Packaging IKEA's Supply Chain

You don’t often see close looks at how corporate culture influences a company’s supply chain, and you see insightful, perceptive pieces even less often.

The profile of the IKEA in the Oct. 3 edition of The New Yorker wasn’t really a supply chain article, but in diving into the history and odd culture of the home furnishings retailer, journalist Lauren Collins makes some important observations about the company far-flung presence and raises some very big questions about issues in supply chain and transportation today.

Anyone who manages transportation, for instance, will identify with the point Collins makes about IKEA’s famously dense, no-waste packaging: “The company’s goal is to design products that can be packed as tightly as possible, minimizing damage and maximizing profit as they are transported over the oceans. It’s motto: ‘We hate air.’”

Fair enough.

But it gets more complicated when look at such issues as IKEA’s impact on the environment, an issue of growing importance across the supply chain.

She points to a book by Ellen Ruppel Shell, “Cheap: The High Cost of Discount Culture,” in asking how the “throwaway culture” built up by IKEA’s combination of disposable and breathtakingly cheap goods: “IKEA, she writes, has managed to perpetrate one of the great marketing gambits of the 21st century: the discreet transfer of costs from seller to buyer.”

That’s especially important if you look at that sustainability issue.

With its light, cheap furniture, marketing to an audience of mostly young, largely urban and within shouting distance of hip customers, IKEA certainly has the reputation of a business that embraces supply chain sustainability. But Collins suggests that depends on where you count the supply chain as beginning and ending.

By building its stores as huge warehouses out on the fringes of urban areas, IKEA saves on fuel and emissions on truck moves that would go to smaller, more central sites. But that furniture still has to get to the consumer, and that means countless longer, individual trips by the consumers themselves.

It almost sounds like carbon trading.

-- Contact Paul Page at ppage@joc.com. Follow him on Twitter @PaulPage.

For the full story: Log In, Register for Free or Subscribe