Tuesday, March 11, 2008

IKEA and the Supply Chain Super Hero

For the past several weekends I have been spending countless hours at IKEA as I furnish my new flat in Vienna, Austria. IKEA has four locations in the region, not to mention one in Brno, so its very convenient. As I assemble everything from tables to chairs to desks I am somehow drawn to the "Made in" stickers that are located on each product. I don't know if there is a such thing as "supply chain instincts", but what else would force me to search for these tiny stickers each time I complete the assembly? I digress, but if I did have these so-called "supply chain instincts" perhaps I should put them to good use and become a supply chain super hero? Let me ponder this some more and get back to you. But in the meantime, I've just revealed my secret identity, so I am not off to a good start.

Anyway, back to IKEA. As I peeled off the "Made in" stickers I began to keep track of all of the countries that IKEA sources from and the list is mind boggling. My shelves were from Russia, the computer desk Poland (pictured above), the chairs Thailand, the screws from China and the carpet from India. And despite what Lou Dobb's says on CNN, its not that they make cheaper shelves in Russia compared to Poland. It's about the supply chain, being close to the suppliers and the natural resources. I wouldn't be surprised if IKEA in the US sources the same shelf unit from Canada for example.

The point is, just like in outsourcing and services delivery, you go to where the talent and skills can be found or to complete my analogy you can get the best natural resources. And IKEA seems to have a very good understanding of that, because if they didn't they would be shipping everything out of China and Sweden, which would have a serious impact on quality and cost.

3 comments:

Nelson said...

Hi!! can you comment on any sources where I can find information specific to the ikea supply chain in any coutry
Thank you

nana said...

hello, I am working on a project about supply chain strategy formulation and i find Ikea's supply chain strategy facsinating. Where can I get information about their supply chain strategy. Thanks

Christopher Sciacca said...

Harvard Business Review published an article a few years ago. You can buy it here: http://hbr.org/product/ikea-s-global-sourcing-challenge-indian-rugs-and-c/an/906414-PDF-ENG