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IKEA’s supply chain strategy is a key component of its success in the retail market. The strategy is focused on leveraging global sourcing, automation of processes, lean manufacturing, and e-commerce to optimize the company’s operations.
Our ambition for 2030 is to regenerate resources while growing the IKEA business. We aim to only use responsibly sourced renewable or recycled materials and will continue to secure and develop responsible sourcing standards.
IWAY is the IKEA way of responsibly procuring products, services, materials and components. It sets clear expectations and ways of working for environmental, social and working conditions, as well as animal welfare, and is mandatory for all suppliers and service providers that work with IKEA.
IKEA’s supply chain strategy is efficient and effective. In order to keep it this way, IKEA focuses on a few key areas. Sustainability Initiatives. Businesses with complex supply chains often have trouble keeping track of every supplier’s sustainability efforts.
The strategy identifies three major sustainability challenges that are highly relevant for the IKEA business: climate change and nature loss, unsustainable consumption, and rising inequality.
The strategy centers around leveraging global sourcing, embracing process automation, implementing lean manufacturing practices, and harnessing the power of e-commerce to optimize operations. Through global sourcing, IKEA gains access to a diverse range of products at competitive prices.
In our case, IKEA’s decision to source globally produced a domino effect (Hertz, 1998) of sourcing patterns cascading through the PAX supply network. Thus, the sourcing decisions of actors, e.g., Sapa were heavily influenced by the sourcing decisions of IKEA (dashed arrows in Fig. 3).
What does the GS strategy of IKEA’s sustainable leather initiative entail? IKEA’s global sourcing strategy for leather is characterized by the five factors (cost, quality, availability, sustainability and preferred partner) and can be further explained by its Three
The case demonstrates IKEA’s sustainable leather initiative supported by its tailored GS strategy and GS structure and provides a benchmark of Sustainable GS for multinational companies and allows for a thorough discussion of how to implement a sustainability initiative while conducting GS.
In 2020 IKEA introduced a new range of supplier requirements as part of its IWAY strategy. One of the new areas addressed in the updated IWAY strategy is the response to emerging forms of work, such as gig economy employment.