Interview: IKEA's design manager Marcus Engman explains how a team of just 20 designers oversees the creation of 2,000 affordable products each year at the world's largest furniture company, in the second part of this exclusive interview.

IKEA's product development process is managed by Engman's small team of in-house designers at the company's 4,000-square-metre headquarters in Älmhult, Sweden – the town where the brand's first store opened in 1958.

"We go and work together with designers from all over the world, but also when we do design we do it on the factory floor," said Engman. "We work in a very different way to how everyone else is working."

Engman spoke to Dezeen in Stockholm earlier this week, ahead of the launch of London designer Ilse Crawford's collection for IKEA.

In the first part of the interview Engman, who rejoined the brand three years ago as design manager, revealed how the Swedish flat-pack giant is using design to overhaul its reputation for "doing cheap stuff".

In the second part of the conversation, published below, he explained how his designers travel to customers' homes around the world and assess their different requirements when developing new products.

"We always – and this is not a cliché – start the product development in people's homes," said Engman. "I always try to go on home visits to real people, to find out what are the real needs."

However the design team is also tasked with keeping prices affordable, spending a lot of time considering how each product will pack and ship efficiently.

"One of the biggest costs when it comes to producing or doing product development is logistics," said Engman. "And if we could see to that on one pallet we could get a third more, just by changing the size or something by two centimetres, then of course we try to do that to be smarter."

"One centimetre there could maybe mean 10 euros in the end on each and every product," he added.

All of the production and packaging is also done in-house, so any section of the process can be altered at any time to make it more cost effective. "That is the trick to the great prices of IKEA," said Engman.

IKEA operates 351 stores in 46 countries and last year generated annual sales of €28.7 billion (£21.5 billion). Its stores stock around 10,000 different products, with 2,000 new ones added each year.

Read the second part of our interview with Marcus Engman below:

Dan Howarth: How did you get involved with IKEA?

Marcus Engman: I was more of less brought up within IKEA. I started out at IKEA when I was 15 years old, working weekends and stuff. And then I worked as an interior decorator, then as a communications and marketing manager in stores, and I've been a marketing manager for IKEA in the past. I've been a range strategist also for IKEA. So I work in the creative field, but left IKEA and was away for 12 years. And then I came back and I've been head of design now for three years. It might be fun to know that actually my father held this position once, also. So it's an Ikea family!

Dan Howarth: And what does your role as head of design involve?

Marcus Engman: It means that I'm responsible for the identity of IKEA – and all of the product design that we do within IKEA. And, of course, I have all of my employees, which is the employed designers and also all the ones that we choose to have on contract. So we have a small, agile team of 20 designers in-house. We also have six scholarships going on every year. And on top of that we have maybe a hundred designers working on contract.

Dan Howarth: How does the design process work within the company?

Marcus Engman: We set it up in small product development teams and the product development team contains a communicator, a product developer, a technician or engineer, also. And then we assign different designers to all of those teams, also, depending on what we want to do. We work in a very different way to how everyone else is working. It's all transparent. We have a space where you can see all of the projects. You know we do 2,000 new things every year, so it's quite a lot. And then, of course, on top of that we maintain the range, which is like 10,000 articles, and we try to improve that every year to make it better.

So there's a lot of projects going on, but the good thing is that since we've started now and it's changed a little bit. We try to be much more transparent so everybody sees what everybody else is doing – because I do believe that that is a good idea, because then you get inspired from each other. So we have a huge space for product development. It's like 4,000 square metres, where all of the products are, physically. So it starts out from the first initial meeting, then you put up the drawings – the ideas – on a physical space, and then it turns into prototypes. We have our own prototype shop there, with craftsmen for every kind of skill, and 3D printing and everything too. So it's more like a small factory within this project area.

Another thing that we do which differs us a little is that we always start – and this is not a cliché – the product development in people's homes. So even when I travel all over the world holding speeches and stuff, I always try to go on home visits to real people, to find out what are the real needs. And that's where we find our source of both inspiration and for new business. How could we solve everyday life in a little bit of a smarter way? And that is so fun also to have all of those discussions with real people.

Dan Howarth: IKEA is a phenomenon. Why do you think it has been so successful?

Marcus Engman: Due to a lot of reasons, but I think part of it is that it actually helps a lot of people to get a beautiful home. It's the easy way to get to that. And then I think it's something about our style, also. This is one of the things that I have been thinking about myself since I worked with range strategy before.

There is something about Scandinavian style. More or less the background for that was out of scarcity of materials, scarcity of ways of producing from the past that made it very simple and very straightforward. That became very simplistic and also very blend-able with a lot of different things. You could put those pieces in an Indian home at it would look good. It's easy to mix with our pieces of furniture. So if you don't buy it all, you could always mix it with what you have.

Dan Howarth: You mentioned that you have marketing background and that you're working on the marketing strategy for IKEA. How are you getting the right message about the company out to people?

Marcus Engman: This is one of the things that made me come back to IKEA, because I could see us being so much better at this than we have been. IKEA has a really great story and if you come to see how we work and everything, most people want to tell that story and love what we do. But you don't see that out there. You only see products, mostly.

Part of working with design is to put our process out there. Because if we just tell people how we do things and how we work really, really hard then I think more people would love us. It's as simple as that. It's all about honesty, actually – it's not about making some smart kind of marketing strategy. The marketing strategy should be all about honesty and all about transparency and spreading this. And that's what you're going to see too. We're going to open up what we do, much, much more, and that's what's going to happen this year.

Dan Howarth: So do you think that it was too closed off before?

Marcus Engman: We've never been closed off or tried to pretend things. It's more or less that we forgot to talk about it. It wasn't part of the product development process, really. And you know what, if you're into marketing you have seen the change in the media landscape and all of that has become much more... on one hand you could say that it is complex, but on the other it is so much easier, also. So I think for a big company to navigate in the right way... It has been a little bit hard.

Dan Howarth: You're based in Sweden and you still do your design here. Do you think the IKEA's products still retain that Scandinavian aesthetic?

Marcus Engman: Absolutely. But then you always have to explore: what is Scandinavian today? Because it's not always leaning back and looking at things as black and white. It's going to be something different. And if you look upon Scandinavia, where is Sweden as a country, also? I think that one eighth of the country's population is coming from another part of the world. So how does that reflect into the design? I think those questions are really important to take in and to also let that affect our designs.

Dan Howarth: How do you do that exactly?

Marcus Engman: We have done some explorations actually where we go and work together with designers from all over the world, but also when we do design we do it on the factory floor, most often. We travel to those places, we get to know those places and we get to know the facilities and what's possible to do there. Then you blend that with your own background – which for most of the employed designers is the Scandinavian background – and then something new comes up.

Dan Howarth: Is it challenging to design products that need to work in every single home?

Marcus Engman: I don't think so because it's more or less to cater for the size and the functions that are needed all over the world. We want people to be individuals. We don't want them to wake up in a complete IKEA home, you know, so how they pick and choose out of us is, of course, different in parts of the world style-wise. But function-wise I would say never forget that the majority of people live in small spaces, especially our customers. So it doesn't make sense for us to do really big sofas only. We have to have it all from a size perspective.

Then of course there is – this is more going into details – there are differences in perception of things in different parts of the world. The perception of comfort is different. Some countries, they like to sit on top of a sofa; some countries like to sit inside of the sofa – but they want it to look the same. Those things, of course, we try to cater for also.

Dan Howarth: Ilse Crawford told me that some of the shapes of products in her collection had to be altered because of the way they needed to be packed and shipped. Is that a key part of the way the design process works?

Marcus Engman: We look into so many parts when you do the design of a product. That's the fabulous part. One of the biggest costs when it comes to producing or doing product development is logistics. And if we could see to that on one pallet we could get a third more, just by changing the size or something by two centimetres, then of course we try to do that to be smarter.

Then we do the packaging. This is the good part – keeping it all inside of the family. We could change it all. Since we do the design, we do the production, we do it all within IKEA. Then we could also alter all of those things to become really, really efficient. And that is the trick to the great prices of IKEA, too. It's working through all of those details. So one centimetre there could maybe mean 10 euros in the end on each and every product. Then you have to look into it to get it with the designers. It's not like doing a thing less good; it's more or less taking the right decisions along the line. If you know that if you do it in this way we're going to reach out to maybe twice the amount of people – due to the price level – it might be smart to alter that design.

Dan Howarth: These decisions happen on a daily basis?

Marcus Engman: It's on a daily basis and that's why it's so crucial to have this collaboration in these teams. So it's not just the designer doing the design and going through it all without any kind of discussion. It's the constant discussion all of the time. I think there has been great learnings also for the Studioilse team to see what is important when it comes to product development and to get things through in a good way.

Last week, we took all of the designers we have on contract all over the world and made them come to Älmhult so we had the biggest design meeting in Europe. It was like 100 designers together with 100 product developers, where we went through everything that we are doing today and what we're aiming to do for the future, so everybody is on the same page. And just getting all of those creatives to meet was a really good thing – to get to know each other. It was almost kind of a speed dating.

I could also see that the way I'm being approached by different designers from all over the world, that people see and hear that we are in for a really good change within IKEA right now. We're going to a good place. From a good place to an even better place, I would say.