IKEA strategy is to control and coordinate the value chain from raw material, production and range development to distribution in the stores. Their vertical integration including the backward integration of the manufacturing arm Sweedwood and extension of their activities from furniture factories to control raw materials, saw mills, board suppliers and other component factories. They have used life cycle analysis of products through the supply chain to determine purchasing, manufacturing and consumer strategies. That makes the supply chain management one of the most important functions in the company and a triple-bottom-line approach has increased economic profit while reducing social and environmental loses. IKEA triple-bottom-line approach consists from: • Economy/profit • Ecology/planet • Equity/people

1. IKEA, Building a
Sustainable Supply
Chain
Supply Chain Management

2. A SUSTAINABLE SUPPLY CHAIN
The Green Team
Radu Acalfoaie, Siobhan Flynn, Bob Ibeh, Paul McMahon
SCM & SUSTAINABILITY DEVELOPMENT DISTRIBUTION RETAIL
TAKING RESPONSIBILITY FOR PEOPLE & THE ENVIRONMENTRAW MATERIALS
MANUFACTURING
DEMOCRATIC DESIGN CENTRE
OPTIONAL
LOGO HERE
OPTIONAL
LOGO HERE
• IKEA offers customers inspiring solutions for their homes at accessible prices. The
customer is the creator – self assembled furniture generates value for the customer.
• Energy efficient stores, from solar panels used to power many IKEA stores around the
world to ensuring that more than half of the energy used in stores comes from renewable
sources, IKEA are striving towards total energy efficiency.
• IKEA offers an Innovative retail & warehousing solution. By consolidating these two
functions under one roof, IKEA has cleverly reduced or removed activities, costs, & waste
associated with assembly, raw materials, storage, & shipping helping to shrink their
environmental footprint.
• Waste management is vital across all of IKEA stores, where up to 15 categories of waste
are sorted and 90% of all waste is recycled or used for energy production.
• IKEA wants to make recycling & waste disposal easier for their customers as well by
providing customers with the opportunity to return & sort waste, such as batteries &
fluorescent lights.
• A sustainable life at home - offering customers smart products & services to help
customers live more sustainably is key. Energy consuming products, such as white
goods & lights are 50% more energy efficient than the average product on the market.
• Room settings offer customers a visual understanding of how their products work, their
features & benefits, and help to demonstrate how they can help the customer live a more
sustainable life.
Why choose between sustainability, style, function, & price?
At IKEA, you don’t have to!
▪ 1.1 million square meters of selling
space being used sustainably
▪ 884 million store visits annually
▪ 375 stores worldwide
▪ IKEA’s unique retailing model means
that their customers become a part of
their supply chain as they journey
through any IKEA store.
From 3D printed chairs to evolved kitchens, the
world’s biggest furniture retailer is reassembling
the future.
● Sophisticated and efficient supply chain.
F.W.Taylors Time and Motion Dream Company
seamless transition of efficiency into profit . This is
how IKEAS manufacturing process was described
in Wired magazine.(Bell 2015)
● The main challenge with manufacturing is simple.
Can it be flat packed, transported, assembled, and
disassembled again
● Marcus Engman This is where the magic happens, The Democratic Design
Centre is located at Älmhult and co-ordinates with design centres in India and
China.
● 2000 New Products Every Year, 59% Made in Europe.
● Imagine having a 3D printer with the space and capacity to reproduce a chair.
IKEA have this. Actually nearly half of all products are 3D printed before going to
manufacturing process. This combined with the latest advances in material and
manufacturing/ assembly techniques is all focused towards the customer!
● 200 - 300 New Ideas Every Week. Narrowed down to 35.
● IKEA want very ProductionLine Runningat Full Efficiency.
BEFORE AFTER BEFORE AFTER
• Supplier selection based on
environmental profile such as ISO
14000 & Energy consumption ISO
50001
• Cooperation with suppliers to
reduce pollution & waste
• Increased focus on ecological
transport mode selection
• Sustainable acquisition of raw
materials
• Invest in renewable energy
• Reducing of packaging
• Sharing information
• Innovation
MANUFACTURING WASTE – WHAT WASTE?
ENVIRONMENTAL MEASURES PEOPLE & PLANET POSITIVE
At IKEA, the idea of sustainability is engrained
in to its corporate identity, not only in their
supply chain practices but across the entire
organization. Sustainability does not end at
production but follows through to logistics,
retail, and even the end user. People & Planet
Positive is IKEA’s ethos and their
sustainability directive.
Manufacturing at IKEA doesn’t stop at the finished product, it is a 360
degree process. Raw material is used, products are produced, then any
waste becomes the raw materials and produces more products. Ikea also
supply drop off areas at stores for waste which they recycle. Damaged
products are used to repair other products or repaired and sold off cheap.
Here are some examples made from waste, including used baby dippers
and saw dust
A triple-bottom-line approach has
increased economic profit while
reducing social and
environmental loses.
IKEA triple-bottom-line approach
consists from:
Economy/Profit -3.5 billion profit
Ecology/Planet-100% renewable
energy by 2020
Equity/People- 155.000
employees, 48% of the managers
are females
“sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own needs.”
(UCLA, 2016)
• 1500 (978, furniture) suppliers in 50 countries, has trading
agreements such as IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable
and suppliers audited-16.1 million m3 of wood used in 2015
• 1997 new particle material, the use of raw material was
reduced by 85,816 tons, 2,800 less trucks for transportation
due to lower cargo weight, easier handling of the
merchandise for the customers and reduced costs and
prices.
• Cotton - grown in a more sustainable way, less pesticides
by 50%, fertilizer's by 30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-
free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in
Russia from 3.3 million to 20 million hectares
• 9,500 hectares of forest have been replanted with native
tree species
• Water reductions plans-micro watersheds in India
HOW IKEA DISTRIBUTION CHANNELS WORKS
The process of distribution in IKEA is carefully design and coordinated through division of labor. For
example:
Store distribution manager: The store distribution manager examines the supply chain, ensuring
distribution centres can house the volume of goods required by stores.
Customer distribution manager: The customer distribution manager is responsible for working and
developing the order distribution business, from warehouse to customer.
Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA
and its carriers, guaranteeing an effective flow of goods
Warehouse operations manager: The warehouse operations manager ensures proficiency within the
distribution centres and reacts to the needs of the supply chain.
The quality manager is responsible for quality control in the warehouse and efficiency of supply to the
customer.
Transport business developer: The transport business developer builds and maintains relationships
between IKEA and its carriers whilst negotiating mutually beneficial transport scenarios.
Goods flow coordinator: The goods flow coordinator secures the maximum product availability to the
customer with the lowest possible supply chain costs.
IKEA strive to see a huge percentage of all freight within Europe moved by rail.
For some years now, all the freight companies working with IKEA have been mandated to provide
statistics for a so called “Environmental Performance Sheet “a detailed document explaining how
their operations impact on the environment. This allows IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to cut down on the use of
fuel to minimize C02 emission.
IKEA is considering another ways it can provide end-to-end supply chain solutions and one idea is to
take returned products and recycle them into other products that means consumers can now return
plastics, batteries, furniture,compact fluorescent light bulbs, mattress, and textiles to the store.
Better efficiency and maximum space utilization
Large volumes; Flat packages; Low costs; Low CO2 emissions.
Efficiency is crucial to the IKEA business strategy, and this is reflected in the way the design their
product range and shipments to minimize the number of journeys and distances travelled. Packaging
and the way products are packed into vehicles can have a big impact on the efficiency of transport
because the more products they can fit into a container, the fewer journeys they need to make.
Thereby lowering distribution costs and CO2 emissions. The rationale behind this, is to minimize the
impact this part of their business has on the environment.
Renewable Energy
IKEA 768,972-square-foot PV array comprises of a 2,674.9-kW system, constructed with 18,576 panels,
and is the state’s largest rooftop array. The IKEA distribution center will generate roughly 3,397,178
kWh of clean electricity yearly, the equivalent of reducing 2,397 tons of carbon dioxide (CO2),
eradicating the emissions of 499 cars or powering 359 homes yearly. These will be consistent with the
company’s objective of being energy independent by 2020, IKEA has installed more than 250,000 solar
panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
Charging station
As part of IKEA’s commitment to renewable energy, the company are presently installing electric
vehicle rapid charging points across all of their UK stores to complement the existing
IKEA REVERSE LOGISTICS
06/07/2016 Radu Acalfoaie 2

3. About IKEA
1943 by Ingvar Kamprad in the Swedish town of Almhult selling wallets, picture frames,
pens and even ladies’ stockings.
• 1950 stopped selling other items focusing more on furniture items and in 1951 Ikea has produced is first
catalogue also started working on the flack pack concept
• First major furniture store was opened in 1958 and by 1960 stores were opened outside Sweden in; Norway
and Denmark
1970 the business has been expanding outside Scandinavia, first in Switzerland followed by
Germany, Australia, Canada, Austria and Netherlands in the following years
• 1980 first stores were opened in USA and UK also winning the Excellent Design prize in the same period.
• after 1990 in Hungry, Poland, Czech Republic, United Arab Emirates, Spain and China focusing also on
introducing the children range in the same period followed by expansion to Russia and Canada in 2000
2000 launched its environmental program called IWAY and reduced the use of their
transport with a focus on environmental friendly transport and managed to reduce its CO2.
• It specifies the requirements that are placed on suppliers of products and services and details what they can expect in
return from IKEA
• It covers working conditions, the prevention of child labour, the environment, responsible forestry management and
more (IKEA, 2016)
2015 following a vertical integration strategy of the company and with a specific
environmental purpose IKEA has acquired large surfaces of forestry for its raw materials in
the Baltic countries and Romania.
2015-100% sustainable cotton sources, 50% sustainable wood sources
06/07/2016 Radu Acalfoaie3

4. Sustainability & SCM at IKEA
A triple-bottom-line approach has
increased economic profit while
reducing social and environmental
loses.
IKEA triple-bottom-line approach
consists from:
• Economy/Profit -3.5 billion profit
• Ecology/Planet-100% renewable
energy by 2020
• Equity/People- 155.000 employees,
48% of the managers are females
06/07/2016 Radu Acalfoaie4
“sustainable development is development that meets the needs of the present without compromising the
ability of future generations to meet their own needs.” (UCLA, 2016)

5. Environmental Measures
• Supplier selection based on environmental
profile such as ISO 14000, Energy
consumption ISO 50001
• Selection of logistics service based on
environmental profile e.g. ISO 14000
• Consolidation of shipments
• Sharing information
• Increased focus on ecological transport mode
selection
• Reducing of packaging
• Sustainable acquisition of raw materials
• Cooperation with suppliers to reduce
pollution and waste
• Invest in renewable energy
• Innovation
06/07/2016 Radu Acalfoaie5

6. A SUSTAINABLE SUPPLY CHAIN
The Green Team
Radu Acalfoaie, Siobhan Flynn, Bob Ibeh, Paul McMahon
SCM & SUSTAINABILITY DEVELOPMENT DISTRIBUTION RETAIL
TAKING RESPONSIBILITY FOR PEOPLE & THE ENVIRONMENTRAW MATERIALS
MANUFACTURING
DEMOCRATIC DESIGN CENTRE
OPTIONAL
LOGO HERE
OPTIONAL
LOGO HERE
• IKEA offers customers inspiring solutions for their homes at accessible prices. The
customer is the creator – self assembled furniture generates value for the customer.
• Energy efficient stores, from solar panels used to power many IKEA stores around the
world to ensuring that more than half of the energy used in stores comes from renewable
sources, IKEA are striving towards total energy efficiency.
• IKEA offers an Innovative retail & warehousing solution. By consolidating these two
functions under one roof, IKEA has cleverly reduced or removed activities, costs, & waste
associated with assembly, raw materials, storage, & shipping helping to shrink their
environmental footprint.
• Waste management is vital across all of IKEA stores, where up to 15 categories of waste
are sorted and 90% of all waste is recycled or used for energy production.
• IKEA wants to make recycling & waste disposal easier for their customers as well by
providing customers with the opportunity to return & sort waste, such as batteries &
fluorescent lights.
• A sustainable life at home - offering customers smart products & services to help
customers live more sustainably is key. Energy consuming products, such as white
goods & lights are 50% more energy efficient than the average product on the market.
• Room settings offer customers a visual understanding of how their products work, their
features & benefits, and help to demonstrate how they can help the customer live a more
sustainable life.
Why choose between sustainability, style, function, & price?
At IKEA, you don’t have to!
▪ 1.1 million square meters of selling
space being used sustainably
▪ 884 million store visits annually
▪ 375 stores worldwide
▪ IKEA’s unique retailing model means
that their customers become a part of
their supply chain as they journey
through any IKEA store.
From 3D printed chairs to evolved kitchens, the
world’s biggest furniture retailer is reassembling
the future.
● Sophisticated and efficient supply chain.
F.W.Taylors Time and Motion Dream Company
seamless transition of efficiency into profit . This is
how IKEAS manufacturing process was described
in Wired magazine.(Bell 2015)
● The main challenge with manufacturing is simple.
Can it be flat packed, transported, assembled, and
disassembled again
● Marcus Engman This is where the magic happens, The Democratic Design
Centre is located at Älmhult and co-ordinates with design centres in India and
China.
● 2000 New Products Every Year, 59% Made in Europe.
● Imagine having a 3D printer with the space and capacity to reproduce a chair.
IKEA have this. Actually nearly half of all products are 3D printed before going to
manufacturing process. This combined with the latest advances in material and
manufacturing/ assembly techniques is all focused towards the customer!
● 200 - 300 New Ideas Every Week. Narrowed down to 35.
● IKEA want very Production Line Running at Full Efficiency.
BEFORE AFTER BEFORE AFTER
• Supplier selection based on
environmental profile such as ISO
14000 & Energy consumption ISO
50001
• Cooperation with suppliers to
reduce pollution & waste
• Increased focus on ecological
transport mode selection
• Sustainable acquisition of raw
materials
• Invest in renewable energy
• Reducing of packaging
• Sharing information
• Innovation
MANUFACTURING WASTE – WHAT WASTE?
ENVIRONMENTAL MEASURES PEOPLE & PLANET POSITIVE
At IKEA, the idea of sustainability is engrained
in to its corporate identity, not only in their
supply chain practices but across the entire
organization. Sustainability does not end at
production but follows through to logistics,
retail, and even the end user. People & Planet
Positive is IKEA’s ethos and their
sustainability directive.
Manufacturing at IKEA doesn’t stop at the finished product, it is a 360
degree process. Raw material is used, products are produced, then any
waste becomes the raw materials and produces more products. Ikea also
supply drop off areas at stores for waste which they recycle. Damaged
products are used to repair other products or repaired and sold off cheap.
Here are some examples made from waste, including used baby dipers
and saw dust
A triple-bottom-line approach has
increased economic profit while
reducing social and
environmental loses.
IKEA triple-bottom-line approach
consists from:
Economy/Profit -3.5 billion profit
Ecology/Planet-100% renewable
energy by 2020
Equity/People- 155.000
employees, 48% of the managers
are females
“sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own needs.”
(UCLA, 2016)
• 1500 (978, furniture) suppliers in 50 countries, has trading
agreements such as IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable
and suppliers audited-16.1 million m3 of wood used in 2015
• 1997 new particle material, the use of raw material was
reduced by 85,816 tons, 2,800 less trucks for transportation
due to lower cargo weight, easier handling of the
merchandise for the customers and reduced costs and
prices.
• Cotton - grown in a more sustainable way, less pesticides
by 50%, fertilizer's by 30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-
free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in
Russia from 3.3 million to 20 million hectares
• 9,500 hectares of forest have been replanted with native
tree species
• Water reductions plans-micro watersheds in India
HOW IKEA DISTRIBUTION CHANNELS WORKS
The process of distribution in IKEA is carefully design and coordinated through division of labor. For
example:
Store distribution manager: The store distribution manager examines the supply chain, ensuring
distribution centres can house the volume of goods required by stores.
Customer distribution manager: The customer distribution manager is responsible for working and
developing the order distribution business, from warehouse to customer.
Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA
and its carriers, guaranteeing an effective flow of goods
Warehouse operations manager: The warehouse operations manager ensures proficiency within the
distribution centres and reacts to the needs of the supply chain.
The quality manager is responsible for quality control in the warehouse and efficiency of supply to the
customer.
Transport business developer: The transport business developer builds and maintains relationships
between IKEA and its carriers whilst negotiating mutually beneficial transport scenarios.
Goods flow coordinator: The goods flow coordinator secures the maximum product availability to the
customer with the lowest possible supply chain costs.
IKEA strive to see a huge percentage of all freight within Europe moved by rail.
For some years now, all the freight companies working with IKEA have been mandated to provide
statistics for a so called “Environmental Performance Sheet “a detailed document explaining how
their operations impact on the environment. This allows IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to cut down on the use of
fuel to minimize C02 emission.
IKEA is considering another ways it can provide end-to-end supply chain solutions and one idea is to
take returned products and recycle them into other products that means consumers can now return
plastics, batteries, furniture,compact fluorescent light bulbs, mattress, and textiles to the store.
Better efficiency and maximum space utilization
Large volumes; Flat packages; Low costs; Low CO2 emissions.
Efficiency is crucial to the IKEA business strategy, and this is reflected in the way the design their
product range and shipments to minimize the number of journeys and distances travelled. Packaging
and the way products are packed into vehicles can have a big impact on the efficiency of transport
because the more products they can fit into a container, the fewer journeys they need to make.
Thereby lowering distribution costs and CO2 emissions. The rationale behind this, is to minimize the
impact this part of their business has on the environment.
Renewable Energy
IKEA 768,972-square-foot PV array comprises of a 2,674.9-kW system, constructed with 18,576 panels,
and is the state’s largest rooftop array. The IKEA distribution center will generate roughly 3,397,178
kWh of clean electricity yearly, the equivalent of reducing 2,397 tons of carbon dioxide (CO2),
eradicating the emissions of 499 cars or powering 359 homes yearly. These will be consistent with the
company’s objective of being energy independent by 2020, IKEA has installed more than 250,000 solar
panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
Charging station
As part of IKEA’s commitment to renewable energy, the company are presently installing electric
vehicle rapid charging points across all of their UK stores to complement the existing
IKEA REVERSE LOGISTICS
06/07/2016 Radu Acalfoaie 6

7. Sustainable Acquisition Of Raw Materials
• 1500 (978, furniture) suppliers in 50 countries, has trading agreements such as
IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable and suppliers audited-
16.1 million m3 of round wood used in 2015
• 1997 new particle material, the use of raw material was reduced by 85,816 tons,
2,800 less trucks for transportation due to lower cargo weight, easier handling of
the merchandise for the customers and reduced costs and prices.
• Cotton - grown in a more sustainable way, less pesticides by 50%, fertilisers by
30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in Russia from 3.3 million
to about 20 million hectares
• 9,500 hectares of forest have been replanted with native tree species
• Forestry project in China FSC certified (Forest Stewardship Council)
• Water reductions plans-micro watersheds in India
06/07/2016 Radu Acalfoaie7

8. A SUSTAINABLE SUPPLY CHAIN
The Green Team
Radu Acalfoaie, Siobhan Flynn, Bob Ibeh, Paul McMahon
SCM & SUSTAINABILITY DEVELOPMENT DISTRIBUTION RETAIL
TAKING RESPONSIBILITY FOR PEOPLE & THE ENVIRONMENTRAW MATERIALS
MANUFACTURING
DEMOCRATIC DESIGN CENTRE
OPTIONAL
LOGO HERE
OPTIONAL
LOGO HERE
• IKEA offers customers inspiring solutions for their homes at accessible prices. The
customer is the creator – self assembled furniture generates value for the customer.
• Energy efficient stores, from solar panels used to power many IKEA stores around the
world to ensuring that more than half of the energy used in stores comes from renewable
sources, IKEA are striving towards total energy efficiency.
• IKEA offers an Innovative retail & warehousing solution. By consolidating these two
functions under one roof, IKEA has cleverly reduced or removed activities, costs, & waste
associated with assembly, raw materials, storage, & shipping helping to shrink their
environmental footprint.
• Waste management is vital across all of IKEA stores, where up to 15 categories of waste
are sorted and 90% of all waste is recycled or used for energy production.
• IKEA wants to make recycling & waste disposal easier for their customers as well by
providing customers with the opportunity to return & sort waste, such as batteries &
fluorescent lights.
• A sustainable life at home - offering customers smart products & services to help
customers live more sustainably is key. Energy consuming products, such as white
goods & lights are 50% more energy efficient than the average product on the market.
• Room settings offer customers a visual understanding of how their products work, their
features & benefits, and help to demonstrate how they can help the customer live a more
sustainable life.
Why choose between sustainability, style, function, & price?
At IKEA, you don’t have to!
▪ 1.1 million square meters of selling
space being used sustainably
▪ 884 million store visits annually
▪ 375 stores worldwide
▪ IKEA’s unique retailing model means
that their customers become a part of
their supply chain as they journey
through any IKEA store.
From 3D printed chairs to evolved kitchens, the
world’s biggest furniture retailer is reassembling
the future.
● Sophisticated and efficient supply chain.
F.W.Taylors Time and Motion Dream Company
seamless transition of efficiency into profit . This is
how IKEAS manufacturing process was described
in Wired magazine.(Bell 2015)
● The main challenge with manufacturing is simple.
Can it be flat packed, transported, assembled, and
disassembled again
● Marcus Engman This is where the magic happens, The Democratic Design
Centre is located at Älmhult and co-ordinates with design centres in India and
China.
● 2000 New Products Every Year, 59% Made in Europe.
● Imagine having a 3D printer with the space and capacity to reproduce a chair.
IKEA have this. Actually nearly half of all products are 3D printed before going to
manufacturing process. This combined with the latest advances in material and
manufacturing/ assembly techniques is all focused towards the customer!
● 200 - 300 New Ideas Every Week. Narrowed down to 35.
● IKEA want very Production Line Running at Full Efficiency.
BEFORE AFTER BEFORE AFTER
• Supplier selection based on
environmental profile such as ISO
14000 & Energy consumption ISO
50001
• Cooperation with suppliers to
reduce pollution & waste
• Increased focus on ecological
transport mode selection
• Sustainable acquisition of raw
materials
• Invest in renewable energy
• Reducing of packaging
• Sharing information
• Innovation
MANUFACTURING WASTE – WHAT WASTE?
ENVIRONMENTAL MEASURES PEOPLE & PLANET POSITIVE
At IKEA, the idea of sustainability is engrained
in to its corporate identity, not only in their
supply chain practices but across the entire
organization. Sustainability does not end at
production but follows through to logistics,
retail, and even the end user. People & Planet
Positive is IKEA’s ethos and their
sustainability directive.
Manufacturing at IKEA doesn’t stop at the finished product, it is a 360
degree process. Raw material is used, products are produced, then any
waste becomes the raw materials and produces more products. Ikea also
supply drop off areas at stores for waste which they recycle. Damaged
products are used to repair other products or repaired and sold off cheap.
Here are some examples made from waste, including used baby dippers
and saw dust
A triple-bottom-line approach has
increased economic profit while
reducing social and
environmental loses.
IKEA triple-bottom-line approach
consists from:
Economy/Profit -3.5 billion profit
Ecology/Planet-100% renewable
energy by 2020
Equity/People- 155.000
employees, 48% of the managers
are females
“sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own needs.”
(UCLA, 2016)
• 1500 (978, furniture) suppliers in 50 countries, has trading
agreements such as IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable
and suppliers audited-16.1 million m3 of wood used in 2015
• 1997 new particle material, the use of raw material was
reduced by 85,816 tons, 2,800 less trucks for transportation
due to lower cargo weight, easier handling of the
merchandise for the customers and reduced costs and
prices.
• Cotton - grown in a more sustainable way, less pesticides
by 50%, fertilizer's by 30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-
free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in
Russia from 3.3 million to 20 million hectares
• 9,500 hectares of forest have been replanted with native
tree species
• Water reductions plans-micro watersheds in India
HOW IKEA DISTRIBUTION CHANNELS WORKS
The process of distribution in IKEA is carefully design and coordinated through division of labor. For
example:
Store distribution manager: The store distribution manager examines the supply chain, ensuring
distribution centres can house the volume of goods required by stores.
Customer distribution manager: The customer distribution manager is responsible for working and
developing the order distribution business, from warehouse to customer.
Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA
and its carriers, guaranteeing an effective flow of goods
Warehouse operations manager: The warehouse operations manager ensures proficiency within the
distribution centres and reacts to the needs of the supply chain.
The quality manager is responsible for quality control in the warehouse and efficiency of supply to the
customer.
Transport business developer: The transport business developer builds and maintains relationships
between IKEA and its carriers whilst negotiating mutually beneficial transport scenarios.
Goods flow coordinator: The goods flow coordinator secures the maximum product availability to the
customer with the lowest possible supply chain costs.
IKEA strive to see a huge percentage of all freight within Europe moved by rail.
For some years now, all the freight companies working with IKEA have been mandated to provide
statistics for a so called “Environmental Performance Sheet “a detailed document explaining how
their operations impact on the environment. This allows IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to cut down on the use of
fuel to minimize C02 emission.
IKEA is considering another ways it can provide end-to-end supply chain solutions and one idea is to
take returned products and recycle them into other products that means consumers can now return
plastics, batteries, furniture,compact fluorescent light bulbs, mattress, and textiles to the store.
Better efficiency and maximum space utilization
Large volumes; Flat packages; Low costs; Low CO2 emissions.
Efficiency is crucial to the IKEA business strategy, and this is reflected in the way the design their
product range and shipments to minimize the number of journeys and distances travelled. Packaging
and the way products are packed into vehicles can have a big impact on the efficiency of transport
because the more products they can fit into a container, the fewer journeys they need to make.
Thereby lowering distribution costs and CO2 emissions. The rationale behind this, is to minimize the
impact this part of their business has on the environment.
Renewable Energy
IKEA 768,972-square-foot PV array comprises of a 2,674.9-kW system, constructed with 18,576 panels,
and is the state’s largest rooftop array. The IKEA distribution center will generate roughly 3,397,178
kWh of clean electricity yearly, the equivalent of reducing 2,397 tons of carbon dioxide (CO2),
eradicating the emissions of 499 cars or powering 359 homes yearly. These will be consistent with the
company’s objective of being energy independent by 2020, IKEA has installed more than 250,000 solar
panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
Charging station
As part of IKEA’s commitment to renewable energy, the company are presently installing electric
vehicle rapid charging points across all of their UK stores to complement the existing
IKEA REVERSE LOGISTICS
06/07/2016 Radu Acalfoaie 8

9. Manufacturing at Ikea
06/07/2016 Radu Acalfoaie9
An object with
great form and
function that ages
beautifully and is
sustainable - then
top that off with a
low price.

10. IKEA is A Making Machine
• 44 Production Plants in 11 Countries
• 2500 new Products Yearly, 9,500 Catalogue Products
• Design for manufacture assisted by Home Visits
• Grow by using own resources. Earn money first.
• Manufacturing is Customer Focused, Home Visits.
• Elimination of waste, reduction of materials & energy
consumption
06/07/2016 Radu Acalfoaie10
The main challenge for
IKEA can it be packed flat,
transported, assembled,
used and potentially
dissembled again?

11. Democratic Design Centre
• “Moving ideas forward into physical
samples“
• 20 Designers collaborate with India &
China
• Also freelance and specialists.
• Array of tools and processes. F.W. Taylors
Dream Company come true.
• ½ products are first produced by 3D
Printer.
• Fortus 900MC -- has a build space that
allows whole chairs to be prototyped
06/07/2016 Radu Acalfoaie11

12. Manufacturing Waste- What Waste?
VÅLLÖ water can is
stackable, an optimal
amount of water cans in
each truck load.
Made of recyclable
polypropylene and
wood fibres from sawmill
waste.
IKEA 365+ RISP uses
lyocell, an
environmentally-
friendly alternative
to cotton.
IKEA PS JORDBRO
is made of recycled
milk packages and
baby dippers.
06/07/2016 Radu Acalfoaie12

13. A SUSTAINABLE SUPPLY CHAIN
The Green Team
Radu Acalfoaie, Siobhan Flynn, Bob Ibeh, Paul McMahon
SCM & SUSTAINABILITY DEVELOPMENT DISTRIBUTION RETAIL
TAKING RESPONSIBILITY FOR PEOPLE & THE ENVIRONMENTRAW MATERIALS
MANUFACTURING
DEMOCRATIC DESIGN CENTRE
OPTIONAL
LOGO HERE
OPTIONAL
LOGO HERE
• IKEA offers customers inspiring solutions for their homes at accessible prices. The
customer is the creator – self assembled furniture generates value for the customer.
• Energy efficient stores, from solar panels used to power many IKEA stores around the
world to ensuring that more than half of the energy used in stores comes from renewable
sources, IKEA are striving towards total energy efficiency.
• IKEA offers an Innovative retail & warehousing solution. By consolidating these two
functions under one roof, IKEA has cleverly reduced or removed activities, costs, & waste
associated with assembly, raw materials, storage, & shipping helping to shrink their
environmental footprint.
• Waste management is vital across all of IKEA stores, where up to 15 categories of waste
are sorted and 90% of all waste is recycled or used for energy production.
• IKEA wants to make recycling & waste disposal easier for their customers as well by
providing customers with the opportunity to return & sort waste, such as batteries &
fluorescent lights.
• A sustainable life at home - offering customers smart products & services to help
customers live more sustainably is key. Energy consuming products, such as white
goods & lights are 50% more energy efficient than the average product on the market.
• Room settings offer customers a visual understanding of how their products work, their
features & benefits, and help to demonstrate how they can help the customer live a more
sustainable life.
Why choose between sustainability, style, function, & price?
At IKEA, you don’t have to!
▪ 1.1 million square meters of selling
space being used sustainably
▪ 884 million store visits annually
▪ 375 stores worldwide
▪ IKEA’s unique retailing model means
that their customers become a part of
their supply chain as they journey
through any IKEA store.
From 3D printed chairs to evolved kitchens, the
world’s biggest furniture retailer is reassembling
the future.
● Sophisticated and efficient supply chain.
F.W.Taylors Time and Motion Dream Company
seamless transition of efficiency into profit . This is
how IKEAS manufacturing process was described
in Wired magazine.(Bell 2015)
● The main challenge with manufacturing is simple.
Can it be flat packed, transported, assembled, and
disassembled again
● Marcus Engman This is where the magic happens, The Democratic Design
Centre is located at Älmhult and co-ordinates with design centres in India and
China.
● 2000New Products Every Year, 59% Made in Europe.
● Imagine having a 3D printer with the space and capacity to reproduce a chair.
IKEA have this. Actually nearly half of all products are 3D printed before going to
manufacturing process. This combined with the latest advances in material and
manufacturing/ assembly techniques is all focused towards the customer!
● 200 - 300 New Ideas Every Week. Narrowed down to 35.
● IKEA want very Production Line Running at Full Efficiency.
BEFORE AFTER BEFORE AFTER
• Supplier selection based on
environmental profile such as ISO
14000 & Energy consumption ISO
50001
• Cooperation with suppliers to
reduce pollution & waste
• Increased focus on ecological
transport mode selection
• Sustainable acquisition of raw
materials
• Invest in renewable energy
• Reducing of packaging
• Sharing information
• Innovation
MANUFACTURING WASTE – WHAT WASTE?
ENVIRONMENTAL MEASURES PEOPLE & PLANET POSITIVE
At IKEA, the idea of sustainability is engrained
in to its corporate identity, not only in their
supply chain practices but across the entire
organization. Sustainability does not end at
production but follows through to logistics,
retail, and even the end user. People & Planet
Positive is IKEA’s ethos and their
sustainability directive.
Manufacturing at IKEA doesn’t stop at the finished product, it is a 360
degree process. Raw material is used, products are produced, then any
waste becomes the raw materials and produces more products. Ikea also
supply drop off areas at stores for waste which they recycle. Damaged
products are used to repair other products or repaired and sold off cheap.
Here are some examples made from waste, including used baby dipers
and saw dust
A triple-bottom-line approach has
increased economic profit while
reducing social and
environmental loses.
IKEA triple-bottom-line approach
consists from:
Economy/Profit -3.5 billion profit
Ecology/Planet-100% renewable
energy by 2020
Equity/People- 155.000
employees, 48% of the managers
are females
“sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own needs.”
(UCLA, 2016)
• 1500 (978, furniture) suppliers in 50 countries, has trading
agreements such as IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable
and suppliers audited-16.1 million m3 of wood used in 2015
• 1997 new particle material, the use of raw material was
reduced by 85,816 tons, 2,800 less trucks for transportation
due to lower cargo weight, easier handling of the
merchandise for the customers and reduced costs and
prices.
• Cotton - grown in a more sustainable way, less pesticides
by 50%, fertilizer's by 30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-
free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in
Russia from 3.3 million to 20 million hectares
• 9,500 hectares of forest have been replanted with native
tree species
• Water reductions plans-micro watersheds in India
HOW IKEA DISTRIBUTION CHANNELS WORKS
The process of distribution in IKEA is carefully design and coordinated through division of labor.
The store distribution manager examines the supply chain, ensuring distribution centres can house the
volume of goods required by stores.
The customer distribution manager is responsible for working and developing the order distribution
business, from warehouse to customer.
Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA
and its carriers, guaranteeing an effective flow of goods
The warehouse operations manager ensures proficiency within the distribution centres and reacts to
the needs of the supply chain.
The quality manager is responsible for quality control in the warehouse and efficiency of supply to the
customer.
The transport business developer builds and maintains relationships between IKEA and its carriers
whilst negotiating mutually beneficial transport scenarios.
The goods flow coordinator secures the maximum product availability to the customer with the lowest
possible supply chain costs.
IKEA strive to see a huge percentage of all freight within Europe moved by rail.
For some years now, all the freight companies working with IKEA have been mandated to provide
statistics for a so called “Environmental Performance Sheet “a detailed document explaining how
their operations impact on the environment. This allows IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to cut down on the use of
fuel to minimize C02 emission.
IKEA is considering another ways it can provide end-to-end supply chain solutions and one idea is to
take returned products and recycle them into other products that means consumers can now return
plastics, batteries, furniture,compact fluorescent light bulbs, mattress, and textiles to the store.
Better efficiency and maximum space utilization
Large volumes; Flat packages; Low costs; Low CO2 emissions.
Efficiency is crucial to the IKEA business strategy, and this is reflected in the way the design their
product range and shipments to minimize the number of journeys and distances travelled. Packaging
and the way products are packed into vehicles can have a big impact on the efficiency of transport
because the more products they can fit into a container, the fewer journeys they need to make.
Thereby lowering distribution costs and CO2 emissions. The rationale behind this, is to minimize the
impact this part of their business has on the environment.
Renewable Energy
IKEA 768,972-square-foot PV array comprises of a 2,674.9-kW system, constructed with 18,576 panels,
and is the state’s largest rooftop array. The IKEA distribution center will generate roughly 3,397,178
kWh of clean electricity yearly, the equivalent of reducing 2,397 tons of carbon dioxide (CO2),
eradicating the emissions of 499 cars or powering 359 homes yearly. These will be consistent with the
company’s objective of being energy independent by 2020, IKEA has installed more than 250,000 solar
panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
Charging station
As part of IKEA’s commitment to renewable energy, the company are presently installing electric
vehicle rapid charging points across all of their UK stores to complement the existing
IKEA REVERSE LOGISTICS
06/07/2016 Radu Acalfoaie 13

14. Focus On The Environmentally Friendly
• For some years now, all the freight companies working
with IKEA have been mandated to provide statistics for a
so called “Environmental Performance Sheet “a detailed
document explaining how their operations impact on the
environment.
• IKEA similarly reduces logistics cost by having customers
as part of their supply chain.
• IKEA is considering other ways to provide end-to-end
supply chain solutions and one idea is to take returned
products and recycle them into other products that means
consumers can now return plastics, batteries, furniture,
compact fluorescent light bulbs, mattress, and textiles to
the store.
• Customers gather their furniture from self-serve area
without long waits, including an option for renting free
cycle + trailer and assemble the furniture themselves when
they get home.
06/07/2016 Radu Acalfoaie14

15. How IKEA Distribution Channels Work
The process of distribution in IKEA is carefully design and coordinated through division of labour:
• The store distribution manager examines the supply chain, ensuring distribution centres can house the volume of
goods required by stores.
• The customer distribution manager is responsible for working and developing the order distribution business, from
warehouse to customer.
• Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA and its
carriers, guaranteeing an effective flow of goods
• The warehouse operations manager ensures proficiency within the distribution centres and reacts to the needs of
the supply chain.
• The quality manager is responsible for quality control in the warehouse and efficiency of supply to the customer.
• The transport business developer builds and maintains relationships between IKEA and its carriers whilst
negotiating mutually beneficial transport scenarios.
• The goods flow coordinator secures the maximum product availability to the customer with the lowest possible
supply chain costs.
06/07/2016 Radu Acalfoaie15

16. Better Efficiency And Maximum Space
Utilization
1. Packaging and the way products are packed into vehicles
can have a big impact on the efficiency of transport because
the more products they can fit into a container, the fewer
journeys they need to make.
2. The fewer journeys they make, the lower distribution costs
and CO2 emissions.
3. IKEA strive to see a huge percentage of all freight within
Europe moved by rail.
4. Efficiency is crucial to the IKEA sustainable business
strategy:
• Large volumes
• Flat packages
• Low costs.
• Low CO2 emissions
06/07/2016 Radu Acalfoaie16

17. Renewable Energy
• The IKEA distribution center will
produce approximately 3,397,178 kWh of
clean electricity annually, the equivalent
of reducing 2,397 tons of carbon dioxide
(CO2), eliminating the emissions of 499
cars or powering 359 homes yearly.
• The company’s goal is to be energy
independent by 2020.
• IKEA has installed more than 250,000
solar panels on buildings across the world
and owns/operates approximately 110
wind turbines in Europe.
• Charging point for Electric Cars
06/07/2016 Radu Acalfoaie17

18. A SUSTAINABLE SUPPLY CHAIN
The Green Team
Radu Acalfoaie, Siobhan Flynn, Bob Ibeh, Paul McMahon
SCM & SUSTAINABILITY DEVELOPMENT DISTRIBUTION RETAIL
TAKING RESPONSIBILITY FOR PEOPLE & THE ENVIRONMENTRAW MATERIALS
MANUFACTURING
DEMOCRATIC DESIGN CENTRE
OPTIONAL
LOGO HERE
OPTIONAL
LOGO HERE
• IKEA offers customers inspiring solutions for their homes at accessible prices. The
customer is the creator – self assembled furniture generates value for the customer.
• Energy efficient stores, from solar panels used to power many IKEA stores around the
world to ensuring that more than half of the energy used in stores comes from renewable
sources, IKEA are striving towards total energy efficiency.
• IKEA offers an Innovative retail & warehousing solution. By consolidating these two
functions under one roof, IKEA has cleverly reduced or removed activities, costs, & waste
associated with assembly, raw materials, storage, & shipping helping to shrink their
environmental footprint.
• Waste management is vital across all of IKEA stores, where up to 15 categories of waste
are sorted and 90% of all waste is recycled or used for energy production.
• IKEA wants to make recycling & waste disposal easier for their customers as well by
providing customers with the opportunity to return & sort waste, such as batteries &
fluorescent lights.
• A sustainable life at home - offering customers smart products & services to help
customers live more sustainably is key. Energy consuming products, such as white
goods & lights are 50% more energy efficient than the average product on the market.
• Room settings offer customers a visual understanding of how their products work, their
features & benefits, and help to demonstrate how they can help the customer live a more
sustainable life.
Why choose between sustainability, style, function, & price?
At IKEA, you don’t have to!
▪ 1.1 million square meters of selling
space being used sustainably
▪ 884 million store visits annually
▪ 375 stores worldwide
▪ IKEA’s unique retailing model means
that their customers become a part of
their supply chain as they journey
through any IKEA store.
From 3D printed chairs to evolved kitchens, the
world’s biggest furniture retailer is reassembling
the future.
● Sophisticated and efficient supply chain.
F.W.Taylors Time and Motion Dream Company
seamless transition of efficiency into profit . This is
how IKEAS manufacturing process was described
in Wired magazine.(Bell 2015)
● The main challenge with manufacturing is simple.
Can it be flat packed, transported, assembled, and
disassembled again
● Marcus Engman This is where the magic happens, The Democratic Design
Centre is located at Älmhult and co-ordinates with design centres in India and
China.
● 2000 New Products Every Year, 59% Made in Europe.
● Imagine having a 3D printer with the space and capacity to reproduce a chair.
IKEA have this. Actually nearly half of all products are 3D printed before going to
manufacturing process. This combined with the latest advances in material and
manufacturing/ assembly techniques is all focused towards the customer!
● 200 - 300 New Ideas Every Week. Narrowed down to 35.
● IKEA want very Production Line Running at Full Efficiency.
BEFORE AFTER BEFORE AFTER
• Supplier selection based on
environmental profile such as ISO
14000 & Energy consumption ISO
50001
• Cooperation with suppliers to
reduce pollution & waste
• Increased focus on ecological
transport mode selection
• Sustainable acquisition of raw
materials
• Invest in renewable energy
• Reducing of packaging
• Sharing information
• Innovation
MANUFACTURING WASTE – WHAT WASTE?
ENVIRONMENTAL MEASURES PEOPLE & PLANET POSITIVE
At IKEA, the idea of sustainability is engrained
in to its corporate identity, not only in their
supply chain practices but across the entire
organization. Sustainability does not end at
production but follows through to logistics,
retail, and even the end user. People & Planet
Positive is IKEA’s ethos and their
sustainability directive.
Manufacturing at IKEA doesn’t stop at the finished product, it is a 360
degree process. Raw material is used, products are produced, then any
waste becomes the raw materials and produces more products. Ikea also
supply drop off areas at stores for waste which they recycle. Damaged
products are used to repair other products or repaired and sold off cheap.
Here are some examples made from waste, including used baby dipers
and saw dust
A triple-bottom-line approach has
increased economic profit while
reducing social and
environmental loses.
IKEA triple-bottom-line approach
consists from:
Economy/Profit -3.5 billion profit
Ecology/Planet-100% renewable
energy by 2020
Equity/People- 155.000
employees, 48% of the managers
are females
“sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own needs.”
(UCLA, 2016)
• 1500 (978, furniture) suppliers in 50 countries, has trading
agreements such as IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable
and suppliers audited-16.1 million m3 of wood used in 2015
• 1997 new particle material, the use of raw material was
reduced by 85,816 tons, 2,800 less trucks for transportation
due to lower cargo weight, easier handling of the
merchandise for the customers and reduced costs and
prices.
• Cotton - grown in a more sustainable way, less pesticides
by 50%, fertilizer's by 30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-
free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in
Russia from 3.3 million to 20 million hectares
• 9,500 hectares of forest have been replanted with native
tree species
• Water reductions plans-micro watersheds in India
HOW IKEA DISTRIBUTION CHANNELS WORKS
The process of distribution in IKEA is carefully design and coordinated through division of labor. For
example:
Store distribution manager: The store distribution manager examines the supply chain, ensuring
distribution centres can house the volume of goods required by stores.
Customer distribution manager: The customer distribution manager is responsible for working and
developing the order distribution business, from warehouse to customer.
Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA
and its carriers, guaranteeing an effective flow of goods
Warehouse operations manager: The warehouse operations manager ensures proficiency within the
distribution centres and reacts to the needs of the supply chain.
The quality manager is responsible for quality control in the warehouse and efficiency of supply to the
customer.
Transport business developer: The transport business developer builds and maintains relationships
between IKEA and its carriers whilst negotiating mutually beneficial transport scenarios.
Goods flow coordinator: The goods flow coordinator secures the maximum product availability to the
customer with the lowest possible supply chain costs.
IKEA strive to see a huge percentage of all freight within Europe moved by rail.
For some years now, all the freight companies working with IKEA have been mandated to provide
statistics for a so called “Environmental Performance Sheet “a detailed document explaining how
their operations impact on the environment. This allows IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to cut down on the use of
fuel to minimize C02 emission.
IKEA is considering another ways it can provide end-to-end supply chain solutions and one idea is to
take returned products and recycle them into other products that means consumers can now return
plastics, batteries, furniture,compact fluorescent light bulbs, mattress, and textiles to the store.
Better efficiency and maximum space utilization
Large volumes; Flat packages; Low costs; Low CO2 emissions.
Efficiency is crucial to the IKEA business strategy, and this is reflected in the way the design their
product range and shipments to minimize the number of journeys and distances travelled. Packaging
and the way products are packed into vehicles can have a big impact on the efficiency of transport
because the more products they can fit into a container, the fewer journeys they need to make.
Thereby lowering distribution costs and CO2 emissions. The rationale behind this, is to minimize the
impact this part of their business has on the environment.
Renewable Energy
IKEA 768,972-square-foot PV array comprises of a 2,674.9-kW system, constructed with 18,576 panels,
and is the state’s largest rooftop array. The IKEA distribution center will generate roughly 3,397,178
kWh of clean electricity yearly, the equivalent of reducing 2,397 tons of carbon dioxide (CO2),
eradicating the emissions of 499 cars or powering 359 homes yearly. These will be consistent with the
company’s objective of being energy independent by 2020, IKEA has installed more than 250,000 solar
panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
Charging station
As part of IKEA’s commitment to renewable energy, the company are presently installing electric
vehicle rapid charging points across all of their UK stores to complement the existing
IKEA REVERSE LOGISTICS
06/07/2016 Radu Acalfoaie 18

19. Retail &
The Sustainable
Supply Chain
06/07/2016 Radu Acalfoaie19

20. IKEA
375 Stores
Globally
884
Million
store visits
€33.8
billion
retail sales
1.1 million
sq meters
of retail
space
172,000
IKEA
employees
Retail Data 2015
06/07/2016 Radu Acalfoaie 20

21. • Innovating Sustainable
Retailing & Logistics
Models
• Customers do not have
to choose between
sustainability, quality,
style, function, or price
06/07/2016 Radu Acalfoaie 21
The Sustainable Store Journey

22. inspiring
solutions,
low prices
sustainable
life at home
waste
management
innovative
retail &
warehousing
solution
energy
efficient
stores
People & Planet
Positive
06/07/2016 Radu Acalfoaie 22

23. A SUSTAINABLE SUPPLY CHAIN
The Green Team
Radu Acalfoaie, Siobhan Flynn, Bob Ibeh, Paul McMahon
SCM & SUSTAINABILITY DEVELOPMENT DISTRIBUTION RETAIL
TAKING RESPONSIBILITY FOR PEOPLE & THE ENVIRONMENTRAW MATERIALS
MANUFACTURING
DEMOCRATIC DESIGN CENTRE
OPTIONAL
LOGO HERE
OPTIONAL
LOGO HERE
• IKEA offers customers inspiring solutions for their homes at accessible prices. The
customer is the creator – self assembled furniture generates value for the customer.
• Energy efficient stores, from solar panels used to power many IKEA stores around the
world to ensuring that more than half of the energy used in stores comes from renewable
sources, IKEA are striving towards total energy efficiency.
• IKEA offers an Innovative retail & warehousing solution. By consolidating these two
functions under one roof, IKEA has cleverly reduced or removed activities, costs, & waste
associated with assembly, raw materials, storage, & shipping helping to shrink their
environmental footprint.
• Waste management is vital across all of IKEA stores, where up to 15 categories of waste
are sorted and 90% of all waste is recycled or used for energy production.
• IKEA wants to make recycling & waste disposal easier for their customers as well by
providing customers with the opportunity to return & sort waste, such as batteries &
fluorescent lights.
• A sustainable life at home - offering customers smart products & services to help
customers live more sustainably is key. Energy consuming products, such as white
goods & lights are 50% more energy efficient than the average product on the market.
• Room settings offer customers a visual understanding of how their products work, their
features & benefits, and help to demonstrate how they can help the customer live a more
sustainable life.
Why choose between sustainability, style, function, & price?
At IKEA, you don’t have to!
▪ 1.1 million square meters of selling
space being used sustainably
▪ 884 million store visits annually
▪ 375 stores worldwide
▪ IKEA’s unique retailing model means
that their customers become a part of
their supply chain as they journey
through any IKEA store.
From 3D printed chairs to evolved kitchens, the
world’s biggest furniture retailer is reassembling
the future.
● Sophisticated and efficient supply chain.
F.W.Taylors Time and Motion Dream Company
seamless transition of efficiency into profit . This is
how IKEAS manufacturing process was described
in Wired magazine.(Bell 2015)
● The main challenge with manufacturing is simple.
Can it be flat packed, transported, assembled, and
disassembled again
● Marcus Engman This is where the magic happens, The Democratic Design
Centre is located at Älmhult and co-ordinates with design centres in India and
China.
● 2000 New Products Every Year, 59% Made in Europe.
● Imagine having a 3D printer with the space and capacity to reproduce a chair.
IKEA have this. Actually nearly half of all products are 3D printed before going to
manufacturing process. This combined with the latest advances in material and
manufacturing/ assembly techniques is all focused towards the customer!
● 200 - 300 New Ideas Every Week. Narrowed down to 35.
● IKEA want very Production Line Running at Full Efficiency.
BEFORE AFTER BEFORE AFTER
• Supplier selection based on
environmental profile such as ISO
14000 & Energy consumption ISO
50001
• Cooperation with suppliers to
reduce pollution & waste
• Increased focus on ecological
transport mode selection
• Sustainable acquisition of raw
materials
• Invest in renewable energy
• Reducing of packaging
• Sharing information
• Innovation
MANUFACTURING WASTE – WHAT WASTE?
ENVIRONMENTAL MEASURES PEOPLE & PLANET POSITIVE
At IKEA, the idea of sustainability is engrained
in to its corporate identity, not only in their
supply chain practices but across the entire
organization. Sustainability does not end at
production but follows through to logistics,
retail, and even the end user. People & Planet
Positive is IKEA’s ethos and their
sustainability directive.
Manufacturing at IKEA doesn’t stop at the finished product, it is a 360
degree process. Raw material is used, products are produced, then any
waste becomes the raw materials and produces more products. Ikea also
supply drop off areas at stores for waste which they recycle. Damaged
products are used to repair other products or repaired and sold off cheap.
Here are some examples made from waste, including used baby dippers
and saw dust
A triple-bottom-line approach has
increased economic profit while
reducing social and
environmental loses.
IKEA triple-bottom-line approach
consists from:
Economy/Profit -3.5 billion profit
Ecology/Planet-100% renewable
energy by 2020
Equity/People- 155.000
employees, 48% of the managers
are females
“sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own needs.”
(UCLA, 2016)
• 1500 (978, furniture) suppliers in 50 countries, has trading
agreements such as IWAY and industry standard
• Get the most of every tree , wood is harvested sustainable
and suppliers audited-16.1 million m3 of wood used in 2015
• 1997 new particle material, the use of raw material was
reduced by 85,816 tons, 2,800 less trucks for transportation
due to lower cargo weight, easier handling of the
merchandise for the customers and reduced costs and
prices.
• Cotton - grown in a more sustainable way, less pesticides
by 50%, fertilizer's by 30% and less water
• 87% of palm oil was from certified, segregated sources
• 5.1 million m2 of leather, and 88% of this was chromium-
free
• 1992-banned the use of Freon's to preserve the ozone
• Partners with WWF - increase the certified forest areas in
Russia from 3.3 million to 20 million hectares
• 9,500 hectares of forest have been replanted with native
tree species
• Water reductions plans-micro watersheds in India
HOW IKEA DISTRIBUTION CHANNELS WORKS
The process of distribution in IKEA is carefully design and coordinated through division of labor. For
example:
Store distribution manager: The store distribution manager examines the supply chain, ensuring
distribution centres can house the volume of goods required by stores.
Customer distribution manager: The customer distribution manager is responsible for working and
developing the order distribution business, from warehouse to customer.
Transport operational coordinator: The transport operational coordinator is the fulcrum between IKEA
and its carriers, guaranteeing an effective flow of goods
Warehouse operations manager: The warehouse operations manager ensures proficiency within the
distribution centres and reacts to the needs of the supply chain.
The quality manager is responsible for quality control in the warehouse and efficiency of supply to the
customer.
Transport business developer: The transport business developer builds and maintains relationships
between IKEA and its carriers whilst negotiating mutually beneficial transport scenarios.
Goods flow coordinator: The goods flow coordinator secures the maximum product availability to the
customer with the lowest possible supply chain costs.
IKEA strive to see a huge percentage of all freight within Europe moved by rail.
For some years now, all the freight companies working with IKEA have been mandated to provide
statistics for a so called “Environmental Performance Sheet “a detailed document explaining how
their operations impact on the environment. This allows IKEA to keep a check on these companies’
environmental work and to. monitor what measures they are introducing to cut down on the use of
fuel to minimize C02 emissions.
IKEA is considering another ways it can provide end-to-end supply chain solutions and one idea is to
take returned products and recycle them into other products that means consumers can now return
plastics, batteries, furniture,compact fluorescent light bulbs, mattress, and textiles to the store.
Better efficiency and maximum space utilization
Large volumes; Flat packages; Low costs; Low CO2 emissions.
Efficiency is crucial to the IKEA business strategy, and this is reflected in the way the design their
product range and shipments to minimize the number of journeys and distances travelled. Packaging
and the way products are packed into vehicles can have a big impact on the efficiency of transport
because the more products they can fit into a container, the fewer journeys they need to make.
Thereby lowering distribution costs and CO2 emissions. The rationale behind this, is to minimize the
impact this part of their business has on the environment.
Renewable Energy
IKEA 768,972-square-foot PV array comprises of a 2,674.9-kW system, constructed with 18,576 panels,
and is the state’s largest rooftop array. The IKEA distribution center will generate roughly 3,397,178
kWh of clean electricity yearly, the equivalent of reducing 2,397 tons of carbon dioxide (CO2),
eradicating the emissions of 499 cars or powering 359 homes yearly. These will be consistent with the
company’s objective of being energy independent by 2020, IKEA has installed more than 250,000 solar
panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
Charging station
As part of IKEA’s commitment to renewable energy, the company are presently installing electric
vehicle rapid charging points across all of their UK stores to complement the existing
IKEA REVERSE LOGISTICS
06/07/2016 Radu Acalfoaie 23

24. Conclusion
• Renewable energy 53.4% of 2015
consumption.
• Carbon emissions from transport
were 27.2% lower than in 2011.
• 88.9% of waste was recycled or
energy recovered.
• By promoting sustainability,
make more for less and do it
yourself concepts IKEA,
improved SCM and reduced
their overall CO2 and the
benefits are transmitted back to
the customer.
06/07/2016 Radu Acalfoaie24
Thank you for watching!