Profit from the pallet

Profit from the pallet

IKEA is a brand like no other, with their ethos of good design being “the perfect combination of form, function, quality and sustainability, all at an affordable price” making it a furniture juggernaut. The company has proven that small savings in ‘logistics-based design’ can have a big impact on that affordable price.

The news in December that IKEA will soon be arriving in New Zealand reminded us of this Dezeen interview with IKEA’s design manager Marcus Engman. The article contains this interesting snippet:

However the design team is also tasked with keeping prices affordable, spending a lot of time considering how each product will pack and ship efficiently.

“One of the biggest costs when it comes to producing or doing product development is logistics,” said Engman. “And if we could see to that on one pallet we could get a third more, just by changing the size or something by two centimetres, then of course we try to do that to be smarter.”

“One centimetre there could maybe mean 10 euros in the end on each and every product,” he added.

In 75 years the Swedish furniture retailer has become a dominant brand internationally, with hundreds of stores in 49 countries and planned expansion into Asia (and New Zealand) in the next few years.

While not the only reason behind IKEA’s global success, this unerring focus on logistical benefits is a big factor in how the company can keep costs down for their customers. And it’s why we can’t wait to visit their new Auckland store when it opens…

 

 

IKEA is a brand like no other. The company has proven that small savings in ‘logistics-based design’ can have a big impact on that affordable price.

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