Explain the push-pull based supply chain system and argue why Ikea should adopt this system.
The IKEA Company uses the push-based strategy to maintain the relationship with the
customers as well as collaborate with all the partners and the members of the IKEA
Company. However, due to the supplies problem the relationship between a company and
its customers is going to be loose and demand uncertainty is high, the supply chain needs
to be managed based on realized demand. Therefore in push based strategy firstly we
analyse the need of the customer and then plan to make the outlet and design the product
to meet the need of the customer.
On the other hand, IKEA Company follows the supply chain strategy that is build to stock in
which the customer segment is online and popular configuration and the product are based on small number of configuration designed for market with the large production size.
Moreover, have the smooth production to cut the cost and have the stock due to mass
distribution at multinational level and planning horizon is medium due to change the
production level with some little modification. This strategy will be helpful for the IKEA
Company because this supply chain strategy with all the attributes of this company and the
leading time is also long from manufacturing to stocking locations and short to customer
location. This is the major problem which IKEA Company facing now a days.
Explain the push-pull based supply chain system and argue why Ikea should adopt
this system.
Note: you are required to paraphrase your explanation of push-pull supply chain
systems before you provide at least 2 application points in relation to Ikea.
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