KEA’s Struggle with Production-Oriented Retail: Inventory Woes and Planning Challenges

Category: Ikea, Retail, Warehouse
Last Updated: 30 Mar 2023
Pages: 3 Views: 981

KEA has been suffered from the difficulties faced by production-oriented retailers. KEA project manager said that It was not enough for them to manage the demand only. They must manage the production too, and keep the supply and demand In balance. In the mid-sass, it became clear to KEA that the retailer's inventory model wouldn't work smoothly. The inventory costs were already too high. After mid-sass, ERP implementation failed to fix Kike's inventory management problems.

The planning team composed a rudimentary list of the qualities, so stability and reliability were obvious musts. KEA manages a whole range of production, which from raw materials to finished product. They have to coordinate with more than 1,600 suppliers worldwide. When sales for a product turns out surprisingly high, It would empty from their warehouse, and when the demand didn't reach the expectations, the merchandise had already produced would back up in the facilities.

However, the most important problem for KEA was an integrated planning platform that can provide a consistent working environment for the retailer's product managers worldwide. KEA has been working on differentiate itself with other retailers. They not only offer unique designs, but also share a typical warehouse on Its ground level. Meanwhile, on the second level they provide a cozy environment where customers can enjoy all kinds of furnishing concepts. KEA in-stores logistics model is very novel and was welcomed by their customers.

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The most important thing is it can help KEA saving costs and increasing productivity significantly. On the ground floor, the products selected by customers are picked from pallet location that placed as high as the typical person could reach. Additional product Is stored In reserve zone above these locations. Inventory Is cut down to the lower space at night because forklifts and pallet jacks are not used during store hours for safety reasons. The rest space contains items too bulky for customers to load without help.

Since KEA advocates as much self-service as possible, it tends to minimize the number of products in this bulk storage area. KEA has over 200 stores in 30 countries worldwide. This requires exceptional logistics and outstanding support as well as the best solutions. In all, KEA has 1,600 suppliers In 55 countries, and trades through local KEA purchasing offices in 33 countries. In order to make sure that the supply chain works, t must cooperate with the best technology and the right people. Therefore, KEA chose the demand forecasting and modules from a software supplier JDK.

JDK customized a demand forecasting system for KEA so that they can manage a decline in the number of its suppliers. KEA began working with JDK in 2001 and the first solution was to implement demand solutions on all KEA products globally. KEA set a number of objectives for JDK such as developing sales planning methodology and tools that gained realistic forecasts used for designing supplier, warehouse, and transportation capacities. JDK also developed a ability of planning methodology and LOL that make it possible to benefit from the cost-savings of long-term commitments.

A global and regional supply planning system component would make it possible to have a collaborated and consolidated sales. The solution would also allow KEA to take all Inventories Into account and to have supply chain visualized In the order processing management. I en retable or's nana AT supply canal planning salsa TN has been a successful move for them and has made it far simpler to start focusing on low-cost countries and cutting back on suppliers. In the long run, this will help them to improve profits and make their management system more efficient.

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KEA’s Struggle with Production-Oriented Retail: Inventory Woes and Planning Challenges. (2017, Oct 26). Retrieved from

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