Ikea – Ethical Supply Chain

IKEA – Ethical Supply Chain

Background

IKEA which is founded in Sweden is a multinational company that designs and sells ready-to-assemble furniture, appliances, small motor vehicles and home accessories. As of January 2008, it is the world's largest furniture retailer. Even it operates restaurants which serve traditional Swedish food in its each store.

The IKEA Way (IWAY) is the code of conduct for the suppliers and IWAY Must which is a set of essential requirements is necessary for the new suppliers to be fulfilled before signing a purchase agreement. Both of them contribute IKEA and its suppliers to be an ethical and sustainable business.

There are three aspects demonstrating that IKEA is undergoing an ethical supply chain: human resources management, ecological management and operations management.

Human Resources Management

IKEA are committed to providing a stimulating, inclusive and diverse workplace where people are appreciated and have the chance to grow through the following measures:

1. Tack!

Since 2013, there was a new loyalty program ‘Tack!’ which aims to support retired co-workers as an additional fund to pension plans, for compensating their longtime contribution. It applies to workers who have been with IKEA for five years or more.

Under the Diversity and Inclusion Approach (2&3):

2. The IKEA Women’s Open Network (IWON)

In order to achieve the goal of gender equality, it attempts to inspire, connect, empower and enable women in leadership positions at IKEA. Last year, the share of female workers and managers was 54% and 47% respectively.

3. Working Group on Lesbian, Gay, Bisexual and Transgender (LBGT) rights

The mission of the working group is suggesting ways to communicate inclusion, hence ensuring that LGBT workers feel respected for their sexual orientation.

4. Safety Performance Plans and Training

To build a healthy and safe workplace for workers, IKEA Industry Group which is responsible for manufacturing and distributing wood base furniture have safety performance plans and its management teams has been trained in ‘leading safety in 2013. It turned out the decline in occupational accident rate at IKEA Industry per million hours worked where 4.57% in 2014 was compared with 6.27% in 2013.

5. VOICE – Online Survey

VOICE is conducted by an independent organization. It helps IKEA gain insight into the needs of their workers and then identifies ways to improve. In 2014, more than 60% workers participated in this survey.

6. Financial Aids

In