Um café com... João Martins - Country Fulfilment Development & Multichannel Network Manager na IKEA Portugal

Empack and Logistics & Automation Porto:

Tell us about yourself and your journey at IKEA. What is the day-to-day life of a Country Fulfilment Development & Multichannel Network Manager like?

João Martins:

My journey at IKEA starts with a professional goal of wanting to work in a large global retail company, which would convey to me the confidence of a brand focused on people, customers and employees. I came from a very enriching experience at A Padaria Portuguesa where I was part of a very interesting expansion process, where I felt I could grow and grow an organisation very focused on the customer and employees. My basic training is in Tourism and Hotel Management and a postgraduate degree in Marketing and it was with these bases that I joined IKEA, at the time for the Food & Beverage area, where I was pleasantly surprised by the size of the business that most people do not know beyond the famous meatballs. IKEA gives us the possibility to try other areas and choose the career path we like best, even if it is outside our training area and that is what I did. I went through the opening of the Braga shop and then Loulé as Customer Relations manager, later I was responsible for finance and operations and finally Customer Fulfilment Mgr for that market where I spent 5 years. This experience was crucial to understand the importance of the Logistics area in retail and its potential. In my current role, my day to day is to manage the large projects in Fulfilment, look for areas where to act and add value to create a network that meets the needs of the business from a capacity point of view and the efficiency of the network according to our growth plans. It is with the general perspective of growth and the internal and external potential that we define our omnichannel strategy.

 

Empack and Logistics & Automation Porto:

Can you give us one or more examples of initiatives you have put in place to improve the customer experience in the last year?

João Martins:

There are several movements related to the shopping experience area where IKEA has been making good developments, either using process digitalisation or simply continuous improvement.

In Fulfilment, one of the most important movements and part of our strategy is to eliminate the dependence on our Fulfilment Centre located in Valls, Barcelona, which is why we currently have a large project underway in Loures.

But to anticipate this process, last year we started a project so that our Loures shop would be part of the Parcel operation (small orders), thus dividing the volumes between Spain and Portugal. With this we have achieved a considerable reduction in costs, CO2 emissions and improved delivery times for our customers due to proximity. We hope to move the remaining volume to Portugal this year.

In our Alfragide shop, we had an initiative that revolutionised the way we have been selling for many years. IKEA has always based its strategy on a Cash & Carry format where we do our part and the customer does his, so that in the end we can present products at prices that suit most people. In Alfragide, and due to the growth of services associated with sales, we made a considerable change in our Self-Service, in which we reduced a large percentage of its size, making part of what was previously available to the customer, only available to our employees. This brings clear advantages for the customer in terms of convenience, it also brings challenges due to the volume that we start to move, but in an omnichannel environment it is essential to be able to maintain effective stock control and gain efficiency in handling and picking operations.

 

Empack and Logistics & Automation Porto:

In your opinion, what are the most relevant current challenges in the Logistics sector in Portugal?

João Martins:

One of IKEA’s great competitive advantages is the fact that we own the entire process, from product design to delivery to shops and then to the customer. However, we are still subject to all the challenges of the rest of the logistics industry, which has been gaining expression lately, whether because of the cost of transport, its instability, etc.

From the point of view of people, we live the challenges that the rest of the market presents, which is why we have made such sharp investment movements in improving working conditions, whether through investment in tools and equipment, but also in salary conditions, the recent increase from € 750 to € 1000 gross monthly entry salary was one of the most important movements. The potential we are looking for in our people today is different from what was sought 10 years ago. There is a clear reduction in the need for the use of force and this is a positive evolution that will bring better results for everyone, but it forces companies to be at the forefront of development and to invest a lot, in a recent universe and where the risks of becoming quickly outdated are enormous, considering the return on investment and the time it takes to adapt our reality to more innovative environments. These are processes of digitalisation, automation, but also change management.

From an operational point of view in Logistics, a major challenge has been the dynamics of the customer buying process, with online and remote channels creating opportunities and challenges. For more than 75 years, our shops have had their warehouses open to customers so that they can collect their goods, and today stock management in this environment becomes very dynamic and challenging. The customer who is shopping on their smartphone or computer deserves our attention as much as the one who is in shop so when we say we have stock we have to ensure that there is not going to be a conflict between the channels. When you work in an environment where these two channels are competing with open doors, the operational dynamics are very demanding, which forces our teams to improve processes on a daily basis to ensure the best customer experience.

This is why INGKA Group has a giant commitment on its agenda to invest in upgrading existing shops by adding automation, to achieve a true omnichannel experience for our customers.

 

Empack and Logistics & Automation Porto:

How could more companies in the logistics and empack sector have initiatives or develop their business in a more sustainable and environmentally friendly way?

João Martins:

In the last mile area, there is still a long way to go regarding deliveries with Electric vehicles. IKEA has positioned itself with ambition on this topic globally, and Portugal is no exception, which is why we want to ensure 100% of our deliveries with electric vehicles by 2025.

In this sector, we also have a great opportunity with regard to the existing Pick Up Points networks. We are very focused on small items and there is an untapped market for medium and large items, through lockers, for example, as is beginning to be done in some countries in central Europe. These are solutions that allow customers to better manage their time, lower cost of service and reduce kilometres on the road in distribution which translates into less polluting emissions. IKEA has started to do this through a solution we call Mobile Collection Points, which is proving to be a winning bet, but there is more to do and together with other players in the market since the needs are the same and the customers are common.

Regarding the Empack sector, I would say that the opportunities are huge. With the growing association of services with the products that companies sell, the use of packaging becomes essential, at the same time the production of waste through the entry of goods is also growing and there are still few solutions on how to make these cycles a closed circuit. As an example, all the cardboard we produce from incoming goods in an IKEA shop would be enough to produce the boxes we use to ship products, but it is difficult to find someone to guarantee this continuous flow, and we have to rely on various partners. We use these resources for other purposes such as filling the boxes, but there is potential, for example, to ensure the reuse of transport packaging.

Empack and Logistics & Automation Porto:

Are you particularly excited about any recent projects or initiatives developed by IKEA? What new developments can we expect?

João Martins:

At the moment the biggest project we have is the extension of our Loures shop, with the addition of more than 9,000 m2, in which we will have for the first time fully automated merchandise management systems, using AGV’s, one focused on medium and large goods (pallet) and another only directed to small items (Marketplace). The first focusing on the efficiency of the Inbound process and the second on the efficiency of Inbound and Outbound.

This project will allow us to triple our Fulfilment capacity and will bring giant efficiency gains with ergonomic improvements of excellence for our teams. At the same time, it will add the capabilities we need to deliver the much-desired excellent omnichannel experience to our customers. This project channels the largest slice of the €50M cake that IKEA Portugal has dedicated to Logistics projects since last year.