Notes

Maria Ann Lyka Jose
Hw#4
AR304 9/5/17

Industry: IKEA
Industry's Background:
Ikea is a multinational group, headquartered in the Netherlands, that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories. It has been the world's largest furniture retailer since at least 2008.The company is known for its modernist designs for various types of appliances and furniture, and its interior design work is often associated with an eco-friendly simplicity. (https://en.wikipedia.org/wiki/IKEA)
Greening Inbound Logistics:
The primary sector involves the development of the raw materials. IKEA designs its own products in Sweden.IKEA uses a tool - the ‘e-Wheel’ - to evaluate the environmental impact of its products. • The e-Wheel helps IKEA to analyze the four stages within the life of a product. • This also helps suppliers improve their understanding of the environmental impact of the products they are supplying.
Greening Production:
IKEA creates many design solutions to minimize the use of materials. For example, – some tables are made out of recycled plastic – some rugs are made of material clippings that would otherwise be wasted – products such as water cans are designed to be stacked. Approximately 50% of IKEA’s 9,500 products are made from wood or wood fibers. This is a good resource as long as it comes from sustainable sources. It can be recycled and is a renewable resource.During manufacturing IKEA specifies to its producers that waste should be avoided. • Where waste does occur IKEA encourages suppliers to try to use it in the manufacture of other products. • IKEA has a code of conduct called the IKEA Way of Purchasing Home Furnishing Products (IWAY). • This contains minimum rules and guidelines that help manufacturers to reduce the impact of their activities on the environment. • The IWAY code complies with international legislation.
Greening Outbound Logistics:
Large volumes + flat packs = low costs .The fact that IKEA products are sold packed flat means that they can be transported with greater efficiency. By minimizing “wasted space” it is possible to transport and store more packages at a time, i.e., the cost of transporting each item goes down. IKEA works in various ways not only to rationalize and simplify distribution, but also to minimize the impact this part of the business has on the environment. • The secret is to calculate as exactly as possible how many products will be needed to satisfy demand.
Greening Reverse Logistics:
IKEA creates many design solutions to minimise the use of materials. For example, – some tables are made out of recycled plastic – some rugs are made of material clippings that would otherwise be wasted.Dissatisfied customers of IKEA can return their purchases through a collection centre located at every city that has an IKEA store, which in turn checks and sends it to the distribution centre that provided this product. The product is further sent to the focal firm in Sweden which recycles the product and re-distributes it again through the supply chain. • According to a study conducted at IKEA, it is reported that about 70% of the products returned to IKEA are recycled, and the remaining 30% goes into disposal.
https://www.slideshare.net/roymanish91/ikea-supply-chain-mangament
The SKRUTT solution;
It starts as ‘scrap’ from the plastic film used to protect IKEA products during transit."We collect discarded polyethylene film into bales which are sorted, cleaned, and fed into a grinder. The ground-up plastic is then washed, dried, melted together, and pressed through a mesh that removes any remaining impurities. The result is long, spaghetti-like strands of plastic, which are cut into pellets. These pellets are the ‘raw material’ that can then be turned into something new.” “The desk pad contains 50 percent recycled materials, and the offcuts can go right back into production, so nothing is ever wasted,” says Kent Larsson.