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ДОБРЕ ДОШЛИVÄLKOMMEN

WELCOME04.02.2016, Sofia, Bulgaria

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What will we share today?

Purchasing Operations area South East Europe

Taskforce Bulgaria project

Doing Business with IKEA

Start –up a supplier – general information

IWAY standard and Code of Conduct

Quality in focus in everything we do

Forestry and Better Cotton

Supplier classification

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Egypt

Moldova

Bulgaria

TurkmenistanTurkeyGreece

Macedonia

Bosnia Serbia

Romania

What means Purchasing SEE?

120 home furnishing suppliers in more than 11 countries

162 people working in Purchasing

3 offices

36 average age

aprox 10% from total IKEA Purchasing

Purchasing SEE in IKEA Purchasing

Out of

34 Categories

15 have business teams

located in SEE

~ 44 people

working in Purchasing SEE

~ 80 people working in

business teams

Out of

7 CAs

5 are present in SEE

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Some products made in SEE …

Taskforce Bulgaria

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H i s t o r y

IKEA is sourcing products in Bulgaria from the ‘70s

Business started with wood articles, mainly pine

Historically Bulgaria was strong in Wood, Metal, Glass, Ceramic

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IKEA has a growth agenda & defined a long term strategy to double the business until 2020

IKEA would like to expand also the supplier base and continue to develop together with the

existing ones, products with good quality, low price, sustainable and available

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Bulgaria- Balkan FY15

January 2015 we got a task to exploit further the business possibilities in Bulgaria

Main goals:

• Develop and continue the growth with the existing suppliers

• Industry mapping in Bulgaria

• Select the right new partners/suppliers for IKEA

From 3rd of May - 9th of May 2015 Ingvar Kamprad together with IKEA purchasing people and

designers met existing IKEA suppliers and potential new ones

End of an inspiring week full of energy, good discussions, nice moments and a lot of learning

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Some pictures from the visit

Bulgaria- Balkan FY15

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Some pictures from the visit

Bulgaria- Balkan FY15

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Some projects on going …

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Some projects on going …

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Updates Bulgaria Task force wk 19

Overall summary from the project

Expected Turnover 18- 20 MEUR

9 Potential new suppliers in pipeline

2 solid wood

1 layer glued

1 combined materials – metal, plastic,

wood, solid wood

1 Flat line

1 Wool carpets and blankets

1 Mattress and bed base

2 Aluminum

51 New articles started or under

development from May 2015 until

now.

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Next steps

Develop and Continue the growth with the existing partners

Industry mapping in Bulgaria

Select the right new partners/ suppliers for IKEA

Continue and finish the projects already started

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DOING BUSINESS WITH IKEA

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Where we come from

A little about us

The IKEA Concept was born

in southern Sweden, in the

barren landscape of

Småland. Our values of e.g.

togetherness, humbleness

and thriftiness grew out

from this background.

IKEA values: Ten key expressions

summarizing the IKEA culture

• Leadership by example

• Simplicity

• Striving to meet reality

• Constantly being on the way

• Cost-consciousness

• Constant desire for renewal

• Humbleness and willpower

• Daring to be different

• Togetherness and enthusiasm

• Accept and delegate responsibility

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1. IKEA BUSINESS MODEL

Bringing suppliers and customers closer

A little about us

The need of our customers

The possibilities at our suppliers

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price in practice

Creating the low price in practice

by work in the reality of our

customers and suppliers at the same

time.

Focus on customers

Focus on suppliers

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“Our suppliers and customers are our best

friends. The IKEA Concept is there to

shorten the distance between them.”

IKEA founder, Ingvar Kamprad

Customers

Suppliers IKEA

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What can you as a supplier expect of IKEA?

Profit and growth from volume and by

growing IKEA together.

Become global industry leader

Our constant desire to reach more IKEA

customers with better products at lower

prices drives development, and the

growing volumes becomes our enabler to

develop.

Knowledge transfer

IKEA provides knowledge about the

customers, life at home and the product.

We can also offer industry reference, ideas

and knowledge on how to improve

production.

Become global industry leader through low costs and big volumes

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Everyday product quality:

well-designed, functional,

customer-friendly, durable and

safe to use

Products always available,

a prerequisite for sales

High social &

environmental

responsibility, a foundation

for our business

We reduce cost to ensure

affordable products for the

many people

We develop these qualities in synergy.

A little about us

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• to buy big volumes

• to be reliable, purchasing commitment

• to offer long-term business cooperation and orders

• to pay on time (30 days)

• to adapt our products to production

• to contribute to efficient production

• to care for the environment

• to support material- and energy saving techniques

• to take a clear standpoint on working conditions

• to respect different cultures

• to have clear and mutually agreed commercial terms

• growth

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What can you as a supplier expect of IKEA?

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What does IKEA expect of you as a supplier?

Growth

• Shared business model and values

• Low costs & big volumes

• Everyday performance

• Everyday development

• High Quality Standard

• High Social & Env. Standard

• High Availability

• High efficiency, production

competence and product competence

• Ability to grow

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Our range. Our identity.

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Our range. Our identity.

- IWAY standard and Code of Conduct- Quality Compliance Standard (GO/NOGO)- Forestry- Supplier Classification

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Sustainability

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What does IKEA expect of you as a supplier?

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The IKEA IWAYstandard

Minimum Requirements for Environment, Social & Working Conditions

when Purchasing Products, Materials and Services.

In the best interest of …….

the workerthe child the environment

2011-10-21 Version 1.2

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2011-10-21 Version 1.2

IWAY Implementation

Forestry

We have strong and clear forestry requirements and make sure that 100% of the wood we use meets these standards.

We support the Forest Stewardship Council (FSC), and we have helped to certify over 35 million hectares of forest, which is about the size of Italy.

Our goal is to have all wood come from sustainable sources (FSC or recycled) by 2020.

2011-10-21 Version 1.2

Forestry

For our region100% FSC is a must from 1 Sep 2016

2011-10-21 Version 1.2

Better Cotton

Our cotton is grown in line with the standards of the Better Cotton Initiative, benefiting farmers and the environment.

So far, we’ve worked with over 110,000 farmers to reduce the amount of chemicals required, helping reduce pollution and strengthening local economies.

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Quality Compliance Standard Package

(GO/NOGO)

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Whatever the Customer purchases shall give long-term enjoyment”.

Ingvar Kamprad

“The Testament of a Furniture Dealer”

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• be in compliance with all relevant legal requirements and market regulations;

• be safe to use and not present any foreseeable health and safety risks;

• have clearly defined, implemented and verified product requirements;

• be durable, functional, customer friendly, well designed and produced in a

sustainable way, resulting in well finished products. The low price is only

meaningful when the above characteristics meet and exceed customer needs and

expectations.

The IKEA products shall always

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Standard (GO/NOGO)

It’s a Compliance Standard

It’s legal agreement

Must be always fulfilled

Requirements audited every 2 years

5 sharp requirements: Product documentation, Connect system, Special processes – process control, Final inspection, Identification and separation of non-conforming goods

Supplier Classification

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IKEA Prioritized Supplier (P)

IKEA Potential prioritized Supplier (T)

IKEA Critical Supplier (C)

IKEA Supplier (S)

IKEA Product development/ Innovation Supplier (I)

Supplier Classification

Customer in focus in everything we do!

IKEA suppliers – our partners for growth

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Thank you!

Any questions?