Manufacturing IKEA Style
In recent history many companies tried to streamline their operations by closing plants and outsourcing production. IKEA has thrived because it took a different approach. As the company's territory expanded worldwide, their network of suppliers and manufacturers grew with it, with IKEA sourcing local materials whenever possible.
Ikea
There are currently 1,220 suppliers in 55 countries around the world. Significant concentrations of those suppliers are located in Eastern Europe. Following the political and economic upheaval resulting from the fall of the Berlin Wall, IKEA made the strategic decision to form the industrial subsidiary Swedwood as a means of safeguarding itself against the loss of vital suppliers.
Since its establishment in 1991, Swedwood has opened one to three new facilities each year. There are currently 45 production units in 12 countries. Swedwood has evolved to become an IKEA supplier with advanced production facilities of its own, and along the way it has afforded IKEA a means of further streamlining their integrated design, production and distribution system.