The first article of the series is found here.
IKEA’s packaging innovation is a process one, the SC and product-design were adapted to the invention. There are three essential elements to innovation: concept, package and process (Zhang, 2017).
Zhang et al (2016) defines a capability as made of Resource + coordination + learning. The example of IKEA’s flat-packaging innovation will be used. It is important to highlight that “from a logistics perspective, the function of packaging is to organize, protect and identify products and materials” (Jonsson and Mathiasen, 2004). An innovation should give a different perspective while capturing value, thus, the standard requirements for packagings ought to be followed.
Resources: standardised products
A resource is defined as an attribute easing a company’s creation and implementation of the overall strategy (Barney, 1991 p101). Engineers and designers have altered products to enhance the SC. Standardisation of both packaging and products facilitated economic and efficient production and distribution (Jonsson and Mathiasen, 2004). In fact, IKEA’s kitchens are the same up to their designs. Similarly, flat-packaging and nails have been standardised.
The innovation benefited the brand as it was the first to develop it, called by Barney (1991) “unique historical conditions”. Indeed, before sustainability policies were common, IKEA reduced its waste and anything judged non-essential.
Coordination: the network
In terms of capabilities, coordination expresses coordinating and integrating of network activities (Zheng, 2017). Connecting globally spread stores to thousands of suppliers requires good communication and coordination. This communication demands for suppliers to work as a network, interacting altogether, rather than a chain, improving innovation (Bellamy et al, 2014). Changes in the design of a product will induce changes in the process (Slack et al, 2010). Any variation to the packaging of a product is risky as it is difficult to know the product’s handling throughout the SC. The optimisation, done through mixing transportation styles, enables to lower the strain on the environment and the cost of transportation (Jonsson and Mathiasen, 2004). To bring in such change, IKEA and its suppliers need great communication.
Learning: flat packaging
Knowledge management has been used to introduce flat-packaging. Collectively engineers, designers and other stakeholders allowed flat-packaging to happen when re-shaping the SC. The company learnt to adapt its SC to changes making it innovative in many regards including cost reduction.
There is a need to find a balance between flexible packaging and tailored made one that IKEA found by adapting its products instead of its packaging (Hellström, Nilsson, 2011).
The next article will go over some recommendations I make for the future of IKEA.
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