An Exploratory Study of Sourcing Options for Alternative Materials to Leather - A Case Study at IKEA of Sweden

Abstract

Abstract
Title: An exploratory study of sourcing options for alternative materials to leather.
Authors: Akashdeep Maheshwari and David Marriaga Diaz – Master Students in Logistics &
Supply Chain Management. Division of Engineering Logistics. Lunds Tekniska
Högskola (LTH), Lund University.

Thesis
supervisors:

Caroline McGarvey – Sustainability Manager / Material and Innovation Deployment
Leader. Category Area Comfort. IKEA Range & Supply.
Leo Chen – Product Engineer. Leather Competence Centre, Inter IKEA.
Ebba Ericsson - PhD Candidate. Faculty of Engineering Logistics. LTH, Lund University.

Thesis
Purpose:

The purpose of this thesis is to Identify and analyse potential new materials for the
inclusion to IKEA’s portfolio in the “leather” catalogue.

Method: The thesis began with an investigation of leather and coated fabrics supply chains,
to identify the different risks pertaining to both materials. The study then performed
an LCA on both materials to establish sustainability benchmarks. Next, a thorough
investigation on existing leather alternative materials available in the market was
carried out. The materials were subjected to a vendor selection process regarding
IKEA’s democratic design for product development. The result of the vendor
selection was a short-list of potential suppliers with which IKEA could collaborate in
the future. The study then does an analysis comparing two technologies which
recycle leather and could potentially be used within IKEA’s value chain. The study has
a recommendation of short, medium, and long-term goals that could benefit IKEA
concerning the future of alternate materials.

Conclusion: The study identifies the cradle to gate carbon emissions for leather and PU coated
fabrics as a valuable indicator into the company’s operations. The study also classifies
different leather alternative materials currently available in the market and
evaluates their performance on attributes based on IKEA’s democratic design, with
a special consideration on sustainability and price. The study determines there is no
fully comparable material to leather based on IKEA’s leather standards. However,
the study concludes that some leather-like attributes of the materials evaluated
might be of interest to motivate more circular products in the future.

Keywords: Sustainability, Corporate Sustainability, Leather, Coated fabrics, Leather alternatives,
Circular supply chain, Sustainable supply chain management, Purchasing strategic
management, Supplier selection, LCA.

Popular Abstract

Title: An Exploratory Study of Sourcing Options for Alternative Materials to Leather
Akashdeep Maheshwari and David Marriaga Diaz
Department of Industrial Engineering and Management, Lund University in collaboration with
IKEA of Sweden
Sustainability has become an ever-pressing issue which is at the helm of everything we do,
both in our professional and personal lives. It has gained momentum across all consumers
and customers which is also forcing companies to engrain sustainability within their products
and services. This wave of change has also hit IKEA, which is one of the world’s largest
retailers. IKEA has taken the challenge of making their products more sustainable by the horns
and is leading the way for other companies as well.
Leather is a traditional and trusted material which has been in use for generations and is at
the crux of IKEA’s furniture offerings. Due to environmental and social sustainability, and
animal welfare concerns, IKEA is looking to complement and maybe even substitute leather
in the future with alternative materials. This thesis thus aims to Identify and analyse potential
new materials for the inclusion to IKEA’s portfolio in the “leather” catalogue. The purpose of
this master thesis report is to understand the current leather supply chain, identify and
analyse potential new alternative materials to leather and how can they be included in IKEA’s
leather catalogue and identify their sourcing options.
The thesis begins with an analysis of the different issues with leather and PU coated fabrics
supply chains, highlighting the different risks associated with them. Two life cycle assessment
(LCA) studies are carried out to measure the CO2 equivalent from the production processes of
these materials which can be later used by IKEA to identify hotspots for emissions. The
authors next identify the different alternative materials available in the market at the

moment, which are then categorized and analysed based on the properties of leather. A two-
step framework is created for the evaluation. The first step involves a categorical supplier

selection wherein the different suppliers are rated based on their performances on the five
pillars of IKEA’s Democratic Design (sustainability, quality, form, function and price). The top
two suppliers from each category are selected for the next step which involves a comparative
analysis of the suppliers through an AHP. The AHP gives the highest preference to their
performance on sustainability and price. Lastly, in order to help IKEA move closer to their
goals for circularity, a SWOT analysis is carried out for the two suppliers which are working
with technologies to recycle post-industrial leather waste.
Based on the findings, the authors suggest recommendations for the short, medium and long
term. These can be used by IKEA along with the framework to select a supplier which would
meet their needs. The findings of this research can be used by other companies working with
leather who are looking to learn more about leather and use alternative materials for their
products.

• author: Maheshwari, Akashdeep and Marriaga Diaz, David
• supervisor: Ebba Eriksson
• organization: Engineering Logistics
• course: MTTM02 20211
• year: 2021
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Sustainability, Corporate Sustainability, Leather, Coated fabrics, Leather alternatives, Circular supply chain, Sustainable supply chain management, Purchasing strategic management, Supplier selection, LCA.
• report number: 5943
• language: English
• id: 9050562
• date added to LUP: 2021-06-08 13:34:48
• date last changed: 2021-06-08 13:34:48