IKEA's Supply Chain Management

This assignment delves into the intricate workings of IKEA's supply chain management. It examines various aspects of their system, including procurement practices, logistics operations, inventory control, and distribution networks. The analysis emphasizes key elements such as efficiency, sustainability, and cost-effectiveness, highlighting how IKEA leverages its supply chain to achieve competitive advantage in the global furniture market.

Managing Business Activities
To Achieve Results

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Key functions and processes of IKEA and there dependencies and interrelationship..........1
1.2 Methodology which used to map any process to IKEA's goals and objectives....................2
1.3 Output of the process and purpose of a quality gateway in IKEA's operations department.2
TASK 2............................................................................................................................................3
2.1 One operational plan of business enterprise..........................................................................3
2.2 Three SMART objectives related to operational plan to align people and other resources in
effective way...............................................................................................................................4
2.3 Two appropriate systems to achieve objectives in effective manner on time.......................4
2.4 Work activities meeting the operational plan through effective monitoring and control of
the production process at IKEA..................................................................................................5
TASK 3............................................................................................................................................5
3.1 Quality system to manage and monitor quality standards within business enterprise..........5
3.2 Total quality management philosophy and how its can be used to increase quality and
efficiency in creating a quality culture in company....................................................................6
3.3 Improvements which align the objectives and goals of IKEA..............................................6
3.4 Implications of proposed changes within IKEA company...................................................7
TASK 4............................................................................................................................................7
4.1 Risk assessments required by legislation, regulation and organisational requirements,
ensuring appropriate actions is taken in the context of IKEA....................................................7
4.2 How health and safety regulations and legislation applicable in specific work situations
are correctly implemented to IKEA............................................................................................8
4.3 Systematic review of health and safety policies and procedures within company in order to
ensure they are compliant with legislation..................................................................................8
4.4 Practical application of health and safety policies and procedures within work place of
IKEA...........................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Managing activities to achieve results gives core attention to successful planning and also
focus on management of work activities so that they can be operated in most effective and
systematic manner. By managing organisational functions, business enterprise can utilise its
available technical, financial and human resources in appropriate manner. This concept provides
skills and knowledge to employees to design, implement and transform operational systems so
that they can improve their efficiency and also can achieve all desired goals and objectives of
business (Jeston and Nelis, 2014). This project report is based on IKEA which is Swedish
multinational company. It is large organisation which can be determined by its current strengths
of workers which is near around 135,000 employees. In this report, importance of business
processes in achieving organisational goals has been evaluated. Different plans has been
produced for managing activities within work place of IKEA. At last, various risks has been
assessed to manage health and safety within business enterprise.
TASK 1
1.1 Key functions and processes of IKEA and there dependencies and interrelationship
Business processes are those integrated activities and practices which helps in creating
final goods and services for end users of company. Mainly there are three types of processes
which helps IKEA in operating its organisational activities in most effective manner and these
are Management, operation and supporting processes. Management procedure helps company
in operating system which involves mainly strategic management and corporate governance.
Operational procedures helps company in producing and delivering its products to end user
safely and comfortably. Last but not the least supporting procedures helps IKEA by supporting
its core processes by recruiting high skilled employees and operating technical functions. Apart
from this, most important functions of this company are human resource management,
production, management system, accounts R&D and many more. All these functions are
highly depended upon above mentioned business processes (Achtenhagen, Melin and Naldi,
2013). Management system have to take help of administration procedure so that it can easily
manage work activities. For production section, company have to take help of operational
processes so that they products can be produced in most effective manner. Human resource
management takes helps of supporting processes to recruit most talents staff person for better
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growth of IKEA. Apart from this, there is huge interrelationship betwixt finance and accounts
section because they have to take help of each other for making financial records of company.
Hence, it can be said that there is relationship between all business processes and functions, and
also it helps company in achieving its all desired goals and objectives.
1.2 Methodology which used to map any process to IKEA's goals and objectives
By mapping business process, organisation can increase its efficiency as well as
effectiveness. This concept makes sure that all procedures of company are aligned with
organisational value and capabilities. For mapping any process of IKEA, its manager can take
help of various steps which are follows as under:
 Process identification: In this step players, work areas and major objectives of specific
process is identified by managers.
 Information gathering: In this stage, all the information regarding process is collected
by managers such as what is the process, who will operate its and some other facts.
 Process mapping: In this step all the facts or information is converted into a process map.
 Analysis: In this step, each and every activity of process is analysed through map.
 Adopt new methods: In this stage, all the unnecessary work is eliminates by managers
and some necessary methods and actions are taken by them (Zairi, 2012).
 Manage process: In this last step, map of process is maintained in most effective manner
and also it is monitored by managers for making any further changes in it.
Moreover, the most important process of IKEA is supply change management process
which it maps by above mentioned steps.
1.3 Output of the process and purpose of a quality gateway in IKEA's operations department
IKEA is a multinational furniture retailer company which takes helps of various policies
and processes to operate its business activities in most effective manner. But the most important
procedure of this company is supply chain management process which helps it in generating high
level of financial profit. Also, it helps in distributing its products and services in all over the
world in most effective manner.
This is the supply chain management process of IKEA which starts from acquiring raw
materials. Then it converts all the inputs into outputs by taking helps of production process so
that it can produce products as per the need of customer. After making final goods, this company
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distribute them to retailers so that it can reach to final customers for satisfying their different
needs and wants (Closs, Speier and Meacham, 2011). For evaluating supply chain management
process, company takes help of quality gateway to determine that procedure is effectively
working or not. Currently this process is impacting positive impact on business enterprise which
has been determined through quality gateway. On the basis of quality gateway, company can
make important decisions regarding its work place. By continuous monitoring of quality gateway
function organisation can accomplish its all desired goals and objectives, and also can improve
its supply chain management process on regular basis.
TASK 2
2.1 One operational plan of business enterprise
Business enterprise should design its operational plan only after considering its major
responsibilities which are market research , customer satisfaction and so on. IKEA use most
effective model namely management by objectives so that it can easily improve its business
performance. In this concept, company sets those organisational objectives which are made by
both management and employees. There is operational plan of IKEA which applies this concept
and it is discussed below: Set strategies: In this step, all the tasks and strategies are described which will help in
accomplishing desired goals and objectives of company. Stipulate performance indicators: In this step, all those factors are identified by
managers which helps company in improving its performance (Armstrong and Taylor,
2014).
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Illustration 1: Supply chain management process of IKEA

 Allocate responsibilities: In this step, different roles and responsibilities are allocated to
different people so that they can operate business activities in most effective manner. Set timelines and budget: In this step, managers set time limit for each and every task so
that it can be completed on time.
 Monitor and evaluation: In this last step of operational plan, all the selected strategies
and activities are evaluated on continuous basis so that mangers can make required
change sin them.
2.2 Three SMART objectives related to operational plan to align people and other resources in
effective way
IKEA sets its goals and objectives on the basis of SMART targets which are follows as
under:
 To enhance sales revenue of company by 15% within next two years.
 To increase market share of organisation by 23 % within next one year.
 To improve quality of products and services and increase customer base.
2.3 Two appropriate systems to achieve objectives in effective manner on time
For organisational growth and development, it is highly important fro company to
accomplish its goals and objectives in most effective as well as in systematic manner. For this,
IKEA can take help of various systems but there are two appropriate systems which are value
added chain and control plan. Value added chain is that concept which divides activities into
two groups which are primary and support activities so that they can be completed in effective
manner and also it helps in achieving business objectives. Primary activities involves customer
services, maintenance etc. on the other side support activities underneath the above mentioned
activities (Wheelen and Hunger, 2011). These practices helps company in meeting the
objectives by adding value. This concept ensures that products and services should be delivered
on time so that company can create value for customer and also can improve its quality. Apart
from this, IKEA can also take help of control plan which helps in comparing actual results with
standard results to determine business effectiveness. With the help of this company can achieve
its goals in most effective manner and also this concept assist company in making necessary
changes in business activities so that organisation will attain its desired results in appropriate
manner and on time. By taking help of both systems company can meet with all its quality
standards which are associated with this company.
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2.4 Work activities meeting the operational plan through effective monitoring and control of the
production process at IKEA
Success and failure of all companies depends upon their production process because
without this, they can not produce quality products and services. There are various activities
which is performed by production manager and these are sales forecast, preparation of
production budget, manufacturing planning, quality control, production control, operational
process, and so on. It is highly important for managers to monitor and control all these activities
so that company can successful execute its operational plan (Donate and Guadamillas, 2011). By
this they can take help of pulse meetings, variance reports, program reviews, technical reviews
and so on. By taking help of these methods IKEA can easily monitor and control its production
process so that it can successfully operate its operational plan.
TASK 3
3.1 Quality system to manage and monitor quality standards within business enterprise
With the help of controlling methods and systems, IKEA can satisfy needs and wants of
its customers and also can maintain quality standards within work place. Basically, this quality
management helps company in documenting all the processes, procedures and responsibilities
which helps in accomplishing quality objectives. Most important system which is used by IKEA
is quality circle. It is small groups of worker which works together to maintain quality. It builds a
strong communication within work place so that all managers and employees can communicate
with each and other and also can operate business operations in most effective manner. This
system helps IKEA in managing and monitoring its quality standards (Zang, 2011). If workers
will interact with each other then they can generate more innovative ideas which can help
company in maintaining its work and product quality. Apart from this, audit system is that which
helps in auditing financial results of company to make sure that organisation is accomplishing its
desired results in appropriate manner and also complying with standards.
3.2 Total quality management philosophy and how its can be used to increase quality and
efficiency in creating a quality culture in company
Total quality management is that managerial approach which helps in achieving long
term success through customer satisfaction. It is a philosophy which is used by business
managers to manage its stakeholders. In simple words, TQM is that effort in which all the staff
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members of company takes participate in developing products, procedures, services and
organisational culture in which they operate. Total quality management philosophy is based on
eight principles which are customer focused, total employee involvement, process centred,
integrated system, systematic approach, continuous improvements, fact based decisions making
and communication (McShane, Nairand Rustambekov, 2011). This concept helps in creating
quality culture within work place. Basically, quality culture is a belief of workers within work
place which motivates them to produce quality products and services. By creating this type of
culture, company can lead to high level of success and also can achieve competitive advantage
within work place.
3.3 Improvements which align the objectives and goals of IKEA
For better growth and development, it is highly important for business enterprise to
always improve their products, processes and policies on continuous basis. Without improving
current business activities no company can accomplish its desired goals and objectives. There are
various areas in which IKEA can improve its business performance and also can align its goals
and objectives with those improvements, these are follows as under:
Improve organisational structure: For accomplishing different goals and objectives, it is highly
important for company to improve its organisational structure. By taking help of matrix structure
it can allocate its activities and practices to different managers which are specialised in different
fields. This can help company in operating its all business functions in most effective manner.
Also, it help company in producing quality products and services (Zellner, 2011).
Improve leadership style: By making changes in leadership styles, managers can easily motivate
their workers. Highly motivated employees will contribute more in achieving business goals and
objectives.
Improve marketing tools and techniques: if company will choose marketing tools and
techniques as per customer demand than it can easily satisfy their needs and demands, and also
can increase sales revenue of company which is its biggest objective.
3.4 Implications of proposed changes within IKEA company
IKEA is a multinational company which is specialised in producing furniture items. But
due to continuous changes in business environmental factors, it is facing various problems. That
is why it has decided to make some improvements in its processes, policies and organisational
structure so that it can accomplish its desired goals and objectives in most effective manner. By
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adopting matrix structure company can improve its working environment. In this structure,
organisation hires different managers for different departments so that they all functions of
enterprise can be managed in most effective manner. This organisational structure helps in
various ways such as it increase unity of command within work place which assist employees in
operating business functions in appropriate manner (Garrison, Kim and Wakefield, 2012). It
influence positive impact on organisational efficiency and effectiveness. By changing leadership
styles, business managers and leaders can motivate employees in positive manner. Highly
motivated employees can lead organisation to high level of success. By taking help of advanced
marketing tools and techniques company can promote its products in most effective manner
which helps it in attracting huge number of customers.
TASK 4
4.1 Risk assessments required by legislation, regulation and organisational requirements,
ensuring appropriate actions is taken in the context of IKEA
Risk assessment is that concept which helps n determining all those risks which can
influence negative impact on business enterprise and its performance. According to legal
requirements, company should operate their business activities in systematic manner so that they
will not harm any person from inside and outside the company. IKEA should determine all those
risks which exist in work place. Organisation should provide all the health and safety measures
to employees so that they can use them at the time of emergency (Hammer, 2015). Also, should
provide them required training programs. Apart from this, company should consider indoor
ventilation, lighting, room sizes, moving walkways, clean toilets and so on. Moreover, IKEA
should provides training to its workers so that they can understand risk assessment and can find
their appropriate solutions. Hence, organisation should follow all the legislations regrading
health and safety which are required by legislation and regulation.
4.2 How health and safety regulations and legislation applicable in specific work situations are
correctly implemented to IKEA
It is highly important for IKEA to implement all regulations regarding health and safety
within its work place. It is a furniture manufacturing company so it is huge responsibility of this
company to follow various legislations such as Factory act, health and safety act etc. also, it
should provide provide equipments to its workers so that they can operate production activities
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safely. IKEA should provide first aid kit to employees so that at the time of any problem they
can take care of their self (Ahi and Searcy, 2013). Apart from this, organisation should organise
training programs in which employees should be trained about safety measures and their
utilisation in case of emergency. By providing special training program and different
equipments, IKEA can create safe and secure working environment. By doing this, company can
apply all health and safety regulations within its work place.
4.3 Systematic review of health and safety policies and procedures within company in order to
ensure they are compliant with legislation
There are various policies regarding heath and safety which is used by IKEA. This
company force its employee to use safety equipments while operating dangerous activities. This
policy ensures that no worker will get harm while engaging in hazardous process. Another policy
of this organisation is that it keep record of all accidents which takes place within work place,
also it deeply investigates the accident or any misshapen so that it can determine actual cause of
that accident so that it can make improvement in that area in which accident has taken place. All
these policies are according to legal laws (Aguinis, Joo and Gottfredson, 2011). For better
improvements in health and safety procedure, company should appoint a doctor for company
who will always be present in organisation so that in case of emergency he can take required
actions.
4.4 Practical application of health and safety policies and procedures within work place of IKEA
Company should follow all the health and safety regulations legislations and regulations
for creating safe and secure working environment within work place. IKEA should provide
knowledge to its employees about exist doors which they can use in the emergency of fire. Apart
from this, organisation should provide them training so that they can use hazardous equipments
and substance safely. Apart from this, company will create security department which will keep
all the required stuff which required at the time of emergency or accident (Antony, 2011). If
company will hire a doctor then he can take necessary actions in time of any emergency. Hence,
by performing all these activities IKEA can create safe ans secure working environment within
its work place.
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CONCLUSION
By evaluating this project report, it has been concluded that by managing each and every
activity of company, managers can utilise available resources in most effective manner and also
can accomplish all desired results within systematic manner. In simple words, managing
activities to achieve results emphasis on resourceful planning so that company can attain its
predetermined goals and also can increase business performance. For attaining satisfactory
results, employees should interrelate organisational functions and processes. In this report
various aspects such as operational plan, concept of total quality management and appropriate
systems has been discussed through which IKEA can improve its organisational efficiency and
effectiveness. Along with this, a complete risk assessment has been carried out which is required
by legislation and regulations to ensure that this company is taking right actions. For complying
with government rules and regulations it is highly important for business enterprise to implement
health and safety policies and procedures within work place. IKEA can take help of systematic
review of healthcare processes to ensure that it is complying with legislation and regulation.
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REFERENCES
Books and Journals
Achtenhagen, L., Melin, L. and Naldi, L., 2013. Dynamics of business models–strategizing,
critical capabilities and activities for sustained value creation. Long range planning.
46(6). pp.427-442.
Aguinis, H., Joo, H. and Gottfredson, R.K., 2011. Why we hate performance management—And
why we should love it. Business Horizons. 54(6). pp.503-507.
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and
sustainable supply chain management. Journal of Cleaner Production. 52. pp.329-341.
Antony, J., 2011. Six Sigma vs Lean: Some perspectives from leading academics and
practitioners. International Journal of Productivity and Performance Management.
60(2). pp.185-190.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Closs, D. J., Speier, C. and Meacham, N., 2011. Sustainability to support end-to-end value
chains: the role of supply chain management. Journal of the Academy of Marketing
Science. 39(1). pp.101-116.
Donate, M. J. and Guadamillas, F., 2011. Organizational factors to support knowledge
management and innovation. Journal of Knowledge Management. 15(6). pp.890-914.
Garrison, G., Kim, S. and Wakefield, R.L., 2012. Success factors for deploying cloud
computing. Communications of the ACM. 55(9). pp.62-68.
Hammer, M., 2015. What is business process management?. In Handbook on Business Process
Management 1 (pp. 3-16). Springer, Berlin, Heidelberg.
Jeston, J. and Nelis, J., 2014. Business process management. Routledge.
McShane, M.K., Nair, A. and Rustambekov, E., 2011. Does enterprise risk management increase
firm value?. Journal of Accounting, Auditing & Finance. 26(4). pp.641-658.
Wheelen, T. L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Zairi, M., 2012. Measuring performance for business results. Springer Science & Business
Media.
Zang, A. Y., 2011. Evidence on the trade-off between real activities manipulation and accrual-
based earnings management. The Accounting Review. 87(2). pp.675-703.
Zellner, G., 2011. A structured evaluation of business process improvement
approaches. Business Process Management Journal. 17(2). pp.203-237.
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