IKEA, the Swedish company specialising in home furniture and furnishing solutions, is easily recognised by its blue and yellow store branding. The new Perth IKEA store, now situated in Innaloo Perth, Western Australia, can fly many blue and yellow flags as it is one of the largest single tenanted retail outlets in Australia and one of the largest IKEA retail stores in the Southern Hemisphere. Cebas Pty Ltd is the franchise owner of IKEA in Western Australia, South Australia and New Zealand.
IKEA Perth was first established in 1986 located in Osborne Park Perth, Western Australia. The original store size was 6,500 square metres. That store has been relocated to a new site and increased to 26,400 square metres, with the recent opening on Valentine’s Day, 14th February 2008.
The idea behind the IKEA concept is to “offer a wide range of well-designed and functional home furnishing products at prices so low that as many people as possible will be able to afford them”. The IKEA vision is “to create a better everyday life for the many people”.
From the old…
The old IKEA store was based on a ‘full serve’ principle, where all furniture items purchased by customers were picked by IKEA workers out of a conventional warehouse. The new store concept allows customers to pick their own orders from a ‘self-serve’ warehouse area of the store.
The old store operated from three different warehouses, these being the main warehouse situated in Kewdale Perth, Western Australia as well as two picking warehouses that were semidetached to the store proper (then based in Osborne Park, Perth, Western Australia).
Daily replenishments to the Osborne Park complex from the Kewdale main warehouse consisted of four to six trucks per day. All containers from international suppliers were unpacked at the Kewdale warehouse and then shipped to store. The old store’s size and warehouse space availability were everyday problems.
The Kewdale warehouse received up to five containers per day, with the range at the old store consisting of 4,500 articles. The new store holds 6,500 items and is set to increase to 8,500 in the future. The volumes and demand speak for itself, hence the requirement for a new IKEA store that is planned to sell over 90,000 cubic metres of product in the 2009 financial year.
A big challenge was how to ‘educate’ loyal IKEA customers on the use of the large new ‘self-serve’ area, because for the past 21 years in Perth, IKEA workers had picked all the furniture orders. It was now up to the customer to use the IKEA sales system to identify where the products are located via the information contained on the price tag. Once the product is selected, customers then travel through the store until they reach the self-serve area, where they then can locate their purchases through the aisle numbering sequence.
This process resulted in the necessity for a racking system that is easy to use as well as contributes to a pleasant environment for the customer, which is critical for the success of the store concept.
Fitting out
When building the new store, IKEA had to make sure that all fixtures, fittings, the visual aspects and layout of the store were compliant with the IKEA international concept, with the final product having to be signed off by IKEA Systems B.V. based in Delft, Holland. It is important for IKEA that when a customer walks into the IKEA store in Perth they should see no difference between the Perth store compared to any other IKEA store found anywhere in the world.
During the equipment tendering process it was important for IKEA to consider the use of local suppliers. Price was an element in the decision, however, it was equally important that the chosen suppliers of goods and services were able to support the tender submission with project management leadership, installation staff as well as a manufacturing and fabrication capability.
The project time to deliver all articles into store and construct the racking and retail fixtures was reduced by six weeks due to IKEA wanting to open the store earlier than the originally planned construction completion date.
The racking configuration is unique as IKEA stores articles on Euro pallets, these being ‘long and short’ in size, which is very different to conventional racking configurations used for standard Australian pallets.
A major challenge for the racking supplier, APC Storage Solutions, was to have a clear understanding of IKEA’s requirements, as this was not a simple warehouse racking configuration but a configuration specific to an IKEA retail store environment.
The scope of racking supply was consequently not simply ‘frames and beams’ but also involved specific retail signage and display items attached to the racking. The colours of the racking were also extremely critical in conforming with the IKEA concept, which resulted in special powder coating being employed to ensure that the high standard of this retail environment was achieved.
Housekeeping was also a real challenge as construction of the building was still in progress while the installation of the racking was taking place.
The floor structure of the building is unique and required attention from all parties. The whole warehouse is on the first level above the car park, and the racking was to be installed on a suspended floor with many high-tension tendons running through the floor base. This meant that there were many restrictions when it came to fixing anything to the floor. The design team at APC Storage Solutions was able to accommodate the issue of warehouse floor deflection, by incorporating clever design concepts to its racking system.
Due to the tight timeframe of the build, it was important that IKEA could gain access to the racking quickly in order to enable immediate load-in of articles into the store. The opening date of 14th February had been set and was well publicised, so any change in the time-lines had to be borne inside the project. The key time pressure came from the long lead times for furniture products to be shipped from Europe to Perth. In some cases, products were dispatched from factories in Europe before the racking installation even started.
Departments such as sales, communication and interior design required time to set up the store and create the display sets, as well as the inspiration that makes an IKEA store unique compared to those of its competitors.
It was up to the logistics areas of the store to make up the lost time.
Safety was also a major concern and it was important for IKEA and the building unions to demonstrate sound and efficient methods of racking installation.
Every problem is an opportunity The key to successful implementation of the project was to work closely with the racking supplier. APC re-arranged its own production scheduling and storage facilities to hold materials slightly longer than originally anticipated, due to some building construction delays.
Toyota Materials Handling WA was also more than willing to help with short-term rental equipment, as well as the loan of a number of European pallet jacks. IKEA enjoys global purchasing power of materials handling equipment so was able to purchase the MHE through its global IKEA supplier, however, Toyota Materials Handling WA was also willing to assist with any requests for information and advice as well as any equipment need that could be supplied locally.
Having so many containers of store-bound stock either on the ocean or in the port, it was important to establish strong working relationships with all shipping lines. There would be over 200 containers of product and general fixtures to pass through the port and local infrastructure, and all had to be received into the store in a short delivery window of six to eight weeks. All shipping lines were prepared to work closely with IKEA and were flexible to its needs.
APC Storage Solutions is part of the APC group of companies and was carefully selected by IKEA for the successful implementation of racking and fixtures for the new store. APC established a dedicated site office from which its project manager operated. This enabled real-time co-ordination between staged deliveries of components to site, construction progress, as well as being sensitive to special union site safety requirements. The APC Group complied with the latest in Occupational Health & Safety (OH&S) requirements by formalising tailor-made procedures for this project and working closely with IKEA, the unions and construction company.
It was important for IKEA to gain access to certain sections of the racking so as to initiate a staged load-in of product, so a staged handover of racking was agreed. APC altered its OH&S plan so as to ensure safety on site and this enabled IKEA to stay on track with its goods receiving schedule. This was discussed during early project meetings and also resulted in APC introducing new frame lifting installation technology. This equipment was designed by APC and then independently tested and certified for use on this complex site, and proved to be a real hit with IKEA and the union, ensuring a quick and smooth transition in a safe and staged handover of racking for IKEA to load.
The size and complex scope of the project required a close working relationship and co-operation between IKEA and its shipping lines, APC Storage Solutions, Toyota Materials Handling WA as well as the engineering teams, the builder Multiplex and the union.
For more information contact APC Storage Solutions on 1300 138 303 or visit www.apcgroup.com.au.
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