Research On Procurement & Supply Model With Improvement Of IKEA

Globalization of world economy has caused supply chain competition, which is more intensely than market competition. Procurement is one of the most significant factors in supply chain management. It is because that the products quality, purchasing and even the satisfaction of final customers' are decided by the purchasing model of a company, also by the relationship between purchaser and supplier and suppliers'competence. Moreover, procurement in a company can be profit source is an important strategy of cost decrease and competition competence enhancement. Therefore, current globalization requires the implementation of strategic sourcing,which consolidates procurement strategies into companies' overall strategy; integrates with other functions; establishes good systematic process;develops with excellent long-term suppliers strategic partnership of cooperation , to achieve continuous reduction of Total Cost of Ownership.This thesis emphasizes the theory of procurement management in supply chain management. It describes and analyses the global procurement strategy and pattern of the world famous international home finishing retailer IKEA. IKEA group controls the whole supply chain from products design to customers. IKEA designs products with optimized cost; purchases in global suppliers network and to achieves the lowest cost with global competition to support global sales. To meet the future development,IKEA does some improvements on its procurement and supply model. IKEA classifies products into category by similar technical, production equipments and supplier base; brings out information collection and supplier mapping process from purchasing flow, which increases purchasing efficiency, decrease the purchasing cost and standardizes the quality; IKEA manages different suppliers with different team and working routine, and strengthens the strategic relationship with prioritized suppliers; IKEA puts suppliers into its' cooperate team, brings Total Quality Management concept to improve internal and external quality, and helps suppliers managing their sub-suppliers; IKEA pays much more attention on procurement team training which includes professional technical and culture.