The world’s largest furniture retailer Ikea has deployed a demand forecasting system so that it can manage a decline in the number of its suppliers.
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Ikea, which reported worldwide sales of £9.93bn in its last financial year, wants to purchase more of its goods from a smaller number of suppliers in low-cost countries, often in Asia.
By using countries that are further away than its traditional suppliers, Ikea needs to forecast its demand for those products earlier.
The retailer’s head of supply chain planning Jimmy Biesert said, “It has been a successful move for us and has made it far simpler to start focusing on low-cost countries and cutting back on suppliers. In the long run, this will help us to improve profits and make our management system more efficient.”
Ikea chose the demand forecasting and fulfilment modules from merchandising software supplier JDA.
The company operates 225 stores in 33 countries. Its goods are produced by some 1,500 suppliers based in more than 50 countries.