Introduction: It Is Easy To Think About The Present Without

Introductionit Is Easy To Think About The Present Without Considering

Introduction 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.

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.

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IKEA's commitment to sustainability is integral to its global business model and corporate philosophy. The company emphasizes responsible sourcing, environmentally friendly manufacturing, and sustainable supply chain management to minimize its ecological footprint while maintaining affordability. Through various initiatives in its supply chains across primary, secondary, and tertiary sectors, IKEA illustrates how integrating sustainability into each stage can lead to substantial long-term benefits both environmentally and economically.

Sustainable Activities Examples

One prominent example of IKEA’s sustainable activity is its approach to raw material sourcing in the primary sector. IKEA works collaboratively with its suppliers to ensure that the raw materials used, primarily wood, come from sustainable sources (Kleindorfer & Varaiya, 2019). The company has implemented the 'IKEA Way of Purchasing Home Furnishing Products' (IWAY), which requires suppliers to comply with environmental standards, including sourcing materials from responsibly managed forests. This commitment is reinforced by partnerships with organizations like the World Wildlife Fund (WWF), which advocates for responsible forestry practices (WWF, 2021).

Another significant activity is IKEA’s efforts within its secondary manufacturing sector. The company encourages its manufacturers to adopt resource-efficient practices, such as designing products that minimize material use and employing recycled or recyclable materials. For example, creating products like the LACK series with honeycomb-paper filling instead of traditional solid wood reduces resource consumption and waste (Hollander et al., 2019). Additionally, IKEA audits its suppliers regularly to ensure compliance with environmental standards and fair labor practices, showcasing a comprehensive approach to sustainable manufacturing.

Linkages Between Industry Sectors

The supply chain in manufacturing companies like IKEA encompasses three primary industrial sectors—primary (raw materials), secondary (manufacturing), and tertiary (retail and services). These sectors are interconnected in a supply chain that transforms raw materials into finished goods and then delivers them to consumers (Choi et al., 2020).

The primary sector provides the foundational raw materials, such as timber, which IKEA sources responsibly. This raw material then enters the secondary sector, where it is processed, assembled, and transformed into products. The secondary sector’s manufacturing facilities add value to these raw materials through techniques that reduce waste and enhance sustainability. Finally, the tertiary sector involves the retailing, marketing, and distribution of the finished products through IKEA’s extensive store network and online channels. Each sector influences the next; for example, sustainable sourcing in the primary sector directly impacts manufacturing processes and the environmental footprint of the retailing phase.

This integration supports IKEA’s overarching sustainability goal, ensuring that principles are carried through every phase of the product lifecycle, from raw material extraction to consumer delivery (Kleindorfer & Varaiya, 2019).

How IKEA Influences All Elements of Its Supply Chain

IKEA exerts significant influence over its supply chain by establishing strict sourcing standards, fostering supplier collaboration, and implementing rigorous auditing mechanisms. Its code of conduct, the IWAY standards, mandates compliance with environmental, social, and ethical criteria, effectively setting the minimum requirements across its supply chain (García-Torres et al., 2020). This encourages suppliers to align with environmentally sustainable practices, such as reducing emissions, waste, and complying with forest conservation laws.

Furthermore, IKEA collaborates with NGOs like WWF and UNICEF to promote sustainable practices amongst its suppliers and in harvesting raw materials. For instance, it invests in training programs that promote responsible forestry management and community development, which in turn ensures a steady supply of sustainable raw materials (WWF, 2021). The company also incorporates environmental impact assessments, like the e-Wheel tool, to evaluate the entire lifecycle of products, emphasizing eco-design and resource efficiency (Kleindorfer & Varaiya, 2019).

In manufacturing, IKEA encourages innovations such as modular designs and the use of recycled materials, reducing resource use and waste. It also promotes waste minimization during production, advocating for reuse of waste materials wherever possible (Hollander et al., 2019). At the retail level, IKEA’s influence extends to sustainability initiatives like waste recycling, reducing energy consumption in stores, and encouraging customers to adopt eco-friendly behaviors such as reusing shopping bags and supporting energy-efficient products (IKEA, 2022).

This systemic influence ensures sustainability is integrated into all elements, from raw material sourcing and manufacturing to end-user delivery, making the entire supply chain more responsible and resilient.

Long-term Effects on the Furnishing Industry

IKEA’s sustained focus on sustainability is likely to have profound long-term effects on the furnishing industry. Firstly, it sets a benchmark for responsible sourcing and eco-design, compelling competitors to adopt similar practices to remain relevant in environmentally conscious markets (García-Torres et al., 2020). As consumers increasingly prioritize sustainability, companies following IKEA’s example will gain competitive advantages through enhanced brand reputation and consumer trust.

Secondly, IKEA’s influence encourages broader industry shifts towards circular economy principles. Its efforts in designing products for recycling and reusing materials push suppliers and manufacturers to innovate in sustainable product development (Hollander et al., 2019). Over time, this could lead to a reduction in raw material extraction, decreasing industry reliance on non-renewable resources and lowering environmental degradation.

Thirdly, the adoption of sustainability standards across the supply chain fosters industry-wide improvements in labor practices, environmental protections, and legal compliance. IKEA’s transparent auditing and reporting systems serve as models that others may emulate, thus elevating the overall sustainability performance of the furnishings sector (Choi et al., 2020).

Finally, the economic benefits realized through energy savings, waste reduction, and efficient resource use will incentivize organizations to embed sustainability into their core operations. As the industry transitions towards more sustainable business models, the market may witness innovations in sustainable materials, manufacturing processes, and delivery systems, shaping a future where responsible and eco-efficient furnishing solutions become the norm (Kleindorfer & Varaiya, 2019).

In conclusion, IKEA’s exemplary sustainable practices are poised to catalyze a fundamental transformation in the furniture industry, fostering environmental stewardship, social responsibility, and economic efficiency in the long run.

References

• Choi, T. M., Guo, S., & Tan, X. (2020). Sustainable supply chain management: A review and research directions. International Journal of Production Economics, 223, 107516.
• García-Torres, S., González-Benito, J., & Sánchez-Fernández, J. (2020). The influence of environmental sustainability on firm performance: Evidence from the furniture industry. Journal of Cleaner Production, 253, 119954.
• Hollander, S., van Langenhove, H., & De Meester, S. (2019). Circular economy in furniture design: The case of IKEA. Journal of Industrial Ecology, 23(2), 256-268.
• IKEA (2022). IKEA sustainability report 2021. Retrieved from https://www.ikea.com
• Kleindorfer, P. R., & Varaiya, P. P. (2019). Sustainability and the supply chain: The case of IKEA. Operations Research, 67(2), 417-431.
• WWF (2021). IKEA and WWF partnership: Sustainable forest management. Retrieved from https://wwf.panda.org