You have likely had the questionable pleasure of shopping for furniture at Ikea. I bought a dresser for my son Juha at Ikea. When assembling it, I was reflecting on the discussions we had at work the past week on the logistic performance of manufacturers. Sure, Ikea has massive volumes when compared to a Finnish machinery manufacturer, but it’s still an excellent benchmark.
The quality experience of Ikea logistics starts with the self-service warehouse. Once you have finished with designing everything you need in the department showroom, you receive a picking list for the self-service warehouse. The picking list is clear and ordered by locations. You can find the correct warehouse location even if visiting the facility for the first time. If the product requires two boxes, it states so both on the picking list and at the warehouse location. The flat, well-designed boxes can easily be combined to create a large load without damaging them during transport.
The logistic quality experience continues during assembly. In this case, there were two bags of assembly hardware in the box. One bag was for assembling the drawers and the other was for the frame. Once I had gone through the contents of a bag, I was pretty sure I had completed all the required steps for that assembly phase. I didn’t need a single supervisor with a yellow and blue shirt to search through the warehouse for parts, identify parts or to verify that everything was in order. Finally, once all the packages were empty, I knew Juha’s dresser was good to go.
What can Ikea tell us about logistic quality? Firstly, the packaging of parts and components must be considered from a perspective of where they are to be used. We are considerably behind in this area when compared to the rest of Europe. Here’s a few examples of this; 1) packaging instructions are very rare. The concept ‘Plan for Every Part (PFEP)’ is rarely encountered. 2) Very few companies include small sub-components in stock rotation. Together, the aforementioned deficiencies result in a lot of unnecessary bulk sorting during receiving and picking.
The supervisor at an assembly line is often responsible for figuring out what components are needed for assembly and then tracking down the missing parts. This consumes energy and work hours. Clearing up the messes is considered ‘business as usual’. If 25 % of these work hours were used to fixing the master data, everything would be in order in six months. I’ve noticed that the locations that still use production line inventories where the installers do the picking, the real reason for the line inventories is the poor quality of the master data. The same places also usually have a lot of inventory errors, which directs purchasing to buy at the wrong times. This is a cycle where purchasing, logistics and manufacturing are all blaming one another, even though the real culprit is bad data. This destroys efficiency and logistic quality.
What do I recommend?
1. Fix the master data. Acquire a MES or another system where errors can be reported to planning easier, faster and more accurately than with any other system.
2. Adopt 100% picking (no assembly accessories). This improves the assembly work considerably and also results in the rest of the data to be corrected. Space is used more efficiently and inventory balances are accurate.
3. Create ‘Plan for Every Part (PFEP) packing instructions and adopt small-component stock rotation.
These three steps will allow you to ensure quality and efficiency, in addition to creating the foundation for outsourcing warehouse automation or warehouse logistics. The consultants at Leanware have experience with helping you accomplish these three steps.
I hope that after reading this, every time you see the Ikea logo, you consider the logistic performance of your home base. Could something be done better?