OMGT129 Supply Chain Business Operations
GC&E Term Report
Section: _____________Group #:_________ (leave it blank)
GC&E Project: Supply Chain Business Operations - IKEA
Members:
1.Williams, Lisa 300-810-065
Date submitted: August 16th 2015 IKEAS Corporate Social Responsibility Strategy IKEA’s social responsibility and sustainability is continuing to grow and progress according to Chief Sustainability Officer, Steve Howard. IKEA wants their business to have a positive impact on the world so they have implemented a strategy called the People & Planet Positive strategy which focuses on 3 areas (IKEA Group, 2014). The first area of focus is to get customers on board with living a more sustainable life at home
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The guidelines and steps that IKEA is taking to become more environmentally friendly is by having 50% of their wood will come from more sustainable areas and 100% of their wood from priority areas (IKEA Group, 2014). Also, by August 2015, all cotton used by IKEA will be sourced from more sustainable sources like Better Cotton and leather products will be produced according and with respect of human rights and animal welfare. In order for IKEA to achieve design and sustainability objectives, they follow and balance four dimensions of design. The four different dimensions followed are form, function, quality, sustainability, and low price (Rafiq Elmansy, 2014). IKEA has already made changes by using cotton and water from sources that can be renewed. IKEA did this while posting strong sales figures. In 2014, its sales increased 5.9 percent from 2013 to $32.1 billion (Pantsios, 2015).
Eco-friendly Production and Retail Processes at IKEA
IKEA pursues sustainability in a big way which is why competitors could learn from their company. IKEA has a wide variety of products under its label. Today, 71% of all IKEA products are recyclable, made from recycled materials, and or both (A.Jefferies, 2009). In addition to this, Ikea recycles 84% of waste generated in its stores. IKEAs sustainability focuses on four components: products and materials, suppliers, climate change, and community involvement. IKEA bases
Many firms are learning that being environmentally friendly and sustainable has numerous benefits. (O.C Ferrell, Fraedrich, Ferrell, 2015). This could enable them to increase goodwill from various stakeholders and also save money in the long term. This will mean that they are being more efficient and less wasteful of resources, which will enable them to be more competitive by satisfying stakeholders. The CEO of
IKEA does a lot of effort to implement their new company’s strategy for 2020, so called, Positive & Planet Positive Strategy. In spite of IKEA’s commitment to human rights, it is difficult for them to control their entire global supply chain. IKEA with other of retailers, were lighted on having suppliers in India which employ labor. However, IKEA declares that those proves were found in carpets producer from India from only four suppliers. (Max Ebnother, 2014)
* Inbound logistic: One of the core values of H&M is the sustainability, and, thus, sustainability in production. The aim of H&M is to offer good quality fashion at the best price and to achieve it, H&M tries to avoid the waste. In this purpose, all the waste coming from the manufacturing, the transport and other sources are planned to be reused, recycled and reduced.(H&M, 2012)
The mission statement for EcoLiving is “To provide cost-effective, quality, and modern design and construction services while promoting greener living. Striving to advise and help our clients reduce their carbon footprint, along with our own, for the well being of our future generations.”
I decided to do my research at Lowe’s Home and Improvement. Lowe’s Home and Improvement is a hardware store that sales everything from your basic household appliances to minor cleaning supplies. Lowe’s believes that in order to maintain great customer service they feel that they must follow these simple rules: Provide customers with environmentally-responsible products, packaging and services at everyday low prices, educate and engage employees, customers and others on the importance of conserving resources, reducing waste and recycling, review and communicate progress made toward achieving established goals and objectives, and to engage on public policy issues related to sustainability. In this report I will discuss how I observed two
This incorporates producing their own energy at our stores and offices, lessening GHG discharges and making their private trucks more proficient. Because of developing customer interest for earth mindful items, Walmart started a Sustainable Product Index program in mid-2009 with the objective of looking at its supply chains and making a file that will rank items on different measures of ecological effect. An introductory supplier evaluation has been finished and a Sustainability Index Consortium is presently at work constructing the devices and social event the information important to make a last item level sustainability file. Whenever complete, such a list will permit customers and makers to effectively pick from the items and production methods, separately, that outcome in less effects to the earth.
IKEA sustainability responsibility strategy consist of performance indicators and targets to be achieved by 2020. These responsibilities and values consist of innovation, enthusiasm and company togetherness which aims to meet the future consumer demands with increasing prices of raw materials whilst maintaining the IKEA affordable prices
As cultures have grown and expanded, so has construction. New buildings are going up everyday while the old ones are being torn down. Cultures are starting to become more aware of what is thrown in the landfills and polluting our earth. Architects have begun building sustainably and using recycled materials to reduce their carbon footprint. It can be very difficult in choosing sustainable products. For example:
A business owner needs to realize that while there is great potential to succeed there is equal potential to fail. One of the greatest factors of success or failure is external factors and how they will play a role in the operations of a business. In this paper there will be a definition of some external factors for the Windy City Deli and how well the deli adapts to these factors. Analysis of the supply chain of operations will also be taken into consideration along with the identification of other issues and opportunities that may occur.
IKEA aims to reduce carbon emission, and achieve zero wastage targets coupled with improved relationship with stakeholders, suppliers and consumers, that provides massive opportunities resulting in business sustainability, competitiveness and higher
‘Smarter’ use of raw materials – IKEA increased the use of recycled or reclaimed waste products in energy production across all stores from 84% in 2007 to 90% in 2009.
And by offering the right products at the right prices we will help our customers live a more sustainable life at home. IKEA has an important role to play in terms of taking responsibility for people and the environment. This is why sustainability is one of four cornerstones in the new Group strategy “Growing IKEA – together”. We have a strong foundation to build on – it is in our culture to twist and turn established truths to find a new angle, a new idea, and to have the courage to try to do things differently. IKEA is obsessed with making more from less, and we hate to waste resources of any kind. This will continue to be our compass in years to come, and we will stimulate new thinking and innovation in our sustainability work. Innovation is needed to build sustainable solutions into the IKEA range and to tackle some of the global challenges society faces. We need to identify and use more resource efficient materials and develop better solutions for reusing and recycling IKEA products once our customers no longer want them. I believe IKEA together with our customers, co-workers, suppliers and the rest of society can make a big difference. The 50 million low-energy bulbs purchased at IKEA in the past three years represent energy savings equivalent to the output of four and a half nuclear plants, and substantial reductions of carbon dioxide emissions. This gives just a hint of the potential that lies in the word “together”!
IKEA’s Global approach focuses on the personal values and company’s belief, which is about how IKEA treat its employees and customers. Ingvar Kamprad, the founder of IKEA, tries to transfer his values and belief, which is operation in a no-frills, cost-conscious way to store managers and employees. And the most important is he wants that they are all in business “together”, by which he means that every person who works in his global empire plays an important role and has an duty to everyone else (Jones, 2013).
Their stores were also designed with the environment in mind, even though there had been no directive to do so from the executive level. These initiatives, as well as their more environmentally friendly manufacturing practices, such as using rail for shipments instead of trucks were, very much in line with the company’s corporate philosophy and culture.
IKEA, one of the world’s largest retailers is on the forefront of successful sustainable supply chains: from raw material acquisition to delivering the final product to the customers. They work