Great post, Andie!
As a big fan of Ikea, it was interesting to learn more about how they actually do it! I found the huge network of suppliers especially interesting, because we often consider vertical integration to be an operational boon. In this case, a spread out supply chain allows Ikea to maintain low cost. However, Ikea is also known for its sustainability and leading eco-friendly products. For example, they’ve gotten rid of formaldehyde in all of their lacquers. I imagine the disparate suppliers make those kinds of initiatives incredibly difficult to roll-out and enforce. While they don’t get to take advantage of in-house economies of scale, I think their huge network allows them to capture it in a different way. They’re such a big player, their suppliers don’t want to lose them!
Great article, Andrew!
Tackling a public organization for this assignment seemed daunting to me. From the outside, the majority of transit organizations seem so misguided and operationally inefficient, but you bring up a lot of reasons why it’s actually quite difficult to reverse this. Attracting the right talent and changing the mindset from “funded by the state” to “funded by ourselves” is incredibly difficult to encourage, especially when the organization has notoriously avoided innovation and budget consciousness.
With the continued decline of American car-ownership, I am curious how transit agencies can continue to run safely and sustainably, while also upgrading their infrastructure. I guess we just need people like you to join the fight!
I am curious how their operations model differs from other fine jewelers. Harry Winston is certainly in a class of its own, but surely others operate similarly? The vertical integration piece does seem incredibly important for quality control and cost reduction. I also agree with Mark about their core competencies though. Mining vs jewelry design and the sustainability of partnerships to do both.