Mapping IKEA’s success in India through the supply chain lens

Not long ago, the young, buzzing, and developing India, was eagerly waiting for the Swedish brand IKEA. In 2018, as the brand launched its first store in Hyderabad, Indian consumers rejoiced as the southern Indian cosmopolitan state got to enjoy a unique experience, while the cities of Bangalore, Mumbai, and Delhi/NCR await the opening of the stores in their respective cities. Now four years after entering the Indian market and establishing two city[1]centres & seven online stores, we wanted to dig deep into the company’s journey in India and understand how it has fared in terms of its supply chain operations. We speak to Saiba Suri, Country Customer Fulfilment Manager, IKEA India, to get a sense of how the company has built quite a reputation for itself and continues to delight its customers.

IKEA entered the Indian market in 2018 with its first-ever retail store in Hyderabad. Could you walk us through, what we believe would have been a very interesting journey, up until the launch? Also, what has your role been in this journey?

I have been working with IKEA since 2015. I was accountable for organizing and steering the country’s agenda, ensuring to accomplish the decision made by the management team and country board. I also worked on key projects such as Market Potential Development Programme and Quality for Life: Future Search

I started working as a Country Retail Logistics manager with IKEA in the year 2018. The store launch was an opportunity to enter the mind and hearts of the many people of India. It has been a very enriching journey since then with teams working with full dedication to ensure every customer demand is met on time. I still remember the launch day since it meant that everything from the plan to the real on-the-ground operations had been completed, as well as the prerequisites for the store’s effective logistics backbone had been established. It was a great learning experience.

Can you talk about the importance of having an omnichannel presence in today’s time, and the challenges that one has to go through to build a resilient and solid omnichannel business model?

One of our key priorities is to create an excellent omnichannel experience for more of the many. We have invested the last couple of years to create a better experience to inspire customers across all our channels and to make shopping with IKEA an easier and seamless process. The advent of COVID-19, and post challenges taught us the importance and relevance of an Omni channel and devising new shopping behaviours and journeys, staying close to our customers – elevating a transactional experience to an engaging one. Having an effective omnichannel is the need of the hour as it ensures that all customer demands are met, and their products are delivered on time. COVID-19 helped us learn the importance of having a solid omnichannel and the need became even more apparent when we had new shopping behaviours and journeys – a need to be closer to our customers – elevating a transactional experience to an engaging one. Our digital capabilities are also key to continuing this big shift into the Omni reality.

While building a successful supply chain is what many organizations have flourished in, keeping it efficient and resilient is the difficult part. How have you at IKEA maintained an efficient and resilient supply chain while weathering the tough times?

Over the last year, supply chain leaders have taken significant action in response to the pandemic’s difficulties. It accentuated and pushed the supply chains of most organizations to another extreme. It is good that lead times are stabilizing, freight rates are coming down closer to normal levels and backlogs are reducing steadily. However, fuel costs, trade barriers, and political socio-dynamics between countries are ongoing issues. IKEA took an array of steps to ensure that we shine during our tough times. For example, we actively used our stores as fulfilment units – enabling us to offer better lead times and cost benefits to our customers. We wish to build flexibility and agility to respond to situations – to not have linear models in the supply chain but more dynamism which is what we are working with. Enduring changes with multiskilling, working quicker with forecast adjustments and demand sensing, and leveraging technology and our digital capabilities to ensure agility.

Achieving sustainability goals has been the driving force of organizations. Throw some light on IKEA’s sustainable goal and what efforts are being made to meet that goal in the organization’s supply chain and operations.

A continued focus on Green Supply chains will not only be better for people and the planet but also for businesses. Achieving sustainability goals is core to IKEA’s agenda and is followed in our day-to-day work. Such as our zero emission in the last mile is a strong contribution to our ambition to create a positive impact on people, society, and the planet. Our goal is to reach 100% share by FY 25. We have also come up with Greener Distribution centres to fulfil our sustainable agenda. And, the fact that our DC and CDCs are built with the prerequisite of natural light, they are 100 % lead powered and have water-saving and recycling technology and circularity built into their core operations. We also use lithium battery-operated MHE in our units.

This is an abridged version of the interview published in the may edition of the Logistics Insider magazine. To read the complete interview, click here.

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