Building a sustainable
supply chain
Introduction    


          Listen with FIREFOX

It is easy to think about the present without considering the future. Consumers want more goods and services to improve their standard of living. The problem is they make choices about goods and services that have long-term consequences for the environment. In our modern world, organisations need to show responsibility. This means that they use resources efficiently, do not harm the environment and consider how what they do affects the ability of future generations to meet their needs.

IKEA aims to be a responsible organisation. It sells low-price home furnishing products around the world. These include furniture and accessories for kitchens, bedrooms, living rooms, bathrooms and children’s rooms. IKEA now has stores in 36 countries around the world. It has come a long way in its 60 years of business.

Sustainable: the ability to provide
goods and services for consumers
now, without damaging the ability
of future generations to meet their
needs.

  

founder

wallet

stockings

distribute

flat

item

undergo

expansion

subsequent

range

truck

lower

carbon dioxide

emission
IKEA vision                  Listen with FIREFOX

The direction for the organisation is provided by its vision. This acts as a guide for everybody within and outside the organisation about what IKEA wants to achieve.

IKEA’s vision is ‘To create a better everyday life for the many people.’

To meet this vision IKEA provides many well-designed, functional products for the home. It prices its products low so that as many people as possible can afford to buy them.

 

However, in creating low prices IKEA is not willing to sacrifice its principles. ‘Low price but not at any price’ is what IKEA says. This means it wants its business to be sustainable.

IKEA supplies goods and services to individuals in a way that has an overall beneficial effect on people and the environment. Customers all over the world have responded positively to IKEA’s approach. This is evident in its increasing sales. In 2006 IKEA had a group turnover of nearly 18 billion euros.

  

Vision: the setting out of a pathway or picture that identifies what leaders of an organisation wish it to become.

Turnover: sales of goods and/or services.
Sectors of industry and
sustainable supply chains  		   Listen with FIREFOX
When consumers go to a retailer like IKEA, they will be looking at the different ranges of products and how they are presented. They may also look for quality customer service.
However, consumers may not be aware that before products reach them, they must move from being raw materials through a variety of stages to become finished products suitable for sale. This is known as the supply chain.
The supply chain involves a flow of production and processes through each of the three industrial sectors:
   Consumers: purchasers and users of the products.

Retailer: organisation involved in providing activities related to selling goods or providing services for the final consumer.		   Customer service: range of activities provided by a retailer designed to meet the needs of customers.

Supply chain: the flow of goods, materials and services from raw materials through to a final product.

manufacturing

distribution

extract

develop

timber

agriculture

manufacture

insurance
IKEA takes its responsibilities seriously and organises its operations in order to have a positive effect upon the environment.
• It aims that all the products and materials it takes from the primary sector do not harm the environment.
• Its products are manufactured in a responsible way.

The following sections look in detail at how IKEA has achieved its aim to be a responsible business in each of the three sectors of the supply chain.