Executive Summary - Achiever Papers

TASK： Please write an Executive Summary for the case: IKEA Case Report

Requirements: Max 1 page (A4), font size 12, double line space. Notice copying from each other is plagiarism

supply chain management

ACase Study of IKEA – in the

Interactive Framework of Green

Supply Chain Management

Someone’s or Research

Team’s Name

12 December 2018

Title Page

1. Executive Summary Page 2

2. Introduction

a. What is Supply Chain Management? Page

b. What is Green Supply Chain Management? Page 2

c. Why companies want to have Green Supply Chain Management? Page 2

d. Current Situation of GSCM Page 3

3. The Framework and Case Study

a. The Interactive Framework of GSCM Page 3

b. A Case Study of IKEA Page 4

c. Application of IKEA case into the Framework Page 5-7

i. Green Product Design

ii. Green Material Management

iii. Green Manufacturing

iv. Green Marketing and Distribution

v. Reverse Logistics

4. Challenges and Recommendations Page 8

5. Conclusion Page 8

1. Executive Summary

This is section is for your Assignment 1. It’s your job to fill
in this ES part.

Min: half page; Max: one page (12 font size, double space)

2. Introduction

a. What is Supply Chain Management?

Supply chain management is the management of the flow of goods and services and

includes all processes that transform raw materials into final products, from supplier to

manufacturer to wholesaler to retailer to consumer. (Supply Chain, 2019).

b. What is Green Supply Chain Management?

According to Srivastava (2007), GSCM can be defined as “integrating environmental

thinking into supply chain management” by minimizing wastages like emissions, energy, solid

waste in the supply chain, “including product design, material sourcing and selection,

manufacturing process, delivery of the final product to the consumers as well as end-of-life

management of the product after its useful life”.

c. Why companies want to have Green Supply Chain Management?

There are different factors to motivate companies to go “green” in their supply chain.

One of the factors is consumers’ awareness. Previous survey indicates that more than half of

global consumers (53 percent/representing 1.1 billion people) prefer to purchase products and

services from a company with a strong environmental reputation, according to a global survey

released by video-conferencing company Tandberg in 2007. Another study in 2015 also

showed people continued to be willing to pay extra for green products and services that come

from companies who are committed to positive social and environmental impact. Being “green”

can increase the reputations of the organizations which also get the supports from specific

consumers. GSCM can result cost reduction and profitability which is another motivator for

organizations to switch to “green” supply chain (Kumar, 2011).

d. Current Situation of GSCM

Top companies are now engaging in going “green”, not only due to the social

responsibility but these organizations also concern the future business environment (17 Top,

2019). For instance, The Bank of America has successfully recycled 30,000 tons of paper every

year. Coca Cola recycled or recovered more than 90% of waste materials at production facilities

in 2009 (Coca-Cola, 2011). Although studies have shown that implementation of GSCM can

result profitability (Kumar, 2011), companies still have hesitation in switching to the “green”

supply chain (Bhateja, 2011).

3. The Framework and Case Study

a. The Interactive Framework of GSCM

Ghobakhloo has developed an integrated framework of GSCM (Figure 1) which is based

on following definition of GSCM:

Green Supply Chain Management (GSCM) = Green Product Design + Green Material

Management + Green Manufacturing Process + Green Distribution and Marketing + Reverse

Logistics (RL)

Figure 1. Framework of green supply chain process implementation

b. A Case Study of IKEA

IKEA is a Swedish-founded furniture retailer that designs and sells ready-to-assemble

furniture, kitchen appliances and home accessories. IKEA’s vision is to ‘create a better

everyday life for many people’ and their business concept is ‘to offer a wide range of well-

designed, functional home furnishing products at prices so low that as many people as possible

will be able to afford them’ (IKEA Supply AG, 2008). The vision and business ideas are carried

across all aspects of the business, ‘We work hard to achieve quality at affordable prices for our

customers through optimising our entire value chain, by building long-term supplier

relationships, investing in highly automated production and producing large volumes. Our

vision also goes beyond home furnishing. We want to create a better every day for all people

impacted by our business.’ (Inter IKEA Systems B.V., 2015).

To achieve the above vision, IKEA announced commitments to inspire and enable

sustainable living in 2018. The company aims to remove all single-use plastic products from

the IKEA range globally by 2020, reduce 70% climate footprint per product and use all

renewable or recycled materials by 2030. To achieve these goals, IKEA is investing EUR 380

million to develop new materials and a truly circular IKEA range.

c. Application of IKEA case into the Framework

This section is going to briefly explain the detail of the framework and then apply the

IKEA case in it to explain how IKEA successfully develops and implements the GSCM.

i. Green Product Design

Green product design includes Life-Cycle Assessment/analysis (LCA) and

Environmentally Conscious Design (ECD) of the product. LCA is generally concerned with

the process for assessing and evaluating the environmental, occupational health and resource

consequences of a product through all phases of its life and ECD seeks to design products by

considering the environment (Gungor, 1999). In ECD context, the information from LCA can

transfer into the initial design of a new product. The designers from IKEA have the ECD idea,

they always implement sustainable innovation in their designs. In creating the ODGER chair,

the team implemented LCA, they carried out certain tests, well communicated with the

suppliers in matching the possibilities to fulfil customers’ need, result sustainability and keep

prices low (New ODGER, 2017).

ii. Green Material Management

It includes green material selection and green material sourcing. The most reasonable

action is replacing a potentially hazardous material by less problematic one (Srivastava, 2007)

or replacing limited resources by renewable or recycled materials. Using the same example,

ODGER chair, the chair is made of wood plastic composite, 30% renewable wood and 55%

recycled plastic.

According to IKEA’s annual report 2018, IKEA used around 0.7% of all cotton grown

around the world. Traditional farming techniques require large amounts of chemical fertilisers

and toxic pesticides which result soil erosion. As an investor of Treetotextile, this company has

developed process to transform wood pulp into a cotton-like fabric which has assisted IKEA

to manufacture a more environmental product.

IKEA also responds to sustainable sourcing; more and more products only contain

sustainably sourced wood. For instance, all wood used in the furniture series HAVSTA comes

from sustainably managed forests.

iii. Green Manufacturing

It consists of resource consumption reduction, waste reduction and emission reduction.

The main objective in the green manufacturing process is to reduce the usage of materials and

the indirect resources/energies (Ghobakhloo, 2013). To minimize the unnecessary waste in

production, IKEA cuts and shapes every piece of wood with designs and plans. For instance,

SKOGSA worktop is made with a thin layer technique, placing a 3mm solid wood surface on

particle board. This technique requires less raw material than the ordinary solid worktop.

The organization also pays efforts on reducing the emission of carbon dioxide. IKEA

Group has invested EUR 1.7 billion in renewable energy since 2009. It is operating 416 offsite

wind turbines and has installed around 750,000 solar panels on IKEA buildings (Circular and

Climate, 2018).

iv. Green Marketing and Distribution

Green marketing consists of promoting products and services based on environmental

factors or awareness. Companies hope that consumers will associate the environmental core

values with the company or brand, which can help to cater a new target group (Green Marketing,

2018). For instance, IKEA includes the latest sustainability information in the website to

promote their products and brand. The Group has announced to phase out single-use plastic

products by 2020 (IKEA commits, 2018). The 3 stores in Hong Kong has stopped providing

plastic bags for consumers.

Green distribution defined as; ”transportation service that has a lesser or reduced negative

impact on human health and the natural environment when compared with competing

transportation services that serve the same purpose” (Björklund, 2010). For instance, IKEA

cooperated with particle-board producers to create a new particle-board alternative. The new

boards reduced the need for resources by 85,816 tons; on the other hand, the weight of cargo

and number of trucks dropped, finally resulted less carbon emission and helped IKEA lower

costs (Design for, 2018).

v. Reverse Logistics

Recycling, reusing and remanufacturing of materials are under reverse logistics.

Recycling is the process of collecting and processing materials that would otherwise be

thrown away as trash and turning them into new products (Recycling, 2018). IKEA encourages

consumers to recycle cardboard, drinks containers, betteries and light bulbs by placing them in

recycling bins at stores.

Reuse is defined as to use an item more than once. IKEA has just implemented a new

scheme of exchanging used IKEA furniture for a reward voucher in Edinburgh. The company

will sell the items in the bargain area (IKEA to sell, 2019).

Remanufacturing refers to extend the life of the original core unit by repairing,

refurbishing or overhauling the item (Ghobakhloo, 2013). In 2019, Premier Sustain shared its

experience about remanufacturing office furniture with IKEA which is a pioneer project.

4. Challenges and Recommendations

One of the visions of IKEA is to provide quality products at affordable prices for our

customers. However, according to the annual report in 2018, due to the increased raw material

prices for wood and metal products, it led to an approximately 1% lower gross margin and an

0.2% price increase to IKEA retailers.

Reduction in gross margin definitely results a negative impact to the company’s financial

performance. Practising GSCM initially is a costly affair, since it is a long-term investment,

IKEA needs a longer time to see the result. To cope with this challenge, sourcing of new

suppliers and educations for suppliers maybe useful. IKEA can keep looking for new suppliers

which can provide sustainable resources. At the same time, the Group can establish a long-term

relationship with suppliers in assisting them to improve their manufacturing process in order

to reduce costs.

Increasing of retail price may influence customers’ decision making in purchasing

products. Many customers may not be willing to pay more for green products. To overcome

this challenge, IKEA can pay more effort in green marketing.

5. Conclusion

This paper briefly explains the framework and analyses how IKEA successfully develops

and implements the GSCM within the organization by using the framework. Apart from the

organization itself, cooperating with suppliers (in products design, sourcing & manufacturing)

and consumers (in marketing and reverse logistics) is also required.

Reference

17 Top Companies That are Going Green in 2019. (2019). Retrieved from

https://www.conserve-energy-future.com/top-companies-that-are-going-green.php

53% Of Consumers Prefer To Buy From Company With Green Rep. (2007). Retrieved from

https://www.environmentalleader.com/2007/10/53-of-consumers-prefer-to-buy-from-

companies-with-green-rep/

Bhateja, A., Babbar, R., Singh, S. and Sachdeva, A (2011). Study of Green Supply Chain

Management in the Indian Manufacturing Industries: A Literature Review cum an Analytical

Approach for the measurement of performance. International Journal of Computational

Engineering & Management, Vol 13

Bhattacharjee, K. (2015). green supply chain management- challenges and opportunities.

Retrieved from Amity Global Business School, Applies Economics & Commerce Web site:

https://www.researchgate.net/publication/317936918_Green_Supply_Chain_Management-

Challenges_and_Opportunities

Circular and Climate Positive. (2018). Retrieved from

https://www.ikea.com/ms/en_JP/this-is-ikea/people-and-planet/energy-and-

resources/index.html#value-not-waste

Coca-Cola: A Case Study In Sustainability. (2011). Retrieved from

https://www.environmentalleader.com/2011/08/coca-cola-a-case-study-in-sustainability/

Design for Everyone. (2018). Retrieved from

http://www.ikea.com/ms/en_JP/this-is-ikea/democratic-design/

17 Top Companies That are Going Green in 2020

https://www.environmentalleader.com/2007/10/53-of-consumers-prefer-to-buy-from-companies-with-green-rep/

https://www.researchgate.net/publication/317936918_Green_Supply_Chain_Management-Challenges_and_Opportunities

https://www.ikea.com/ms/en_JP/this-is-ikea/people-and-planet/energy-and-resources/index.html#value-not-waste

https://www.environmentalleader.com/2011/08/coca-cola-a-case-study-in-sustainability/

http://www.ikea.com/ms/en_JP/this-is-ikea/democratic-design/

Ghobakhloo, M., Tang, S. H. & Zulkifli, N. (2013). An Integrated Framework of Green

Supply Chain Management Implementation,4(1). Retrieved from http://ijimt.org/papers/364-

K3001

Green Generation: Millennials Say Sustainability is A Shopping Priority. (2015). Retrieved

from https://www.nielsen.com/eu/en/insights/news/2015/green-generation-millennials-say-

sustainability-is-a-shopping-priority.html

Green Marketing. (2018). Retrieved from

https://www.investopedia.com/terms/g/green-marketing.asp

Inter IKEA Group Financial Summary FY18. (2018). Retrieved from

https://preview.thenewsmarket.com/Previews/IKEA/DocumentAssets/525318

Inter IKEA Holding B.V. Annual Report FY18. (2018). Retrieved from

https://preview.thenewsmarket.com/Previews/IKEA/DocumentAssets/525222

IKEA to Sell Refurbished Furniture to Boost Culture of Recycling. (2019). Retrieved from

https://www.theguardian.com/business/2019/feb/07/ikea-to-sell-refurbished-furniture-in-bid-

to-boost-culture-of-recycling

M. Björklund, Journal of Purchasing and Supply Management, vol. 17,pp. 11-22, 2010.

A. Gungor and S. M. Gupta, Computers and Industrial Engineering, vol. 36, pp. 811-853,

1999.

New ODGER Chair. (2017). Retrieved from

Premier Shares Remanufacturing Best Practice With IKEA. (2019). Retrieved from

https://www.premierworkplaceservices.co.uk/premier-shares-remanufacturing-best-practice-

with-ikea/

http://ijimt.org/papers/364-K3001

https://www.nielsen.com/eu/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html

https://www.investopedia.com/terms/g/green-marketing.asp

https://preview.thenewsmarket.com/Previews/IKEA/DocumentAssets/525318

https://preview.thenewsmarket.com/Previews/IKEA/DocumentAssets/525222

https://www.theguardian.com/business/2019/feb/07/ikea-to-sell-refurbished-furniture-in-bid-to-boost-culture-of-recycling

https://www.premierworkplaceservices.co.uk/premier-shares-remanufacturing-best-practice-with-ikea/

Ikea commits to phase out single-use plastic products by 2020. (2018). Retrieved from

https://www.theguardian.com/business/2018/jun/07/ikea-commits-to-phase-out-single-use-

plastic-products-by-2020

IKEA Supply AG. (2008). IWAY Standard. INGKA Holding B.V. IKEA. Retrieved from

http://www.ikea.com/gb/en/doc/general-document/ikea-

iwaystandard- __1364450371470

Recycling Basics. (2018). Retrieved from

https://www.epa.gov/recycle/recycling-basics

Srivastava SK. (2007). Green supply chain management: a state-of-the-art literature review.

International Journal of Management Reviews; 9(1): 53-80.

Sameer Kumar , Steve Teichman & Tobias Timpernagel (2012) A green supply chain is a

requirement for profitability, International Journal of Production Research, 50:5, 1278-1296,

DOI: 10.1080/00207543.2011.571924

Supply Chain Management (SCM). (2019). Retrieved from

https://www.investopedia.com/terms/s/scm.asp

https://www.theguardian.com/business/2018/jun/07/ikea-commits-to-phase-out-single-use-plastic-products-by-2020

http://www.ikea.com/gb/en/doc/general-document/ikea-iwaystandard- __1364450371470

https://www.epa.gov/recycle/recycling-basics

https://www.investopedia.com/terms/s/scm.asp

53% Of Consumers Prefer To Buy From Company With Green Rep. (2007). Retrieved from https://www.environmentalleader.com/2007/10/53-of-consumers-prefer-to-buy-from-companies-with-green-rep/
Bhateja, A., Babbar, R., Singh, S. and Sachdeva, A (2011). Study of Green Supply Chain Management in the Indian Manufacturing Industries: A Literature Review cum an Analytical Approach for the measurement of performance. International Journal of C…

https://www.environmentalleader.com/2011/08/coca-cola-a-case-study-in-sustainability/

Green Generation: Millennials Say Sustainability is A Shopping Priority. (2015). Retrieved from https://www.nielsen.com/eu/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html

Green Marketing. (2018). Retrieved from
https://www.investopedia.com/terms/g/green-marketing.asp

Ikea commits to phase out single-use plastic products by 2020. (2018). Retrieved from https://www.theguardian.com/business/2018/jun/07/ikea-commits-to-phase-out-single-use-plastic-products-by-2020
Srivastava SK. (2007). Green supply chain management: a state-of-the-art literature review. International Journal of Management Reviews; 9(1): 53-80.
Sameer Kumar , Steve Teichman & Tobias Timpernagel (2012) A green supply chain is a requirement for profitability, International Journal of Production Research, 50:5, 1278-1296, DOI: 10.1080/00207543.2011.571924
Supply Chain Management (SCM). (2019). Retrieved from https://www.investopedia.com/terms/s/scm.asp

What is an Executive Summary ?

🔷 An executive summary previews the main points of an
extended business document

🔷 It is written for nontechnical readers who don’t have time to
read the whole document or interest readers to read
the whole document

🔷 It contains enough information for a reader to get
familiarized with what is presented in the full document
without having to read it

Features:

Sufficient information
Providing an overview of a long
document or presentation with a
clear enough understanding that
the reader can make a decision
based alone

Intrigue readers
Creates value for the reader
as a first impression and
generates interest in
viewing the rest of the
content

Can Stand Alone
Conveying key points
and conclusions

Keep Simple & Short
Usually no more than

~10% of the main
report

Write the summary after you write or familiarize the main
report, and make sure it is no more than 5～10% the length
of the main report

7 Steps : Write a simple declarative and appealing sentence for each
of the main points, as directly as possible

Capture the purpose and the main conclusions or
recommendation(s) in one or two sentences

List the main or key points the summary will cover in the
same order they appear in the main report

Close with a brief summary and reiteration of the main idea

Read the summary slowly and critically, making sure it
conveys your purpose, message and key recommendations.
Make sure the readers to be able to skim the summary
without missing the point of the main report

Double check for errors of style, spelling, grammar and
punctuation. Ask help to proof read and edit the document

An Example

Problems
Facing
Ford

Executive Summary
The environment in which the automobile industry operates is continuously
evolving. Perhaps no one knows this better than Ford Motor Company. Until
recently, Ford was able to operate with a fundamentally flawed business
structure; however, its failure to reconcile weaknesses was highlighted
because of increased competition and gas prices. Going forward, Ford needs
to focus on strengthening its fundamentals and streamlining its business
processes, as well as developing technology to better serve the growing
demand for greater fuel economy.

Problems Facing Ford
The fundamentals that Ford failed to execute include managing costs,
maintaining good supplier relations, utilizing internal resources, and planning
for the future.

• In

06, Ford spent $3.5 billion on insurance benefits for 570,000 current and past
employees, adding $1200 to the ticket price of each car.

• Rather than striving for a mutually beneficial relationship with its suppliers, Ford
takes the “crush their bones” approach, forcing unrealistic price reductions that
squeeze the suppliers, often driving them into bankruptcy. This approach is
detrimental because Ford’s high expectations can lead to lower quality goods as
suppliers try to meet Ford’s requirements.

• Until 2006, Ford was structured so that each regional unit operated autonomously.
This breakdown of communication made business inefficient.

• The unprecedented growth in models vying for customers in the U.S. has ended
the Big Three as we know it. In 2002, there were 215 models and a 50 percent
increase is expected by the decade’s end.

Recommendations for Ford
It is necessary to develop a set of best practices and capitalize on opportunities for
future growth by doing the following:

• Adopt an open book management approach when negotiating with unions
and employees to reduce its employee health care and pension costs.

• Benchmark Toyota’s supplier relations and production line efficiency.
• Capitalize on its reputation as America’s number one selling truck for the past

31 years, by incorporating hybrid technology into its light truck segment.

Conclusion
Ford’s fundamental weaknesses include cost management, supplier relations,
utilization of internal resources, and planning for the future. To address these
problems, Ford needs to adopt an open book management approach, develop a
set of best practices that parallels the business processes of efficient industry
players, and become the number one producer of hybrids in the light truck
segment.

Title

Introduction
Paragraph

Statement of main
problems and
explanation

Concluding
Paragraph

Statement of main
recommendations

An Example

The environment in which the automobile industry operates is
continuously evolving. Perhaps no one knows this better than
Ford Motor Company. Until recently, Ford was able to operate
with a fundamentally flawed business structure; however, its
failure to reconcile weaknesses was highlighted because of
increased competition and gas prices. Going forward, Ford
needs to focus on strengthening its fundamentals and
streamlining its business processes, as well as developing
technology to better serve the growing demand for greater fuel
economy.

Problems
Facing
Ford
Introduction
Paragraph

An Example
The fundamentals that Ford failed to execute include managing costs,
maintaining good supplier relations, utilizing internal resources, and
planning for the future.

In 2006, Ford spent $3.5 billion on insurance benefits for 570,000 current
and past employees, adding $1200 to the ticket price of each car.

Rather than striving for a mutually beneficial relationship with its suppliers,
Ford takes the “crush their bones” approach, forcing unrealistic price
reductions that squeeze the suppliers, often driving them into bankruptcy.

This approach is detrimental because Ford’s high expectations can lead to
lower quality goods as suppliers try to meet Ford’s requirements.

Until 2006, Ford was structured so that each regional unit operated
autonomously. This breakdown of communication made business
inefficient.

The unprecedented growth in models vying for customers in the U.S. has
ended the Big Three as we know it.

In 2002, there were 215 models and a 50 percent increase is expected by
the decade’s end.

Problems
Facing
Ford
Statement of main
problems and
explanation

An Example
It is necessary to develop a set of best practices and capitalize
on opportunities for future growth by doing the following:
Adopt an open book management approach when negotiating with unions
and employees to reduce its employee health care and pension costs.
Benchmark Toyota’s supplier relations and production line efficiency.
Capitalize on its reputation as America’s number one selling truck for the past
31 years, by incorporating hybrid technology into its light truck segment.

Problems
Facing
Ford

Ford’s fundamental weaknesses include cost management, supplier relations,
utilization of internal resources, and planning for the future. To address these
problems, Ford needs to adopt an open book management approach, develop
a set of best practices that parallels the business processes of efficient industry
players, and become the number one producer of hybrids in the light truck
segment.

Concluding
Paragraph
Statement of main
recommendations

A Few Tips

1
The Executive
Summary is all
about getting
critical
information into
a boss’s hands so
s/he can make a
decision. Keep it
as short and as
complete as
possible.

2
Keep your main
points in mind as
you write the
summary. You do
not need to include
every point in the
summary, but
ensure that the
major ideas are
covered succinctly.

3
No need to cite
references, but if you are
summarizing another
work, introduce the
document in the opening
paragraph. Provide
enough reference
information for your
reader to easily find the
original document.

4
The most important
outcome of an
Executive Summary is
that the reader would
be able to make a
decision based
exclusively on the
information
presented in the
Executive Summary.

A longExecutive Summary – 2 pages

A lo
ng

Exe
cuti

Sum
mar

y –
2

pag
es

PPT
Executive
Summary

• Highlights
• Easy for “quant.” analysis

Remember

Executive
Summary is a
Potential
Winner!

The most important outcome of
an Executive Summary is that the
reader would be able to make a
decision based exclusively on the
information presented in the
ExecutiveSummary.

Executive Summary precedes
your business plans, resume,
documents of great
importance, etc. Thus, it is of
utmost importance that the
executive summary is full-
proof without any error and
contains only important
matters.

Assignment #1
— Executive Summary

Ø Max 1 Page; Font 12 with double space;
Ø Due: Feb 2 (Wed) by 12pm (noon)

Turn in your highest-quality paper
Get a qualified writer to help you with

“ Executive Summary ”

Get high-quality paper

NEW! AI matching with writer