Transparency in the Supply Chain: The IWAY System

In a globalized world, it is no longer sufficient for companies to focus solely on product quality. Consumers are increasingly questioning how and under what conditions the products they purchase are manufactured. This shift has brought transparency in the supply chain, ethical production, and sustainability to the forefront. One of the notable applications of this transformation is the IWAY System developed by IKEA to manage its supply chain.

What is the IWAY System?

IWAY (The IKEA Way on Purchasing Products, Materials and Services) is a set of behavioral standards introduced by IKEA in 2000. This system requires IKEA’s suppliers to ensure that their production processes respect human rights, are environmentally responsible, and follow ethical principles.

The core principles of IWAY include the following:

• The prohibition of forced labor,
• Prevention of child labor,
• Provision of a safe and healthy work environment for employees,
• Adoption of environmentally friendly production methods.

IKEA monitors its suppliers not only at the first level but also at the second and third-tier subcontractors, ensuring holistic transparency in the supply chain.

“We believe that we have a responsibility beyond just making furniture. We want to have a positive impact on people and the planet.” —IKEA Sustainability Report, 2023

Audit Process and Accountability

IWAY is not merely a statement of principles; it is an effective application supported by regular on-site audits, post-audit action plans, and continuous monitoring mechanisms.

IKEA conducts annual audits of its suppliers through both its own auditors and independent auditing organizations. If non-compliance is detected, suppliers are given a specific timeframe to make corrective actions. If compliance cannot be achieved, business relationships are terminated.

“IWAY non-compliance may lead to the termination of a supplier relationship, even if it affects production timelines or cost.” — IKEA IWAY Standard Version 6.0, 2022

Sustainability Approach

IWAY is also a part of IKEA’s sustainability strategy. Through this system, the company guides its suppliers in areas such as water and energy efficiency, reduction of chemical use, waste management, and carbon emissions.

This process is not merely a compliance-driven audit; it is a collaborative approach that includes training, capacity building, and support for transitioning to sustainable business models.

“IWAY helps us to secure long-term business partnerships with suppliers who share our values and ambitions for a better everyday life.” — Jesper Brodin, CEO, Ingka Group (IKEA), 2023

Consumer Trust and Brand Reputation

Today’s consumers are increasingly drawn to brands that uphold ethical values. There is a growing consciousness to see production practices that respect human rights, the environment, and occupational safety behind the products they purchase. IWAY is a strategic system that responds to this demand.

IKEA publishes transparent sustainability reports each year, sharing IWAY implementation rates and audit results, which strengthens consumer trust.

“Transparency builds trust. Through IWAY, we ensure that every step in our supply chain respects both people and the planet.” — IKEA Global Supply Manager Report, 2022

Conclusion

The IWAY System serves as an example not only for IKEA but for all global brands. Ensuring transparency in the supply chain is important not only in terms of corporate social responsibility but also for risk management, legal compliance, and brand reputation.

In the future, more companies are likely to implement similar transparency systems, further strengthening both sustainable production and social responsibility awareness. IWAY stands as one of the key milestones in this transformation.

References:

• IKEA. (2023). IKEA Sustainability Report. Retrieved from https://about.ikea.com
• IKEA. (2022). IWAY Standard Version 6.0. Inter IKEA Systems B.V.
• Brodin, J. (2023). “Responsible Sourcing and IWAY”, Ingka Group CEO Interview, IKEA Global Newsroom.
• Global Supply Chain Institute. (2022). Transparency in Global Supply Chains: A Best Practice Guide.

Tolga AKAGÜN