IKEA Inventory Management 

IKEA is the world’s leading retail furniture brand, and the company has been operating its business since 1943. The furniture brand deals with a vast variety of stock, and the row of boxes is as high as the person can’t reach. Well-organized arrangement of stock must surprise and wonder anyone with feelings of awe about the company’s inventory and supply chain management. Today, we’ll discuss IKEA inventory management; key statistical facts and figures, how it works; and strategies.

Some of the main products and services of IKEA are as follows;

  • Food items
  • Homeware
  • Ready-to-assemble furniture
  • Smart furniture for modern houses

Key statistical facts and figures about IKEA are as follows;

  • The web portfolio of the brand offers more than 12000 products
  • E-commerce platform of the company has more than 2.1 billion visitors from 2015 to 2016
  • Annual revenue of the furniture brand in 2022 was 41.9 billion Euros
  • Out of which, the net income of the company was 7.1 billion Euros
  • IKEA has a network of more than 455 stores in over 50 countries worldwide
  • The brand is serving North Africa, Oceania, Asia, the Middle East, South America, North America, and the European Market
  • Over 231,000 employees are working for the company

How IKEA Inventory Management Works 

Let’s discuss how IKEA inventory management works, some points are as follows;

Unique Packaging

The design of IKEA’s furniture is in small and separate pieces, and customers can easily fit those pieces together. The company could easily transport and ship those pieces in flat packages at a very low cost. It is because those pieces take up low space in the trucks and warehouses, and allow transporters to ship maximum packages in one trip.

Inventory System

IKEA employs inventory and WMS system, the logistics managers are aware of the sold furniture with POS data. It also informs them how much inventory would reach stores with direct shipment from distribution centers with WMS data. However, it allows them to predict the sale for the next few days and weeks and order the most relevant items to meet the customers’ demands.

Store inside Warehouse

IKEA builds its stores inside the warehouse to secure the stock, and it allows customers to easily find their products by following the self-service method. It decreases the stock items in the bulky storage area. After finalizing the list of items and products on the products, customers could easily find their furniture pieces; because every item in the store has a specific code and it guides customers to find the relevant items in the warehouses.

Low Product Movement

Every time the product is shipped, moved, and loaded or unloaded, it increases the cost and time. The focus of IKEA is to decrease the total number of times product movement, shipment, and loading or unloading. As a result, it decreases the overall cost to the company.

IKEA Inventory Management Strategies 

Some of the main methods and strategies of IKEA inventory management are as follows;

Furniture Design

According to an estimate, approximately 50% of the product material is from recycled and sustainable product items. IKEA focuses on employing the limited materials possible without jeopardizing durability and quality. Limited usage of the material decreases transportation costs because it requires limited materials and manpower for the shipment of products.

In-Store Logistics

IKEA depends on the method of logistical management of reordering products. It allows the company to employ in-store employees to manage the inventory of the store. However, it requires you to evaluate the duties and responsibilities of employees by analyzing the following;

  • Checking delivery
  • Overstock location
  • Right sales area
  • Organizing the separate goods

They should ensure the efficient movement of goods within the store is necessary to maintain high customer loyalty and increase sales.

High & Low Flow of Warehouse

High-flow facilities and low-flow warehouse employees to support the operations of the IKEA stores. In the high-flow warehouse, IKEA uses the automated retrieval and storage system to decrease the product carrying cost. The demand for the product stocked in the low-flow facility is not high, and operations heavily depend on the manual processes.

IKEA is following the world’s most successful strategies in the retail furniture industry, and it helps the company to have high product demand and low operational costs. It helps the company to remain competitive in the industry as it finds more advanced methods to streamline its SCM operations.

Relationships with Suppliers

The credit of IKEA’s worldwide growth and success goes to open communication and establishing relationships with suppliers and vendors. The company promotes competition among supplies to make sure the best quality material is at the negotiated price. However, the brand also focuses on establishing long-term relationships and signing contracts.

Conclusion: IKEA Inventory Management 

After an in-depth study of IKEA inventory management; we have realized that IKEA is the world’s leading furniture retail brand with a sophisticated inventory system. If you are learning about the inventory and warehouse management system of the furniture brand, then you should keep in mind the abovementioned strategies and elements.

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