How is IKEA meeting today’s logistics challenges? We speak to Susanne Waidzunas, Global Supply Chain Operations Manager

World famous retailer IKEA has branches in every continent, making its supply chain particularly challenging at the best of times, not to mention in the midst of the pandemic. In this Trans.INFO exclusive, we learn what the furniture giant is doing to keep its supply chain as smooth and sustainable as possible.

How is IKEA meeting today’s logistics challenges? We speak to Susanne Waidzunas, Global Supply Chain Operations Manager

Susanne Waidzunas, Global Supply Chain Operations Manager at IKEA Supply AG, is at the heart of the battle to ensure IKEA’s customers have access to the same product range they have come to expect, despite all of the challenges presented by global supply chain disruption.

In order to learn what IKEA is doing to make this possible, we quizzed Susanne on a number of issues, from chartered ships to technology and driver shortages.

Thanks for taking the time to talk to Trans.INFO Suzanne. What does the current port disruption mean for Ikea’s supply chain, and what actions have you taken to make your supply chain more robust and efficient amid these challenges?

Since the beginning of the pandemic, we have seen an increased interest in improving life at home and demand for IKEA products and we have produced and shipped more IKEA products compared to before the pandemic. At the same time, we are facing industry-wide supply chain disruptions that also impact the IKEA value chain.

Since the start of the pandemic, we have taken many extraordinary actions. Together with our suppliers and service providers we work hard, every day, to find new, innovative solutions to ensure availability of our products. We take daily actions to mitigate the effects of the global supply chain disruptions in our operations by collaborating with our partners to secure the availability of raw materials, minimize disruptions in production and secure logistics capacities. The close partnerships has and continues to help us to solve many problems along the way.

We are doing our utmost to make our products available for our customers. Given the continued volatility and supply chain constraints, we are focusing on making the products that our customers love and need the most available on every market. We are focusing on the availability of our top selling range and we will also work even more with seasonality, securing that the most seasonally relevant products are available to our customers in IKEA stores and online. We are also exploring opportunities to increase our offer of regionally sourced products.

IKEA recently made some waves when it emerged the company was chartering its own ships. Who did you cooperate with to make this possible, how many ships have you actually chartered and just how much volume are you moving in this way?

We are facing industry-wide supply chain disruptions that also impact the IKEA value chain and there are many factors that contribute to the situation we are experiencing, including availability of raw materials, sourcing of components and transport capacities.

We continue to operate in a volatile supply chain situation and together with our suppliers and service providers, we work hard every day, to find new, innovative solutions to ensure availability of our products. We have produced and shipped more volume than compared to before the pandemic and we have taken many extraordinary actions.

Together with our service providers we find new, innovative solutions to ensure availability of our products. We are for instance transporting more goods on train from Asia Pacific to Europe, we are re-routing our flows to avoid congested port and we are re-steering routes and investing in temporary warehouses across our value chain to avoid having production stops.

In addition, we also bought containers and chartered space on a vessel. During the containers shortage we took the decision to buy containers for a temporary period to support our ocean partners but it is not our intention to develop such a business model on a permanent basis. Due to competitive reasons, IKEA does not share what service providers we work with.

Ikea Groningen

Ra-smit, CC BY-SA 3.0, via Wikimedia Commons

Is there any country in Europe in particular where getting IKEA goods transported to stores has been particularly difficult in recent times?

Global supply chains continue to face huge challenges due to the pandemic. These are industry-wide challenges that also impact the IKEA value chain which has resulted in delays and shortages of products. The availability situation looks very different between different markets and even between different stores within the same country. In addition, availability also varies over time. Our advice to customers is therefore to check availability in different stores and online before going to a specific store.

In what ways is IKEA making its supply chain more sustainable?

At IKEA, we are committed to do our part to limit climate change by converting our business and become climate positive by 2030. We recognise that our climate footprint and responsibility stretch beyond the IKEA operations and across the entire lifecycle of our products – from sourcing of materials, manufacturing and transport to how the products are used in homes all over the world until the products’ end-of-life (read more here).

For transportation, this is translated into a target to reduce the carbon footprint from every transport that we do by an average of -70%. Big challenges also present big opportunities where we have an opportunity to lead and influence change.

We have a very ambitious decarbonise agenda, and this leads us to think outside the box (read more here).

What technologies does IKEA see as being key to the future management of its supply chain?

In IKEA we see many technology opportunities ahead that will enable us to optimize the physical goods flow of our products and manage our supply chain. The development and deployment of Artificial intelligence is one key enabler to assist us in decision-making for the planning, manufacturing, sourcing and execution of our supply chain operations moving forward.

Another enabler is the optimization of our goods flow through the virtual representation of our products and environments. The digital connectivity of our supply chain, to identify each product with smart tags to enable full traceability and the development and the deployment of robotics to move our IKEA product in the most efficient way using for instance camera guided robots and packing & autonomous mobile robots we also see as important technology opportunities ahead.

To what extent is IKEA concerned about the European driver shortage?

IKEA, as a big transport buyer relies on transport service providers and their drivers to transport our IKEA goods to our warehouses and stores and the shortage of drivers is a concern to secure a continued goods flow in the future. We aim to be the partner of choice for our service providers and recognize the importance of creating working conditions that attract and retain strong talents.

For us it is fundamental that all people transporting our goods have good and fair working conditions and work/life balance. We work together with different stakeholders in the international transport industry to enable positive changes in the transport industry.

Since the pandemic struck, there has been talk of companies nearshoring in order to build supply chain resilience. Is this something that IKEA is looking to do?

We continue to take learnings from the last 18 months and are evaluating how we, long term, can create an even more resilient supply chain, where we will put the light on questions like – production footprint, where in our supply chain we should create more flexibility etc.

Ikea kassa 2014a
Holger.Ellgaard, CC BY-SA 3.0, via Wikimedia Commons

As the Christmas peak approaches, are you confident that IKEA customers across Europe will have access to the same choice at IKEA stores as they have become accustomed to?

Since the beginning of the pandemic, we have seen an increased interest in improving life at home and demand for IKEA products. Given the continued volatility and supply chain constraints, we are focusing on making the products that our customers love and need the most available on every market.

We will focus availability on our top selling range and we will also work even more with seasonality, meaning that we now work extra hard to secure that the most seasonally relevant products for example Christmas products are available to our customers at IKEA stores and online.

IKEA global offer remains the same, but the availability of our products varies between different markets and even between different stores within the same country as well as over time. Our advice to customers is therefore to check availability in different stores and online before going to a specific store.

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