The Study On Supply Chain Operation System Of IKEA (China)

On the furniture & furnishing market in China, the leading company must be IKEA from Sweden. This furniture giant in the global market had experienced very slow business development in China over the first 7 years when it entered China market in 1998. To be happy to know, it starts to speed up its expansion in China from now on. However, the Chinese competitors have grown up quickly in the past few years. If IKEA wants to have the majority market share in China or even extending to the whole Asia Pacific market, it has to build up its own high efficient supply chain to overall control the supply chain operation throughout the region.This article will focus on current market environment and development opportunity which IKEA is facing, by using supply chain management theory to optimize the company's supply chain system. By analyzing IKEA supply chain strategy (including pricing, sales forecast, purchasing, distribution and high flow/low flow strategy), and supply chain controlling process (including purchasing, inventory control and distribution network setup), I understand the advantage of IKEA supply chain and existing problems. With related supporting theory, I propose some inventory management method and system consolidation idea to make a balance between service level and stock level, and to solve current problem of high stock level and high cost in the IKEA supply chain.