new product is not just about changing the physical attributes of an item, say its Trofé mugs. What is crucial in the design is the cost to be incurred in producing one unit of mug. To determine this cost, a team is organized consisting of

He is its patriarch. Kamprad’s imprint is visible on virtually every aspect of IKEA’s organizational culture. “He focuses on the human aspect. What motivates Ingvar is not profit alone but improving the quality of life of the people” (Bartlett & Nanda, 1996. p.3). From the store design to materials to long-term relationships with suppliers, Kamprad actively participated in its execution. Kamprad learned how to turn challenges into opportunities and as such benefitted in incredible revenue growth and globalization. IKEA’s culture, strategy and organization illustrates Kamprad’s vision and dedication to frugality. From requiring executives to work showroom floors to travel constraints to expansion into countries like the US as well as changes in leadership, IKEA has managed to not only survive but thrive (Bartlett & Nanda, 1996). Growing from a handful of stores to over 300 stores in 47 countries, critics wonder if IKEA can maintain its competitive strategy of target costing as well as its Scandanavian organizational culture without Kamprad at the helm? Moreover, should IKEA want to???

If this company is so successful and it is one of the best examples on the world, it must have really strong strategies to eliminate these problems. These strategies make IKEA successful. Inventory management is the most crucial part of supply chain for IKEA’s strategies in other word solutions. For the IKEA there are four crucial inventory management strategies which are long-term and sustainable relationships with suppliers, do it yourself assembly and flat packaging, cost per touch inventory strategy and lastly min/max inventory replenishment

Place – This section of the document will evaluate IKEA’s distribution process and the effectiveness of the process. The data will be collected from IKEA’s student website (Distribution – from supplier to store). The analysis will include the distribution of products for store sales and internet sales.

The aim of this report is perform a comparative and critical analysis of ALdi and NISA’s (Northern independent supplier network) supply chain strategy and methodologies what they currently practicing. The analysis is purely followed by the

Both of them are important to operate a business. The next one will be the process. The first process is the shop floor set up which is extremely important for IKEA. It can show the customers the advantage of the products and to let customer enjoy the process of buying furniture. Another process is the staff training. IKEA have to train the staff to have some professional skill and knowledge because the staffs are representing the company. Then, we can go to another action – outbound logistics. It means the good and service that IKEA provide. They provide the goods delivery service and installation service. This is important for customers because most customers do not know how to install the furniture. Sales and marketing is another primary action. For IKEA, it will be the TV advertisement, annual catalog, internet and the showroom with live demonstration. In fact, this marketing channel is the reason why IKEA is so successful in selling furniture. The last action is the service. They are now providing hotline service. They also have design consultant to help the customers. And disposal of old furniture is also a very important service.

4. What is IKEA’s strategy toward suppliers? How important is this strategy to IKEA’s success?

AC 4.1 – Explain the role of logistics in the supply chain management of IKEA and then evaluate procurement practices.