Product life cycle and core values of Ikea

Each product has its own life cycle. As noted earlier, Ikea’s founding goal is to offer customers more sustainable products at low prices, so it is interesting from a scientific point of view to study the essence and way of working at each stage of the Ikea product life cycle. “We are constantly improving and fixing the steps in the list “Our steps” [38]. Let’s look at these steps in more detail.

Step 1 – design.

This step includes two main points:

1.1. Ecological design. Our designers, developers and manufacturers must consider safety, quality and environmental aspects throughout all stages of product development. To understand the assessment of the impact of a product on the environment, Ikea uses the method of an electronic circular diagram. In accordance with it, regular monitoring of the product life cycle is carried out. The pie has five zones: Raw Materials, Production, Store Shipping, Operations, and Recycling.

1.2. Efficient use of materials. Ikea strives to maximize the use of resources without compromising the quality or safety of the final product. The main raw materials used by Ikea are wood, cotton, metal, plastic, glass and rattan. The share of renewable and recyclable types of raw materials used is constantly increasing.

Step 2 – raw materials, which includes two main materials:

2.1. Wood is an excellent material, high-quality and environmentally friendly. However, it must be supplied from forestry enterprises where responsible forest management is applied. Ikea considers it unacceptable to use wood from illegally cut down or virgin forests. The long-term goal is to only use wood from sustainable forestry in the production of goods.

2.2. Cotton is another important raw material for IKEA products. Progressive methods of cotton production are actively promoted. Ikea’s goal is for all cotton used to be produced in a sustainable manner, both in relation to the people involved in growing and harvesting it, and in relation to the environment. Traditional methods of growing and processing cotton require large amounts of water and chemicals. Ikea is actively involved in initiatives related to the development of improved cultivation and processing methods. The aim of these developments is to increase cotton production in an environmentally sound manner.

Step 3 – production, which is based on the IWAY code of conduct “Procurement of goods for home improvement. IKEA Methods (The IKEA Way on Purchasing Home Furnishing Products, IWAY), which defines IKEA’s obligations towards suppliers, as well as regulates IKEA’s requirements for the behavior of suppliers. The IWAY Code was introduced in 2000. There are now several IWAY codes that govern various aspects of our business, all of which are based on international conventions and declarations and include provisions based on the UN Universal Declaration of Human Rights (1948), the Declaration of the International Labor Organization “On Fundamental Principles and Rights at Work (1998) and the Rio Declaration on Environment and Development (1992).

The Code of Conduct defines aspects of social protection, the prohibition of child labor, environmental protection, responsible forest management and much more. Suppliers are responsible for making their employees and subcontractors aware of the contents of the Ikea Code of Conduct, and for ensuring that all requirements of the code are complied with in their facility.

Currently, there are five codes of conduct reflecting specific areas of activity:

“Purchasing goods for home improvement.”

“Prevention of child labor exploitation”. “Distribution of goods for home improvement”. “Purchasing Food”.

Procurement of promotional products and services.

Ikea is actively working to prevent corruption and illegal activities. Ikea fights corruption, for this it has developed its own anti-corruption policy – the Rules for the Prevention of Corruption, which indicate the procedure for employees to follow in case of suspicion of corruption, fraud, deceit or other illegal actions.

Step 4 – transportation.

The transportation uses flat packaging, which allows you to transport more goods at a time, which means reducing the number of vehicles and carbon dioxide emissions into the environment.

Step 5 – marketing.

Every year, millions of copies of the Ikea catalog in different languages reach homes around the world. Ikea is actively working on the environmental friendliness of both the catalog itself and its production. The production of the catalog is governed by a system of procurement and marketing rules, which includes both social responsibility rules and specific requirements for the quality of catalog paper and printing companies. They must be observed by all people involved in the release of the catalog. Ikea is committed to using paper from forests that are managed in accordance with international environmental standards in the production of the catalog. Regular studies are carried out to confirm the legal origin of raw materials for paper production. Enterprises – manufacturers of paper, as well as enterprises providing printing services, must have an environmental certificate.

Step 6 – Ikea stores.

Ikea is committed to ensuring that the food offered in its restaurants and sold in stores is safe, grown and produced in a socially and environmentally responsible manner. To do this, Ikea buys fresh products in packages for its restaurants and stores. The range of products is purchased centrally from hundreds of suppliers. In all Ikea stores around the world you can find the same products. The local assortment is formed from products typical for each country. All food suppliers must comply with national and international requirements and agreements related to food and food production in their respective countries. In addition, Ikea’s code of conduct – “Ikea’s Food Purchasing Methods” – sets out certain requirements for Ikea’s suppliers.

For example, Ikea offers only UTZ-certified coffee. It is an independent, non-profit organization that operates the largest and fastest growing coffee production certification program. Ikea customers can find out on which plantation the coffee they bought at Swedish Produce was grown. To do this, you must enter the code and the expiration date of the product in a special device. The UTZ Certification Program is committed to sustainable development and considers the interests of people and the environment with sound business practices.

Step 7 – Ikea products.

Ikea restaurants regularly offer organic dishes. The store “Swedish Products” also offers a range of natural products.

Ikea strives to ensure that its products, as well as the materials from which they are made, have a minimal impact on the environment and are safe for the health of customers. This takes into account the need to reduce costs as much as possible, when creating product designs, the possibility of saving resources is always taken into account, and renewable materials and recycled materials are used in production.

IKEA is committed to minimizing or eliminating the use of chemicals that can harm people and the environment by supporting the new EU chemical policy REACH. All Ikea products worldwide must comply with REACH chemical requirements.

Ikea pays special attention to goods for children, the quality and safety of which are subject to increased requirements. The Ikea staff involved in the development and procurement of these products study the needs of the child in development and a safe and healthy environment in special trainings. Ikea children’s products are tested according to stringent national and international standards by third-party experts at Ikea’s own laboratories in Älmhult, Sweden and independent accredited test labs and institutes around the world.

Every year, thousands of tests are carried out on IKEA products at various stages of development. Even more testing is done during the production of goods. Once a product has been approved for production, any changes made to the product or method of production are evaluated for the need for additional testing. Checks for the content of harmful substances are carried out by random sampling by independent test laboratories that undergo annual certification. Ikea also requires its manufacturers to use only products certified by independent organizations.

Step 8 – recycling.

Ikea is committed to minimizing production waste. Wherever possible, waste from one industry should serve as raw material for another. Ikea is returning large volumes of cardboard, paper, plastic, wood, metal and glass to circulation. Most Ikea stores organize collection points for customers to collect waste, for example for electrical and electronic equipment, used packaging, batteries and energy-saving light bulbs. A product with defects in Ikea is not written off, but is sold in the discounted goods department or disassembled – then the good parts are used as spare parts.

Ikea is working with the World Wildlife Fund on a project to reduce greenhouse gas (carbon dioxide) emissions from Ikea’s operations. Collaboration is carried out in two main areas:

improving energy efficiency and switching to renewable energy sources at Ikea suppliers;

development of reasonable use of passenger transport.

Questions

1. Describe the main materials that Ikea uses in the manufacture of its products. What are their benefits?

2. Why, in your opinion, has IKEA been able to create such a powerful brand and become so successful in the market?

3. Who, in your opinion, are the main competitors of Ikea?

4. What is the essence of the IKEA quality management system, what are its main features?

5. Conduct a SWOT analysis of the company’s activities.

6. Create a registry of Ikea processes.

7. Determine the quantitative indicators of the effectiveness of the process you have chosen and fill out Appendix 6 “Process Information Card” in this way.

8. Formulate a company quality policy in accordance with ISO 9001.

9. Develop company quality plans.

10. Design a customer satisfaction survey.

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