{Super SCM Makers} IKEA India: The Digitization of Supply Chain

Saiba Suri, Country Customer Fulfilment Manager, IKEA India highlighted that since innovation is the key to success in SCM, digitalized technologies like computing and machine learning, the Internet of Things, robot process automation, and augmented reality were soon going to enable the next phase of supply chain trends. Companies who were looking for new engineered solutions would require full-cycle supply chain management, execution, predictive analysis, and data analysis.

“We at IKEA are integrating advanced technology solutions like Demand Sensing and acting with agility and flexibility. Through adapting supply chain technologies, there is a two-way benefit – both for us and our consumers. We are effectively working on reducing lead time, cost efficiency, and better product availability, thus creating happy customers,” she explained.

Tackling SCM Challenges

Suri stated some of the challenges that were faced in supply chain management:

Securing the Right Demand Forecast in a Dynamically Changing Environment: Demand forecasting was pivotal in developing strategic and operational strategies, and therefore, crucial for the supply chain. It needed to be considered as the beginning point for the majority of supply chain operations, including manufacturing, purchasing, inbound logistics, cash flow, and raw material planning. It also served as the underlying premise for strategic business activities. IKEA was doing this by integrating advanced technology solutions as highlighted above.

Securing Capacities and Maintaining Cost While Managing Variations: The brand closely monitored trends of shipping lines along with checking carrier and container capacities as an integral part of managing variation in the business. Working closely with partners to secure slots and manage last-mile capacities while focusing on sustainable delivery options helped the brand with securing capabilities and cost management.

Long and Erratic Lead Times: With a well-considered localization plan, IKEA is expanding its local sourcing share to save lead times and costs, as well as providing opportunities for the local population. This also aided in cost reduction since it eliminated import and shipping charges.

Reverse Flow: By rethinking and closely monitoring procedures, as well as cooperating closely with its last-mile service providers to assist initiate quicker reimbursements, IKEA has engineered its systems to run on a faster return cycle.

“We use technology to support orchestrations of orders, order communication enhancements, picking and capacity enhancements, and communication with our service providers. Omnichannel gives us a tailored, customer-centric experience across all the various devices and channels, with a primary focus on the consumer. Delivering consumer value, not a channel-based approach is omnichannel’s core goal,” she concluded.