IKEA and RFID Technology

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27 Νοε 2013 (πριν από 3 χρόνια και 6 μήνες)

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IKEA and RFID Technology

Improving the Level of Service

27/03/07 Mikael Blomberg

CSE 6002R

Introduction Services Science, Management and Engineering

Final Paper Presentation


Introduction, Scope of the Paper


What is RFID Technology?




Effective use of modern IT can be seen as a
requirement to succeed in the markets

...although IT system is not a shortcut to success

IT system needs to be implemented on the needs
of business

The final paper concentrates on the problems in
IKEA’s business and presents possible solutions

The focus of the paper is in the end of the supply
chain, in the interaction between IKEA and the
final customer

IKEA (1)

IKEA sells low
price home products,
including furniture, accessories,
bathrooms and kitchens

The chain has 251 stores in 34

On year 2006 IKEA opened globally
16 new stores

IKEA (2)

One of the fundamental innovations made
by IKEA is definitely the concept of self

It requires lots from the system that is
built around it

RFID technology can be seen as a part of
the system that supports the self service

Observations have been made during
numerous visits in IKEA’s retail store in
Espoo, Finland

RFID Technology (1)

RFID (Radio
frequency Identification) is an
automatic identification method

RFID tags are used to store and remotely retrieve

The RFID tag has an antenna which responds to
the transponder (reader) and sends the

The information in the tag can be read many times

In some tag types the information in the tag can
also be rewritten

RFID Technology (2)

The main division of RFID tags is between
active and passive tags

RFID tags operate using different

Low frequency tags (30
300 kHz)

High frequency tags (3

high frequency

Most likely the suitable tag type for IKEA
would be passive HF tags (13.56MHz)

Problem 1: Long queues

Long queues increase the amount of
misplaced products, and decrease
customer satisfaction and gained revenue

Products may be big

Products may be difficult to handle

Solution: RFID equipped cash desks

Problem 2: Difficulties with self service

Customers need to search for the correct
product from the huge warehouse

Certain customers may get frustrated

IKEA needs to hire employees to help
customers to find the correct product


”Smart shelves” and Personal Shopping
Assistant (PSA)

Problem 3: Sharing accurate availability

Customers do not want to come to the
store just to notice that the product they
wanted is out of stock

“Showrooms” may contain some
interesting product but the customer
cannot know if the product is really


More visible stock information and

Electronic Price Labels (EPC)

Problem 4: Effective home delivery

One IKEA retail store usually serves a
wide area the distances can be long and
locations scattered

IKEA retail store needs to have effective
transportation system


Tighter connection between the IT system and
home deliveries through RFID technology

Problem 5: Theft Prevention

IKEA’s product selection includes products
which are small but still relatively


RFID tags working as a part of Electronic Article
Surveillance (EAS) system

Problem 6: Recycling

In the future environmental regulations
will become stricter

Companies may need to accept the used
product back and recycle it


RFID tags containing the recycling information


Product level tags will be reality in the
near future

RFID technolgy could give several
benefits for IKEA

The importance of careful planning and
patience to develop the system cannot be

RFID technology will require lots from the
supporting service and IT infrastructure