Ikea Downsizes New Stores

Ikea Downsizes New Stores

January 23, 2018

Ikea’s newest stores have smaller footprints, from pop-up sites, to stores under 10,000 square feet. That’s a big change, compared to the 25,000 square feet of traditional stores.

It’s all part of a new service design for Ikea.  In the past five years, the retailer has seen a decrease in younger couples shopping at the traditional large stores.  As e-commerce has grown for competitors, Ikea is moving to test smaller stores with technology enhancements, increase staffing to give a more personal experience, and compete in the e-commerce channel.

These pilot programs illustrate the need to rework their supply chain to support multiple distribution channels in the future.

This post is based on the Bloomberg article,  The Tiny Ikea of the Future, Without Meatballs or Showroom Mazes, by Carol Matlack, January 10, 2018.

Discussion Questions
1. What are the order qualifiers and order winners being addressed in each of the new retail channel outlets being piloted by Ikea?

Guidance: Review order winners/qualifiers. Students should then apply the order winner/order qualifier concepts to each retail channel outlet being piloted.  Are there multiple ways to address each qualifier?  How would Ikea evaluate the effectiveness of each Continue reading

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Truckers, C’mon Back

Truckers, C’mon Back

The current demand for truck drivers is high. Or is it turnover that’s the problem? Or freight to carry?

A combination of driver shortage, high turnover, stressful life, and stagnant pay have contributed to a widespread rush to lure new drivers with financial incentives. If the shortage persists, the imbalance between supply and demand in this labor market will cause disruptions in the supply chain.

This post is based on the USA Today article,  Trucking Firms Offer Up to $8,000 for Drivers to Ease Shortage, by T. Evanoff, December 26, 2017.

Discussion Questions
1. What are the reasons for an apparently short supply of drivers?

Guidance: The main reasons seem to be low pay, demographics, difficult living conditions, and lack of privacy. The pay has been relatively flat since the 1980s, and like in many other industries, it has not fully recovered from the negative effect of the great recession. The large trucking companies’ hiring of inexperienced drivers seems to have heightened that effect. Many drivers are baby boomers and are retiring, further exacerbating the shortage. Truck drivers work many hours and are away from home most of the time. The addition of cameras in the cabins Continue reading

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2018 Supply Chain Predictions

2018 Supply Chain Predictions

January 10, 2018

What’s on the menu for 2018?  Expected supply chain management trends include:

  • increased supply chain visibility software use
  • the disruptive impact of the sharing economy of supply chain distribution networks
  • the increased need to improve supply chain speed (the so called “Amazon Effect”)

This post is based on the Supply Chain Digital article, Supply Chain – Predictions for 2018 Trends, by Greg Kefer, December 8, 2017.

Discussion Questions
1. Why is “supply chain visibility” a necessary ingredient to modern supply chain design?

Guidance: This is a thought question for students to discuss.  Some possible answers may include the need to coordinate with suppliers and distributors,  ability to better operate strategic sourcing efficiently, empower mass customization throughout the system, decrease inventory levels, avoid back orders, etc.

2. How could Uber and similar “sharing economy” outfits disrupt current logistics operations?

Guidance: This is a thought question for students to discuss ideas.  It may be helpful to start the discussion by illustrating that small packages could be delivered in local locations cheaper and faster with Uber perhaps than FedEx.  Ask students for an example of how warehouse space could be in someone’s unused garage for inexpensive Continue reading

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