![\"Retail](\"https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90.png\")
<\/a><\/p>\n<\/p>\n
Last year, 650 million<\/strong> people across 30<\/strong> countries visited an Ikea<\/strong> store, and the company\u2019s website attracted more than 4 billion<\/strong> visitors. Those are staggering numbers that would make any retailer crow, but when an organization of that size decides it needs to streamline processes, those numbers suddenly become daunting. That is, however, exactly what Ikea decided needed to happen, and to do it the company turned to\u2026more numbers.<\/p>\n Four<\/strong> years ago, Ikea teamed up with Celonis and began an undertaking referred to as \u201cprocess mining.\u201d The initial goal was relatively modest: to align the company\u2019s finance systems and processes more accurately with what was happening in sales channels. However, the ultimate result has been a whole new way of thinking about omnichannel execution and communication across the organization<\/strong>.<\/p>\n \u201cWhat process mining really offers you is an industrialization of doing a time-and-motion study,\u201d explained Tim Hills, Process and Data Insights Development Manager at Ingka Services, a division of Ikea owner Ingka Group. \u201cRather than the more traditional standing there with a stopwatch and clipboard and timing how long it takes people to do things, we pull all of that information out of our systems. Almost everything that we do leaves a digital trace throughout our solution landscape, and that\u2019s what we\u2019re bringing in and representing. The data tells you what, the people tell you why and data-enriched people tell you how to become better<\/strong>,\u201d he said in an interview with Retail TouchPoints<\/em>.<\/p>\n The results across the organization have been far-reaching \u2014 everything from removing organizational silos to improving distinct moments in the customer journey. And so, while the project started with one particular use case, it is now becoming a way of life at Ikea<\/strong>.<\/p>\n \u201cOur founder Ingvar Kamprad [which, by the way, is where the name Ingka comes from, a combination of the beginnings of his name and surname] released a book in 1976 called The Testament of a Furniture Dealer<\/em>, and when you start looking into some of the things in there, all of these concepts around continuous improvements are baked into who and what we are as a business<\/strong>,\u201d said Hills. \u201cSo really this is a case of modernizing our core DNA. That isn\u2019t a project that you run and then it closes; it\u2019s a project that you get going, and it then becomes part of the everyday.\u201d<\/p>\n Here\u2019s how it works:<\/p>\n 1. Get the data<\/strong>: The first step is to gather all the available data from sources across the organization and \u201cprovision\u201d it, that is, make it centrally accessible to various systems and users at the company. Ikea was aided in this effort by the fact that it had already been going through a years-long digital transformation that included extensive data cleaning and collation.<\/p>\n 2. Understand the data (and maybe get more of it)<\/strong>: Individual experts then come together to analyze the data and determine what it\u2019s saying. Ikea initially focused on three<\/strong> core systems: selling, fulfillment<\/strong> and after-sales<\/strong>. \u201cWe started there with that red thread, and then by being able to connect those together and looking at a couple of use cases and a couple of things that popped out to us, [we would see that] maybe there\u2019s some additional transparency we need in a couple of other areas,\u201d said Hills. \u201cSo we would then bring in some more information to enrich what we were seeing and [come to some conclusions].\u201d<\/p>\n 3. Put the data to work<\/strong>: Hills and his team then draw on investigative and process improvement methodologies such as Lean Six Sigma to draw a line from a pain point to the root cause and then move toward solutions.<\/strong> They then develop a delivery plan for the solution and roll it out for adoption. \u201cIt\u2019s great to have all sorts of analyses and pretty dashboards and so on, but unless it makes a difference to a customer and a co-worker, it hasn\u2019t actually changed anything,\u201d said Hills. \u201cThere\u2019s been a real journey of delivering that methodology, putting that in place with global folks here in [headquarters] and out in the country units, because that\u2019s where things really need to change to actually make a difference.\u201d<\/p>\n The first use case that Ikea tackled began with a dissection of the \u201corder-to-cash\u201d process<\/strong>, but even that term represents a shift in how the company operates. \u201cOrder-to-cash\u201d essentially describes the lifecycle of a consumer purchase, from the moment they select a product to when they pay. That phrasing is drawn from the American Process and Quality Council\u2019s Process Classification Framework, which has defined a whole set of these terms that describe business processes end to end. Other examples include \u201csource-to-pay\u201d and \u201chire-to-retire.\u201d<\/p>\n \u201cOne of the things that we really needed and were able to facilitate through our work with Celonis is to have a common language with which to interact with each other to actually have this conversation,\u201d explained Hills. \u201cOften, if you were to get a salesperson, a marketing person, a logistics person, a finance person and an IT person in the same room, it would be like a meeting at the United Nations when all the translators have gone for a coffee break.<\/strong> Everyone\u2019s saying the right things in their own languages, but no one\u2019s really connecting. This gives us that that unbiased, unfiltered language with which to talk with each other,\u201d<\/p>\n The primary aim of the initial process mining effort was to define every single step of the order-to-cash process from a financial perspective, in order to ensure compliance across reporting, ESG, taxation and more. But because at Ikea the finance division also includes business \u201csteering and navigation\u201d functions, future improvements also naturally surface throughout this process<\/p>\n One such example was recurring instances in certain locations of click-and-collect cancellations<\/strong>. In looking through the data, Hills and his team realized there was a notable difference in cancellation rates between locations that offered specific appointment windows for pickup versus any time on a specific day.<\/p>\n Changing the process in either direction would have huge implications for employees, who would have to pick orders either throughout the day (in time for those appointment windows) or all at once in the morning, and those staffing concerns had to then be weighed against potential upsides like reductions in returns and cancellations.<\/p>\n But in looking more deeply at the data and speaking to the folks on the ground, the team realized that the root problem wasn\u2019t really the timeframes being offered for pickup but rather how those options were being communicated to customers. \u201cHaving that full end-to-end perspective, and that way to communicate and interact with each other, to come to these conclusions was absolutely differentiating,\u201d said Hills.<\/p>\n As the team\u2019s approach to process mining matures, new areas for improvement are being surfaced, and in multiple ways. Sometimes suggestions come from the workforce<\/strong>, both corporate and store-based. The team also is using AI and machine learning statistical analysis tools<\/strong> with Celonis to discover specific pain points that are hindering optimization.<\/p>\n \u201cEvery single day, every single graph we look at surprises us in some way, shape or form,\u201d<\/strong> said Hills. \u201cIn some cases [it\u2019s something you] thought that might be true and now there\u2019s proof. In other cases, you notice there is a lot of variety in outcomes from country to country or from store to store within a country. The transparency that offers us is to then bring together people with ridiculous amounts of experience, who can say, \u2018I know why that\u2019s happening,\u2019 and then for other people around them to then say, \u2018Oh, if that\u2019s happening for you, that\u2019s why this is happening for me, which is also why that\u2019s happening.\u2019 Click, click, click, click, click, and all of a sudden, the outcome and that growth in communal knowledge just explodes<\/strong>.<\/p>\n \u201cAnd then as we look to improve and change things, we can also track the impact on customer experience, customer expectation and customer perception, which has been really valuable for us,\u201d he added. \u201cIt\u2019s not where you start, it\u2019s where you finish.<\/strong> Anyone can raise a flag to say, \u2018There\u2019s an issue.\u2019 That\u2019s one thing. But then if everybody rallies around it, makes it a focus to improve and ultimately you reach that improvement, that\u2019s the thing that, for me, is most interesting.\u201d<\/p>\n This use of data as the starting point for these conversations has helped Ikea become more evidence-based in its approach to process improvements, so that \u201cwe make sure the anecdote is really relevant to reality,\u201d said Hills. Another benefit is that it makes improvements easier to measure.<\/p>\n In the case of click-and-collect, as improvements were rolled out, baselines were set and specific metrics like cancellation rates and co-worker hours were meticulously tracked to ensure that the changes were having the desired effect. \u201cFor each one of the use cases we have a dashboard that tracks it over time, and then we bring [all of those] into a consolidated value realization tracker<\/strong> [to measure the overall benefit of the process mining initiative],\u201d explained Hills.<\/p>\n Ultimately, though, it\u2019s a process that will never be complete: \u201cIt\u2019s a little bit like Simon Sinek and starting with \u2018why\u2019 in The Infinite Game<\/em>,\u201d said Hills. \u201cRetail is never done; you can\u2019t complete retail.<\/strong> Our customer expectations will continually change. Our business model will continually change \u2014 the way in which we realize our offer, the products that we sell, the services that we sell. At the moment, this is all much more accelerated whilst we\u2019re getting up to speed. But I think soon there will be a transition to this being business as usual and continuous improvement just being part of the day to<\/strong> <\/strong>day.\u201d\u00a0<\/strong><\/p>\n<\/p><\/div>\n![\"Tim](\"https:\/\/www.retailtouchpoints.com\/wp-content\/uploads\/2025\/06\/1729848617554.jpg\")
How Ikea is \u2018Modernizing Our Core DNA\u2019<\/strong><\/h2>\n
The Process Mining Journey<\/strong><\/h2>\n
How it Started and Where it Goes from Here<\/strong><\/h2>\n
Ikea\u2019s Infinite Game<\/strong><\/h2>\n