IKEA's Supply Chain Management

This assignment delves into the intricacies of IKEA's supply chain management. It examines various aspects of their operations, including planning and control activities, to assess their overall performance. The analysis highlights key challenges faced by IKEA in managing their vast global supply network. Furthermore, it proposes the implementation of operation management tools as a solution for enhancing efficiency and achieving performance objectives.

Logistic and Operation
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Evaluation of the plannign and control activities of IKEA.........................................................1
Long term planning and control..................................................................................................1
Medium term planning and control.............................................................................................2
Short term planning and control..................................................................................................3
2. Organization’s planning and control activities stages.................................................................4
Sequencing...................................................................................................................................4
Loading........................................................................................................................................4
Scheduling...................................................................................................................................5
Monitoring and control................................................................................................................5
3. Discussion of plannign and control activities and Recommedation............................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

INTRODUCTION
Logistic and operation management is one of the important field for an organization for
the purpose of product development, quality management, and logistic information system and
personnel management. There are number of tools and techniques which can be used by
operation manager of an organization for attaining performance objectives of the company
(Dekker, Bloemhof and Mallidis, 2012). The current research project is based on logistic and
operation management of an international organization of UK. Regarding this, research has been
chosen IKEA which is a multinational group of companies that design and sell ready and
assembled furniture in all over the world. This organization also focuses on logistic and
operation management at the time of manufacturing different products and services and
managing quality as well (Fitzsimmons and Fitzsimmons, 2013). The current report will focus on
planning and control activities of the organization which play important role in attaining
performance objectives. Study will recommend appropriate strategies for aligning planning and
control activities with performance objectives.
1. EVALUATION OF THE PLANNIGN AND CONTROL ACTIVITIES OF
IKEA
IKEA wants to improve its performance by developing effective plan and control.
Regarding this organization need to focus on different types of planning and control activities
such as long term, medium term and short term (Bozarth and Handfield, 2016). Evaluation of the
planning and control activities of IKEA for attaining all performance objectives is described as
under:
Long term planning and control
Long term planning and control activities are based on mission, vision and long term
objectives on IKEA. These objectives are described as follows:
 To increase the profitability of the organization by 30% in coming three years.
 To be a market leader of furniture industry and attain competitive advantages in effective
manner (Schönsleben, 2016).
 To maintain sustainability in different activities of operation and logistics management.
For attaining these objectives in effective manner IKEA focuses on appropriate activities
of planning and control. To increase the profitability by 30% organization needs to develop plans
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for reducing extra cost and wastages of raw material. Along with this IKEA needs to control the
progress of production process in effective manner (Fernie and Sparks, 2014). For reducing the
extra cost company is using activity based costing which helps in allocating all resources in
optimum manner which plays important role in reducing operating cost of the organization. It is
a long term planning process so, IKEA focuses on monitoring and controlling of each and every
activity of the plan. Reduction of extra cost increase the net income which leads high
profitability. To be a market leader organization has developed a plan to introduce new furniture
product in the market. Regarding this, IKEA focuses on the new product development process
and differentiation strategy. These strategies will play important role in making different product
from existing competitors and it will also help in attaining competitive advantages and market
shares. Regarding this, IKEA will focus on controlling each and every stage of the new product
development process (Objectives of Performance Management, 2016). Another performance
objective focuses on sustainable development of IKEA and regarding this, organization will
focus on economic, environment and social development of the organization. Therefore, all these
activities will help in attaining sustainable development of the organization.
Medium term planning and control
For attaining long term goals and objectives IKEA needs to focus on medium term
planning and control activities also. Medium term objectives can be attained in coming one year
(Dyckhoff, Lackes and Reese, 2013). These objectives focuses on the annual objectives of
IKEA. Medium term performance objectives of this organization are described as under:
 To increase the sales revenue of the company in coming one year.
 To enable employees to achieve superior standards of work performance.
 To help employees in identifying knowledge and skills required and make necessary
arrangement of training and development programme for increasing their knowledge and
skills in effective manner.
Increasing the sales revenue of organization is one of the major objective of IKEA and
for attaining this objective planning and control activities of this organization focuses on
promotion of the new products of the organization. Regarding this, company will use digital
marketing activities which will help in increasing the awareness of customers about the products
and services of IKEA which will augment the number of customers of the organization (Rushton,
Croucher and Baker, 2014). Therefore, it will increase the overall sales revenue of the
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organization. Another performance objective of IKEA is to enable employees to achieve superior
standards of work performance and regarding this organization provides appropriate working
environment and technologies which help employees of IKEA in improving their performance
with superior standards of work performance. Including this, making necessary arrangement of
training and development is also important activities for managing planning and control (Coyle,
Langley, Novack and Gibson, 2016). So, IKEA makes necessary arrangement of training and
development programme as per the needs and requirements of employees. It helps in augmenting
the skills and knowledge of personnel which plays important role in attaining medium objective
of the organization. Therefore, planning and control activities of IKEA are based on medium
term objectives of the company.
Short term planning and control
These activities focuses on the day to day operations and short term objectives of IKEA
which are described as under:
 To improve the performance of the employees.
 To complete daily activities as per the operation and production planning.
 To make effective communication between employees and team members.
 To motivate employees for giving their best performance.
Planning and control activities of organization focuses on increasing the performance of
employees. Regarding this IKEA makes appropriate arrangements of supervising and guiding
each and every team members in effective manner which helps in completing every activities in
appropriate way. Along with this, for managing day to day performance organization will focus
on appropriate communication management (Stadtler, 2015). Regarding this, IKEA uses
appropriate technologies such as telephones, email, mobiles, video conferencing and internet,
etc. these technologies help in making effective coordination between team members. Therefore,
all these planning and control activities will help in attaining short term performance objectives
of IKEA.
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2. ORGANIZATION’S PLANNING AND CONTROL ACTIVITIES
STAGES
Planning and control activities of IKEA focuses on long term, medium and short term
objectives of company. These are the following stages of planning and control:
Sequencing
For attaining performance objectives IKEA focuses on different planning and control
activities. But deciding these activities is not only necessary because organization needs to
decide priority of these activities also which is called sequencing process (Christopher, Magrill
and Wills, 2013). This stage is based on some specific principles. These principles include
customer priority, Physical constraints, Due date (DD), Last-in first-out (LIFO), First-in first-out
(FIFO), Longest operation time (LOT) and Shortest operation time first (SOT ). IKEA can
decide sequence of activities as per the needs and requirements of customers. So, customer’s
priority can also be considered as important method for sequencing planning and control
activities. On the other hand, there are some physical constraints for the furniture products such
as organization needs to do lighter paints on furniture before doing the darker shades. So, this
also decides the sequence of activities. Along with this, LIFO is an important model which
focuses on the last in first out concept which can also be one of the important tool for deciding
sequence. Similarly, organization can complete each activity in the sequence of first in last out
(Toth and Vigo, 2014). Sometimes, organizations needs to complete that activities in first which
require longest operation time else these activities can affect the total time of the project. On the
other hand, sometimes company can finished all the short term tasks which will reduce the extra
burden on employees and help in completing project in effective manner. Therefore, all these
tools can be used by IKEA for sequencing activities of planning and control (Christopher, 2016).
Loading
This stage focuses on the allocation of work on each and every activity. In other words
loading is a process of allocating of work to a part of planning and control operations. It is based
on available working time and capacity of every machinery, team members and theory capacity
of working and skills and knowledge. Overloading can reduce the quality of the products and
under loading can affect the speed of planning and control operations (Planning and control,
2016). Overall, IKEA should use appropriate tools and techniques for allocating time and cost.
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Sometimes, waiting time, lead time and extra time can increase the total time of task so, IKEA
needs to take some safety time for managing each and every task in effective manner. At the time
of loading organization needs to take into accounts some rest breaks, idle time, changing from
one activity to another, etc. Therefore, all these considerations will improve the overall loading
of work on each and every planning and control activities (Logistics & Operations Management,
2016).
Scheduling
It is also one of the important stage which helps in determining the time table of each and
every activity. Using this stage IKEA can decide schedule of each and every activity which helps
in completing activities on time. There are number of tools and techniques which can be used by
IKEA for scheduling each and every activity and these include Gantt chart and Project evaluation
and review technique, etc. In addition, forward and backward scheduling is also very important
for deciding total time for deciding the most appropriate path for completing project. Therefore,
these are considered as important tool for scheduling activities in effective manner (Schönsleben,
2016).
Monitoring and control
Monitoring and controlling is one of the important stage for determining progress of
entire operation. It plays important role in assuring quality of the furniture product as well as
help in determining the required changes for improving the finished products and services. Along
with this, for completing planning and control activities in effective manner IKEA needs to
monitor sequencing, loading and scheduling stages in appropriate way. Push and pull control
system is also an important tool which can be used by IKEA for intervention of input and
monitoring the output of the company by which organization and compare and re-plan the entire
plans in effective manner. Including this, Gantt chart and work breakdown structure can also be
used by organization for monitoring and controlling each and every activity in effective manner
(Rushton, Croucher and Baker, 2014).
3. DISCUSSION OF PLANNIGN AND CONTROL ACTIVITIES AND
RECOMMEDATION
As per the above discussion each and every planning and control activities of IKEA help
in attaining performance objectives in effective manner. Along with this, all these activities are
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effective for attaining long, medium and short term goals in effective manner. But sometimes
inappropriate planning and control activities can affect the quality of the products and services
which can affect the overall sales and profitability of the organization. So, for resolving these
issues IKEA should focus on needs and requirements of customers (Coyle, Langley, Novack and
Gibson, 2016). Along with this, organization needs to use electronic customer relationship
management system which help in making strong communication with customers which plays
important role in determining customer’s issues towards the products and services. It also plays
important role in developing appropriate strategies for managing each and everything in effective
manner. Further, IKEA should use different tools and techniques for developing planning and
control activities. For instance company should use Gantt chart, PERT chart, push and pull
system for loading, sequencing, scheduling and monitoring and control activities in effective
manner. Therefore, all these recommended strategies will help in managing planning and control
activities in appropriate manner by which organization can attain performance objectives in more
effective way (Christopher, Magrill and Wills, 2013).
CONCLUSION
The current research project has concluded that planning and control activities of IKEA
needs to focus on long, medium and short term objectives which leads accomplishment of the
performance objectives in effective manner. Along with this, for sequencing activities
organization needs to focus on customer priority, LIFO and FIFO methods. Further, PERT and
Gantt chart are appropriate tool for loading, scheduling and monitoring and control of every
activity in effective way. Therefore, report has recommended that IKEA should use operation
management tool for deciding planning and control activities for attaining performance
objectives (Dyckhoff, Lackes and Reese, 2013).
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REFERENCES
Books and Journals
Bozarth, C. B. and Handfield, R. B., 2016. Introduction to operations and supply chain
management. Pearson Higher Ed.
Christopher, M., 2016. Logistics & supply chain management. Pearson Higher Ed.
Christopher, M., Magrill, L. and Wills, G., 2013. Educational development for marketing
logistics. International Journal of Physical Distribution & Logistics Management.
Coyle, J.J., Langley, C.J., Novack, R.A. and Gibson, B., 2016. Supply chain management: a
logistics perspective. Nelson Education.
Dekker, R., Bloemhof, J. and Mallidis, I., 2012. Operations Research for green logistics–An
overview of aspects, issues, contributions and challenges. European Journal of
Operational Research, 219(3), pp.671-679.
Dyckhoff, H., Lackes, R. and Reese, J. eds., 2013. Supply chain management and reverse
logistics. Springer Science & Business Media.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan Page Publishers.
Fitzsimmons, J. and Fitzsimmons, M., 2013. Service management: Operations, strategy,
information technology. McGraw-Hill Higher Education.
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Schönsleben, P., 2016. Integral logistics management: Operations and supply chain
management within and across companies. CRC Press.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Toth, P. and Vigo, D. eds., 2014. Vehicle routing: problems, methods, and applications (Vol.
18). Siam.
Online
Logistics & Operations Management, 2016. [Online]. Available through: <
http://www.tp.edu.sg/staticfiles/TP/Schools/BUS/bus_lom.pdf>. [Accessed on 27th
November 2016].
Objectives of Performance Management, 2016. [Online]. Available through:
<http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/
0273756192.pd http://www.managementstudyguide.com/objectives-of-performance-
management.htm#f>. [Accessed on 27th November 2016].
Planning and control, 2016. [pdf]. Available through:
<http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/
0273756192.pdf>. [Accessed on 27th November 2016].
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