Need to Know
- Ikea has plans to overhalls its food division with the help of software provider JDA.
- The new digital solution will apply a similar supply-chain precision used to manage Ikea’s inventory of flat-packed furniture to its meatballs and other popular food items.
- The project starts with digitizing receiving. Ikea workers will have scanners to track food inventory as it arrives and moves around the store, providing real-time information to the chef and other kitchen staff.
- Digital dashboards will display important information like incoming deliveries, staffing, and predicting peak times.
- The system will also come equipped with chatbots that can relay important inventory information to chefs, like how many meatballs are on hand and when they expire.
- Food services account for nearly 5% of IKEA’s retail sales and generated around $2.37 billion in sales last year.
The meatball business is booming for IKEA. Know globally for its flat-packed furniture and DIY assembly, the retailer has decided to apply the successful supply-chain techniques used through its warehouses to its food division.
“You need to find every single corner where you can cut costs, and the supply chain is the core of that,” Lars Gunnarsson, Ikea food services deputy business manager and digital transformation leader told the Wall Street Journal. “We’ve been doing it for furniture for many, many years. So basically we’re going to apply the same business model and thinking to food.”
The overhaul will be led by JDA Software and feature numerous upgrades to the food division operational systems. Currently, Ikea uses paper and spreadsheets to track the flow of food products so the ability to connect hundreds of store operations through the use of technology has its advantages, most notably efficacy.
The new digital plan will mirror operations from the furniture side of the business, tracking broccoli freshness and total meatball counts. Armed with portable scanners, workers will be able to track inventory levels of food products in real-time as they move from location to location, sending updates to the chef as needed.
Digital dashboards will display peak times and incoming deliveries, which aids in predicting staffing needs. Chatbots will also be available to chefs to help them control inventory management and best before dates on perishable items.
Ikea’s food category is a lucrative one, introduced soon after opening its first store in 1958, it now accounts for roughly 5% of Ikea’s retail sales and generated around $2.37 billion in sales last year.
Ikea’s food overhaul is the latest in a string of initiatives by the retailer to up its digital integrations. Most recently they announced plans to add their DIY approach to a customer data control system, allowing customers to decide what information is collected and just how it’s used. Ikea also has plans to interject more tech into the home with smart home automation offerings.
Ikea’s new digital supply chain program will debut this fall with a test run in Croatia. There has been no word yet when the rest of their locations can expect the meatball overhaul.