In sync with sustainable home furnishing solutions, the Euro 29.2
billion Swedish giant is revving up conversations around circular
economic models. And true to IKEA's identity, Jesper Brodin, Global Head of Range & Supply, believes that the IP of the company actually
lies in its design while the procurement of materials can come from any
source—of course, adhering to stringent quality standards.
In an exclusive interaction with CD, Brodin outlines
the company's global supply chain, offers a peek into tomorrow's
furniture and positions India as a major retail and procurement hub.
Edited excerpts:
How is IKEA's iconic design woven to the supply chain?
The world is obsessed about quality and low price or function and low
price. We need both. That means together with our supply partners, like
the people we have been working with for more than 30 years in India,
they are our partners in making that happen. In certain aspects, some
things are more cosmetic, but the quest is to provide real function at
lower prices.
So we spend our investments in R&D, product
development, industry development, technology. What we want to do in the
new India, and also supported by us moving into the customer side here,
is to bring innovation technology and innovations here, build it up as
we build up the retail side, but also look at more ambitious
opportunities for India to become a leader in industry and export.
Today, we are 65 per cent textile-based in India wherein rugs and
textiles are the main trade. We see huge opportunities to develop other
materials and technologies in India for export as well.
IKEA
seems to press the refresh button in its product range quite
occasionally. How many SKUs does that leave the company with every year?
We have about 10,000 products—everything from sofas to lights. Of the
10,000 products, we probably shift about 2,000 every year. So we have
quite a turnaround of bringing in new designs and vitality in our
offerings. The whole point of our stores is to have a place where you
have instant gratification but it's also an experience in home
furnishing. So it is both experience and shopping.
Despite high raw material prices, expensive transport and inflation, how do you keep your prices low?
We work long term and the effort is to constantly bring down prices.
Our business model is to take out unnecessary costs. We don't compromise
on quality but try to bring in innovation and industry leadership to
take out costs.
Give an example.
The
innovation is not only to take out cost but find a sustainable business
model. An example is furniture that instead of being solid with board
material, we have invested in huge setups where the production is based
on density. We have made holes (in material) where you need strength and
where there is low density, you don't need holes.
