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How IKEA Is Creating a Self-Learning Supply Chain

Article > Peer benchmarking tool speeds up sustainability across paper and print industries

Rotterdam, 7 oktober 2016, “I never fully realized IKEA’s true power until we did this project,” says Matthieu Leroy, Sustainability Specialist at IKEA Media Production. To improve the green procurement of paper and print for its 200-million-copy catalogue, Media Production of the furniture giant from Sweden teamed up with Except Integrated Sustainability. Together they worked with suppliers, Trade Extensions, and Deloitte on creating the world’s largest sustainability-driven Self-Learning Supply Chain.

The largest print production on the planet, the IKEA catalogue, achieved 100% Forest Stewardship Council (FSCTM) mix credit certification for the sustainable paper of all its brochures worldwide in 2014. Leroy: “That was just a hygiene factor for us. We were looking for a game changer to make the entire life cycle of the catalogue much leaner and greener.”

 So, in spring 2014, a dozen specialists from IKEA and Except Integrated Sustainability locked themselves up for a three-day innovation session at Except’s headquarters in Rotterdam to find that game changer. Fast-forward eight months, and IKEA’s purchasing managers have a brand-new purchasing interface at their fingertips that immediately starts pushing the catalogue’s ecological footprint down.

 As a result of the significant contributions from all collaborating partners, by the end of 2015, IKEA already clocked a 484 GWh reduction in energy consumption from its catalogue production process, equivalent to 145,000 Swedish households. CO2 emission from the catalogue’s production dropped 19,000 tons, the size of 20% of Belgium’s annual CO2 emissions. And these reductions are gearing up.

 System thinking identifies break-through point

Tom Bosschaert, founder and director of Except, explains: “We always look for the smartest lever to effect maximum change within a system, be it a company, the inner city of Shanghai, or a supply chain in this case.” Except used its Symbiosis in Development (SiD) framework that combines systems thinking, network theory, and life-cycle understanding to develop sustainable and resilient systems by closing physical, economic, and social loops.

 IKEA had collected high-quality Big Data about more than 100 economic and sustainability aspects of the 130 paper mills and printing factories that produce IKEA’s catalogues across the globe. These data had become simply too much for any human mind to process.

 Information waste up-cycled

“Except helped us turn this costly ‘information waste’ into a valuable ‘information resource,’” says Leroy. In the first SiD co-creation session, visualization tools offered insight into the data describing the life cycle of the catalogue from forest logging and paper manufacturing, to print and distribution, and back to recycling and reforestation.

Participants concluded that the biggest sustainability gain could be achieved through improving the impact of already-available information. They felt data sharing with and within the supply chain would enable suppliers to compete and cooperate to create the best performance for themselves and the supply chain as a whole.

Humanizing Big Data

After validating the data and calculations in IKEA’s database, researchers clustered this Big Data into 18 Key Performance Indicators (KPIs) summarizing 100 sustainability, quality, and economic metrics of IKEA’s 130 supplier locations worldwide. Next, they designed a visual interface that intuitively displays all this data at a glance.

 A screen of color-coded bar graphs gives the purchasers a quick overview of a supplier’s performance quality and sustainability KPIs. Mouse-overs reveal more granular data as needed. This design gives the user control over how they view and mentally process the data, which leads to better decisions.

 Supplier intimacy

Through the Supplier Brief, IKEA’s paper and print suppliers have access to much of the same (but anonymized) data as IKEA’s catalogue purchasing managers have through their Purchaser Dashboard.

 Purchasers can rate and rank supplier locations against any subset of KPIs. Suppliers receive information to find out where they stand in relation to other suppliers and IKEA’s green goals. It helps them prioritize their corrective actions.

As a result of this shared data and the shared language that comes with it, IKEA and its suppliers are developing greater “supplier intimacy”, as Leroy puts it. “Our negotiations have become more focused and fruitful. This tool strengthens the collaborative dynamic we seek.”

 Stakeholder impact

IKEA applies a similar logic to its relations with other stakeholders outside of the supply chain. It wants to build transparency and dialogue on the sustainability aspects of its catalogue production process.

Enter the Data Dashboard, a compact version of the Purchaser Dashboard, minus the granular data and real-time functionalities. The Data Dashboard serves critical internal stakeholders such as co-workers and retailers. The Data Dashboard shows the history, current status, and targets for 13 aspects such as input materials, energy, CO2 emissions, and waste. The aspects are presented following the standards of the Global Reporting Initiative (GRI G4).

 Data Dashboard users are invited to leave comments on the catalogue’s sustainability performance and to offer suggestions for future action. This engages this critical audience in dialogue and helps IKEA know what indicators are important to stakeholders.

 Enabler of self-learning industry

On top of that, Except developed The Story of Print to help customer-facing personnel convey IKEA’s sustainability story to its customers. Employing a storytelling approach and low information density, it informs, inspires, and invites feedback.

 “The results have been beyond our expectations,” comments Leroy. In the first year, the catalogue’s energy consumption dropped 8%, while CO2 emission went down 2%. That may sound modest, but with a print run that has an energy footprint the size of the entire South Carolina economy, this adds up to 285,000 barrels of oil left in the ground each year from now on, and the CO2 emissions of 155,000 car kilometers compensated for by IKEA’s CO2 savings. Plus, these reductions have only just started to kick in and are accelerating.

 “These dashboards are strengthening the interactive, collaborative dynamic with all of our stakeholders, from suppliers to NGOs to the general public,” notes Leroy. “I knew that, as a big player, IKEA had the leverage to drive a transition toward greater sustainability in our own paper and print supply chain. But this project has made us an enabler of network learning at an industry level. That’s far beyond what we originally expected or imagined.”

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Contact

Except Integrated Sustainability

Tim Horsten
CSR Consultant / Engineer

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Phone   +31 10 7370215

Client & Partners

Team

  • Carmen Vercauteren

    Industrial Ecologist
  • Matthieu Leroy

    Sustainability Specialist
    Inter IKEA Systems
  • Jacco Beije

    Systems engineering
    Redproc IT systems
  • Marcin Kaszinski

    back-end software developer
    Elksoft
  • Ashley Myers

    Sustainability Specialist
    Inter IKEA Systems
  • Merel Segers

    Industrial Ecologist & Sustainable Storyteller
    Merel Segers Sustainability Analysis & Communication
  • Max Senden

    Graphic Designer & Creative Problemsolver
    Studio Max Senden
  • Tijn Schmits

    Software Architect & Developer
    UpLink
  • Jessica Guerrero

    Communications Specialist
    Inter IKEA Systems
  • Betty van Dongen

    back-end software developer
    Lajos.nl
  • Frido Emans

    back-end software developer
    Lajos.nl
  • Jos de Witte

    front-end software developer
    Lajos.nl
  • Joao Carmona

    front-end software developer
    De Voorhoede