IKEA India: The Digitization of the Supply Chain

Saiba Suri, Country Customer Fulfillment Manager, IKEA India, emphasized that as innovation is the key to success in SCM, digitized technologies such as computers and machine learning, the Internet of Things, robotic process automation and augmented reality would soon enable the next phase of supply -Chain trends. Businesses looking for new technical solutions require complete supply chain management, execution, predictive analytics and data analysis.

“At IKEA, we integrate advanced technology solutions such as demand sensing and act in an agile and flexible manner. By adapting supply chain technologies, there are double benefits – both for us and for our consumers. We work effectively on reducing lead time, cost efficiencies and better product availability, creating satisfied customers,” she explained.

Addressing SCM challenges

Suri listed some of the challenges supply chain management faced:

Ensuring the correct demand forecast in a dynamically changing environment: Demand forecasting has been critical to the development of strategic and operational strategies and therefore critical to the supply chain. It had to be seen as the starting point for most supply chain operations, including manufacturing, purchasing, inbound logistics, cash flow, and raw material planning. It also served as a fundamental premise for strategic business activities. IKEA did this by integrating advanced technology solutions as highlighted above.

Securing capacity and maintaining costs while managing variants: The brand closely monitored shipping company trends and reviewed carrier and container capacities as an integral part of managing business fluctuations. Working closely with partners to secure slots and manage last-mile capacity while focusing on sustainable delivery options helped the brand secure capacity and manage costs.

Long and unpredictable delivery times: With a well-considered localization plan, IKEA expands its local sourcing share to save lead time and costs and create opportunities for local people. This also helped to reduce costs, since import and shipping costs were eliminated.

countercurrent: By rethinking and closely monitoring procedures, and working closely with its last-mile service providers to initiate faster refunds, IKEA has engineered its systems to run with a faster return cycle.

“We use technology to help orchestrate orders, improve order communication, order picking and capacity expansion, and communicate with our service providers. Omnichannel gives us a tailored, customer-centric experience across all different devices and channels, with the consumer first and foremost. The core goal of omnichannel is to deliver consumer value and not a channel-based approach,” she concluded.

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