Operation Management at IKEA Australia

Running head: OPERATION MANAGEMENT
Operation Management
Name of student
Name of University
Author note

1OPERATION MANAGEMENT
Table of Contents
Introduction................................................................................................................................3
Overview of the organisation.....................................................................................................3
Functions, roles and inventory management..............................................................................3
Theories associated with the effectiveness of organisation’s inventory management...............5
Supply chain systems and major stakeholders...........................................................................5
Recommendations for improvements........................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................6

2OPERATION MANAGEMENT
Introduction
The report is prepared to discuss about the various aspects of operations management
considering the business organisation named IKEA in Australia. I have been selected as the
Operations Manager to ensure improving the supply chain management systems and
inventory systems required to manage smooth production and attain higher profit and
competitive advantage in business as well. The topic will also present us about an idea of
various functions, roles as well as the types of inventories along with the theories related to
the inventory management of the organisation and supply chain systems (Burke, 2013). If any
issues are experienced, there will be few recommendations provided in the last section for
enhancing the business performance and effectiveness largely.
Overview of the organisation
The business organisation named IKEA sells ready to assemble furniture goods,
wooden items, kitchen appliances and home accessories required to meet the demands and
expectations of the customers present in more than 52 countries all over the world. There are
over 424 stores of IKEA operating in different location to cater the needs and preferences of
people, furthermore ensure high level of satisfaction and generating higher revenue in
business as well (Zhang, Shah & Papageorgiou, 2013). The company is known for its ready
to assemble goods ad home products that are made available for the customers at a very
reasonable price, which has also influenced the consumers’ buying behaviours largely. Not
only does the company sells good design home furnishing products, but also has helped in
maintaining cost efficiency along with setting new standards to make necessary changes in
the supply chain management operations and facilitate innovation all throughout (Wild,
2017). The company has further been able to manage inventories and supply chains
effectively with the investments done on Information technology, which has improved the

3OPERATION MANAGEMENT
organisational capability to forecast things, gain enhanced effectiveness of supply chain
management and higher productivity too (Ikea.com.au, 2019). The company has been one of
the largest and most reputed home furnishing retailing company and ranks 40 on Forbes’
esteemed World’s Most Valuable Brands list with over $39.3 Billion sales achieved in the
previous year.
Functions, roles and inventory management
IKEA, Australia has a clear vision and mission statement, which has allowed for
delivering good design and functional home furnishing products and services at a reasonable
price range, thus created convenience for the customers to make purchases consistently. The
various functions managed by the organisation include management of inventories and
supply chain operations and processes required to manage value proposition and ensure
smooth business functioning (Axsäter, 2015). The company has also been committed to
excellence considering the management of a catalogue of products and services that have
been stocked at a guaranteed price as well.
The roles and functions also include cost savings while managing the designing of
furniture and home furnishing items, which incurs much lesser cost and at the same time,
meets the requirements needed to manage smooth functioning along with effective
distribution of products, maintaining the quality standards and creating a positive impact on
the environment (Fredendall & Hill, 2016). The different types of inventory in the inventory
mix are raw materials and supplies made by the suppliers, work that is in progress and
the finished goods and services of IKEA. The inventories are actually the stocks consisting
of the goods and services that are stored at locations to facilitate the production and meet the
demands and expectations of different market segments in Australia with much ease and
efficiency. The company manufactures and produces the home furnishing goods and services