IKEA doubles delivery rate with track and trace

IKEA Distribution Services, the sole distributor for the homeware and furniture retailer in the UK, is benefiting from speedier and more accurate fulfilment that has raised levels of customer service with electronic track and trace systems.

The distribution operation installed a radio frequency (RF) based track and trace system to effectively manage its growing number of customer deliveries since the launch of its internet shopping service, through the process of goods receipt, put-away, picking and dispatch.

And, since recently adding electronic proof-of-delivery (ePOD) system integration beyond the warehouse, its bespoke development has provided increased visibility of IKEA's stock in real time, from the moment it leaves its Central Distribution Centre in Peterborough to when it arrives at the customer's house.

Don Marshall, deputy customer distribution manager for the South West Europe region at IKEA Distribution Services told IT PRO the improvements have been made possible by the integration of an advanced data capture system from warehouse IT specialist, Zetes with its RF warehouse system and IKEA's existing home delivery management system, Axida HDi.

"We've doubled the volume of deliveries we have made in the last five months and are looking to double that again within the next year," he said. "This wouldn't have been possible without the visibility and real-time automation the Axida and Zetes system has given us."

At the start of a shift, mobile computers retrieve route data from the HDi system, presenting the delivery driver with a list of visits and relevant information. As the driver delivers the relevant items, the customer's signature is captured and GPRS is used to relay updates to the main system. The ePOD system provides customers with a printed receipt of the goods received and transfers a copy to HDi.

In-truck printers also enable drivers to label damaged and returned goods with a warehouse barcode as they go into the truck. Once transferred to the main system, this allows stock to be processed more quickly and efficiently when it is returned to the warehouse. Currently, 60 delivery trucks are installed with the track and trace and ePOD technology but IKEA anticipates further roll out in line with their e-commerce expansion. IKEA is also considering the technology in other operational countries.

Marshall added that Zetes' ePOD has been customised to replace a paper-based, third-party system. "We used to have to rely on the figures given to us by the third-party home delivery fulfilment companies before implementing the Axida system. They said the rate of fulfilment was around 96 per cent, which is a good reflection of the industry average," he said.

"When we moved over to the Axida/Zetes and then the ePOD system, fulfilment rates fell to around 94 per cent because we had visibility. We've now got that back up to 96 per cent and are hoping to improve further. Our stock data has never been more accurate and we are making significant cost savings from ordering less replacement stock."

IKEA is also reporting higher levels of customer satisfaction as a result of being able to deal with non-delivered or damaged goods more quickly and efficiently. Marshall said IKEA's customer service team can now contact customers within minutes of receiving their delivery to deal with any missing or damaged items or to let them know of any delay.

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