INGKA Group (an IKEA Retailer) is in pursuit of process excellence and what it calls "The Perfect Order," a uniquely IKEA experience enabled by data and insights, excellence in operations, simplification, standardization, scalability and efficiency.
Speaking at Celosphere 2022, INGKA Group's Tim Hills, Process and Data Insight Development Manager, outlined the retailer's process excellence journey with Celonis. Ingka has about 500 million events in Celonis and nearly 50 million orders. INGKA is aiming for the "The Perfect Order," a North Star KPI that would represent the flawless taking and fulfilling of a customer order.
INGKA's plan is to explore those events and orders and continually improve them. Why? INGKA's goal is to leverage process and data insights into their operations, to make every decision better in all aspects of affordability, accessibility, and people and planet positive. The realisation of the actions will also contribute to an excellent omnichannel experience for more of the many, and operational excellence.
The retailer carries out its pursuit of the perfect order with a Process & Data Insights Lab, which aims to create a movement of achieving operational excellence with existing capabilities and identify and validate critical development opportunities.
INGKA has an eight-step process to improve processes. Here are the steps:
Data. Always start with the data.<!— htmlmin:ignore —>
Engagement. Collaborate with country management for sponsorship and align with the business plan.<!— htmlmin:ignore —>
Possibilities. Scan the data, identify use cases, and build the dashboard.<!— htmlmin:ignore —>
Win-win. Align with sponsors to agree on use cases to investigate.<!— htmlmin:ignore —>
Workshop. Bring in specialists to investigate process improvement and data opportunities.<!— htmlmin:ignore —>
Define and refine. Answer questions and refine data.<!— htmlmin:ignore —>
Make it happen and share best practices. Management of country-specific operations take actions they control.<!— htmlmin:ignore —>
Highlight potential. Quantify bigger INGKA changes and share learnings across markets.<!— htmlmin:ignore —>
This eight-step way of working was trialed and iterated towards operations in the UK and Ireland. INGKA was looking to reduce click and collect failed pick-ups and cut multiple customer service interactions on a single order, a challenge still under investigation.
Ultimately, INGKA focused on how the UK could reduce failed pick-ups. The group set out to review appointment slots, improve ways of working and focus on picking efficiency. Customer communication would also be a linchpin.
INGKA found that a customer created a shopping basket and wanted to pay but had other checkout steps including scheduling a pickup. Initially, pickup scheduling had a collection window between 1 hour to 8 hours. That range meant more stock had to be held and increased potential damages and repicks of goods. Ultimately, INGKA found that a smaller window reduced cancellation rates and in-stock issues and improved customer satisfaction. That one example illustrates a small component of pursuing the perfect order.
Ultimately, INGKA have identified four things - business and knowledge experience, data representing the operation, capability and tooling and continuous improvement mindset - to resolve challenges.
Hills said INGKA has learned a lot in pursuit of the perfect order and the retailer will keep moving with a holistic view of the end to end process, a data-driven approach to decision making and selection of impactful actions to move from where the company is today to where it wants to be.
A quote from IKEA’s founder sums up the current thought process: “Happiness is not reaching your goal. Happiness is being on the way. It is our wonderful fate to be just at the beginning. In all areas. We will move ahead only by constantly asking ourselves how what we are doing today can be done better tomorrow.” – Many things remain undone. A glorious future.
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