Ikea updates forecasting for long leads

Ikea has deployed a demand forecasting system to manage suppliers working with longer lead times, as it moves to increase its sourcing from low-cost destinations further from its European headquarters.

The furniture retailer, 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 regions such as Asia. By using countries that are further away than its traditional suppliers, Ikea needs to forecast its demand for those products earlier.

To this end, Ikea is using demand forecasting and fulfilment modules from merchandising software supplier JDA.

Jimmy Biesert, head of supply chain planning at Ikea, 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."