BUS740CS4

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CASE STUDY: IKEA ASSIGNMENT 1 Case Study: IKEA Assignment Faizan Malik School of Business, Liberty University Author Note Faizan Malik I have no known conflict of interest to disclose Correspondence concerning this article should be addressed to Faizan Malik Email: FMalik@liberty.edu

CASE STUDY: IKEA ASSIGNMENT 2 Abstract Proper supply chains allow for organizations to have collaboration with their suppliers, increased visibility, and an overall more agile approach to business. However, even with a proper supply chain in place, a multitude of risks exist that derail even the most successful of businesses. Some unforeseen risks, such as the Covid-19 pandemic, can disrupt businesses in all sectors and industries. In this case study, I will review the Covid-19 pandemic’s impact on supply chain and the environment, discuss supply chain risk management and sustainability, and suggest means organization can utilize to reduce waste.

CASE STUDY: IKEA ASSIGNMENT 3 The coronavirus epidemic is disrupting everyday life. What is the impact of this disruption on carbon emissions? What drivers this impact? The Covid-19 pandemic changed life as we once knew it, from the way we interact with others to how we treat a variety of illnesses. During its peak, a plethora of retractions were enacted in an attempt to reduce to transmission of the virus. As a result, many schools and non- essential businesses across the globe were closed or shifted to virtual models. Although the pandemic resulted in an unfathomable loss of life, and despite these changes being less than favorable amongst some, there have been some positive outcomes as a result of the pandemic. Aside from increased awareness of communicable diseases and the success of a new form of vaccine, the world saw a significant reduction of carbon emissions during the Covid-19 pandemic. According to Sikarwar et al., there was an estimated 14.3% (or 1749 GTCO2) decrease in carbon emissions between January and April 2020, when compared to the prior year (Sikarwar et al., 2021). This equates to the largest reduction of carbon emissions over the last century, even when compared to other significant world events such as the ending of World War II which only saw a 0.9 GTCO2 reduction in 1945 (Liu et al., 2020). The main drivers behind this reduction of carbon emissions were the decrease in human travel and interaction during lockdown and other various restrictions. According to Le Quéré et al., during the Covid-19 pandemic, there was a 75% decrease in aviation, 50% decrease in surface transport, and 15% reduction in power generation. As a result, combined emissions from surface transport, power reduction, and aviation accounted for 86% of the overall decrease (Le Quéré et al., 2020). It should be noted that many believe this reduction is only temporary and emissions will likely return, or surpass, their pre-pandemic levels. In a study performed by Ray et al., it was found that

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CASE STUDY: IKEA ASSIGNMENT 4 several countries and cities only observed temporary reductions in their carbon emissions, as strict lockdown procedures were not enforced for an extended period of time (Ray et al., 2022). Should a company coordinate supply chain risks management strategies with sustainability strategies? If so, how? Revisiting the Covid-19 pandemic, many organizations failed to properly assess their supply chain risk management (SCRM) in terms of sustainability and omitted many vulnerabilities, such as those associated with the transportation of goods. As a result, many organization continue to face ongoing issues obtaining the necessary materials. Although it is dependent on organizational needs, many organizations should aim to coordinate their SCRM with various sustainability strategies. “Sustainability strategies should consider the level of future uncertainty and therefore the risks that decisions may impose on the natural and social environments, in addition to the investment costs that are required to make supply chains more sustainable” (Giannakis, & Papadopoulos, p.455, 2018).Defined as the process of identifying and mitigating risks associated with an organization’s supply chain, SCRM allows organizations to prepare for both internal supply chain risks such as those related to manufacturing and external supply chain risks such as those related to supply and demand. Laurin and Fantazy describes sustainability as in integral part of supply chain management, or sustainable supply chain management (SSCM), with three integrated facets: an organization’s consideration of environmental impacts, environment impacts being monitored across the entire value chain, and having a broader view of sustainability that “ amalgamates issues, problems and solutions across functional boundaries” (Laurin & Fantazy, 2017). Using Ikea as an example, Laurin and Fantazy go on to explain that the organization has developed businesses that are not only formal and effective, but are sustainable as well. Ikea utilizes IWAY

CASE STUDY: IKEA ASSIGNMENT 5 Standards to interconnect inbound, operations, and production logistics; a practice that can be used by organizations attempting to implement SSCM. Including states that cover compliance, confidentially, and business ethics, IWAY Standard cover a mirage of sustainability metrics such as environmental, chemical, worker health and safety, and wages and labor (Laurin & Fantazy, 2017) Suppose you are trying to reduce food waste for a food retailer. How can you identify it? What drives destruction, and what steps will help minimize waste? Reducing waste should be a top priority for any organization, regardless of their sector or industry. However, those in the food industry must be extra cognizant of waste as many products are perishable and exist with short shelf lives. According to Dou and Toth, approximately 1/3 rd of all food produced for human consumption is lost or wasted, which equates to 1.3 tons per year (Dou & Toth, 2021). In the food industry in particular, Jernigan has identified the seven most common areas of waste which include operator motion, bad quality, overproduction, inventory, transportation, processing, and idle time (Jernigan, 2018). Food retailers must thoroughly evaluate their workflows and processes to identify potential and existing areas of waste. Beginning with operator motion, which involves the movements made by anyone handling the food, and transportation, retailers must look to minimize the potential for human error such as improper handling or contamination. For quality, overproduction, processing, and idle time, food retails should utilize a multifaceted approach to reduce waste. This begins with proper demand forecasting, which will allow retails to accurately produce the number of goods to meet the demands of their customers. Once proper forecasting is in place, food retailer should look for areas of manufacturing and/or production that are the least efficient, replacing them with tools that are automated or require less time. The combination proper forecasting and improved

CASE STUDY: IKEA ASSIGNMENT 6 workflows can then help improved any issues related to quality, inventory, or idle times, as only the required amount of food will be produced in a more efficient manner. Lastly, food retailers can reevaluate their pricing models, specifically for items such as perishable foods. Referred to as dynamic quality-based pricing model, food retailers would adjust the price of their goods as they approach their expiration dates (Wang & Li, 2012). By offering a lower price on products that are near expiration, food retailers can further reduce waste by selling products that would otherwise be unsold. Conclusion The Covid-19 pandemic continues to impact the world well beyond the comprehension of most. Despite much of the impact has been detrimental, be it loss of life or the financial repercussions, it did highlight the improvement in carbon emissions when the human element is removed. Although the reduction of carbon emissions is likely only temporary, it does provide a potential blueprint to reduce our negative impact on the environment. One of the on-going issues from the pandemic are continued issues with supply chains, which highlighted the need for proper supply chain risk management. Sustainable supply management, such as that exhibited by IKEA, can help mitigate any impact both unexpected and expected risks may have. Lastly, reducing waste should be an emphasis for most organizations, as they it can not only improve how the business functions but can ultimately benefit the environment as well.

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CASE STUDY: IKEA ASSIGNMENT 7 References Dou, Z., & Toth, J. D. (2021). Global primary data on consumer food waste: Rate and characteristics–A review. Resources, Conservation and Recycling , 168 , 105332. Giannakis, M., & Papadopoulos, T. (2016). Supply chain sustainability: A risk management approach. International Journal of Production Economics , 171 , 455-470. Laurin, F., & Fantazy, K. (2017). Sustainable supply chain management: a case study at IKEA. Transnational Corporations Review , 9 (4), 309-318. Le Quéré, C., Jackson, R. B., Jones, M. W., Smith, A. J., Abernethy, S., Andrew, R. M., ... & Peters, G. P. (2020). Temporary reduction in daily global CO 2 emissions during the COVID-19 forced confinement. Nature climate change , 10 (7), 647-653. Liu, Z., Ciais, P., Deng, Z., Lei, R., Davis, S. J., Feng, S., ... & Schellnhuber, H. J. (2020). COVID-19 causes record decline in global CO2 emissions. arXiv preprint arXiv:2004.13614 . Ray, R. L., Singh, V. P., Singh, S. K., Acharya, B. S., & He, Y. (2022). What is the impact of COVID-19 pandemic on global carbon emissions? Science of The Total Environment , 816 , 151503. Sikarwar, V. S., Reichert, A., Jeremias, M., & Manovic, V. (2021). COVID-19 pandemic and global carbon dioxide emissions: A first assessment. Science of the Total Environment , 794 , 148770. Wang, X., & Li, D. (2012). A dynamic product quality evaluation-based pricing model for perishable food supply chains. Omega , 40 (6), 906-917.

BUS740CS4

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