Comprehensive Report: IKEA's Operations Management and Strategies

This report provides a detailed analysis of IKEA's operations management. It begins with an introduction to the company's focus on consumer value, product design, and clever solutions. The report emphasizes the importance of operations management for IKEA, detailing its functions, including planning, managing, and coordinating. It also discusses the operations management process model used by IKEA, including input, conversions, monitoring, and output. Furthermore, the report explores the significance of the Three Es (Economy, Efficiency, and Effectiveness) to IKEA's operations and examines the influence of cost minimization and quality maximization. The report also assesses the importance of performance objectives related to business performance. Finally, the report discusses network analysis and quality management techniques applied to improve operations within IKEA, providing a comprehensive overview of the company's operational strategies and challenges.

OPERATION
MANAGEMENT

INTRODUCTION
This present report is based on the operation management of IKEA. IKEA is the business
of mail order sales and it offer the designed home furniture products to their all customers. The
IKEA aims to focus on the consumer value, product designing and clever solution(Heizer and
Barry, 2013). Operation management is a process in which it design, organise, control,
coordinate the activities of the organisation and produce the products and services for the
company's customers. This report contain all relevant information like, why the operations
management is effective for the company and the operations functions of IKEA organisation and
which type of process model the operations management is using for the IKEA company. This
report also tell about the importance of Three Es to IKEA and significance of performance
objectives that support the operation management for company. It also measure the critical path
and network analysis and needs for operation management. In this report it also defines the
network plan and quality management techniques which are applied for improving operations in
IKEA company.
TASK 1
1.1 Importance of operations management for organisations
The operation management is important for the IKEA company . The operation
management manage the process of the company for increasing the productivity of the company.
The area of an organisation in which designing as well as controlling procedure of production
and business operation of goods and services included is known as operation management (Baek
and Kim, 2011). The operations management controlling and manage the activities of the
company. Every organisation need to implement the effective management of the operations
because it design, plans, organise and improve the productivity of the company. There are certain
importance of operations management for IKEA company. They are as follows: Engineering: Engineering is an importance of operations management which is
important for the IKEA company. Without the effective operations the engineer of the
IKEA company cannot manage the operation of the company. So, the knowledge of the
overall operation is important for the engineer of the company (Nakayama and Bucks,
2012). Finance: The knowledge of operation management is important in case of the finance.
Finance is the main importance of operations management because the finance make the
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operation effective and can manage the operation of the IKEA company. It increase the
more and more capacity of the operations. Marketing: Marketing is helpful for the IKEA company because it increase the
promotions of product and services for the development of the operations pf the
company. It develop the new idea for the products and increase the efficiency of the
operations of company (Rastogi, 2010).
 Information technology: Every kind of organisations need to IT for the operations of the
company and it build the effective operation activities of the company. The effective
knowledge of operations management is important for the professionals of IT. In the
modern time, it is effective and useful technology of operations management for the
companies.
Hence, it can be concluded that operation management term is one of the highly
supportive for the IKEA organisation. This particular concept plays important role in
engineering, finance, marketing and IT department up to the greater extent.
1.2 Operations functions of IKEA company
The operation functions are important for the management of the IKEA company because
the operation functions mange and control the operations of the company. The functions are as
follows: Planning: The planning is the operation function of the IKEA company. The effective
planning is important for managing the human resources of all activities of the company.
The process of effective planning is needed for the expansion of the company and the
effective planning can determine the future demand of the customers. The planning
process also can increase the profits and profitability of the company and make the
organisation effective. Due to lack of poor planning, the management cannot allocate
required resources in proper as well as adequate manner. Therefore, smooth functioning
of the cited entity affects adversely. Managing: It is also a function of the operation of the IKEA company in which it
manage the all activities of the company and make the company operation successful.
The operation functions provides the effective team work for managing the successful
operations and it also manage the resources of the company (White, 2016). By
considering the function of managing the IKEA able to utilise all the resources in
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optimum manner. By doing this cost of the production and profit of the company both
will be changes in favour of the entity.
 Coordinating: It is also a operation function of the company. This operation function
provides the coordination between the all department of the company. Coordination
examine the accurate information for fulfilling the company goals and objectives. It also
coordinate the role and responsibilities to the staff for their job. Better coordination level
leads to establish effectual employee relations at the workplace by which issues regarding
dispute and conflict overcome easily.
It can be ascertained from the present task that, planning, managing as well as
coordinating these all are very important operation functions of the organisation IKEA. With the
help of such functions it able to meet with the targeted objectives and goals.
1.3 Operations management process model for IKEA organisation
The operation management use the process model for the company. The procedure of
business in which raw materials and resources are converted into finished products and services
for selling in the market is known as operation management process. There are four process
model which is using by the operations management of the company. They are as follows: Input: It is a process model of the operation management which includes the raw
material, machinery and land, labour and labours of the company (Niknam, Meymand
and Mojarrad, 2011). The company supplies the wood and other raw materials for
designing the quality furnitures to the customers. The lend and capital are also required
for manufacturing the effective furniture. At the time of initial stage of operation
management process, raw materials and purchased from the suppliers. In this very basic
issue arisen is that, sometimes suppliers supply more raw materials by which stock
increase in the firm. Conversions: The labour and wood two is important for the interpretation of the IKEA
company. The labour maintains the all design of the furniture and analyse the demand for
the higher production. Without the labour the company cannot survive in the market
place. In this step, issue involved is related to putting raw materials in production
procedure appropriately (Mohammadi, et. al., 2013). If input are properly not incurred on
the process then lead to increase number of damaged products and services in IKEA firm.
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 Monitor: It is the next process of the operation management in this model the IKEA
company need to check the finishing of the furniture. Monitoring is important for
checking the quality of the furniture because the quality furniture reduce the risk of the
furnitures. Problem at this stage is regarding to the proper monitoring as well as
controlling on the production process. If the management not control over the production
then lead to decline quality.
 Output: It is the last process model of the operation management in it includes the final
product and services of the company. The output problems includes, logistics problems,
time problems and other problems of the company. Issue at the last phase of operation
management process is related to the final goods and services. Sometimes, volume of
output declines along with the quality with same quantity of raw materials.
TASK 2
2.1 Significance of Three E's to the IEKA organisation
The Three Es is very important for the IKEA company. The Three E's are stand in the
company for Economy, Effectiveness as well as Efficiency. These all are helpful for increasing
the operations of the company management. The Three Es' are as follows: Economy: Economy is the one Es' which is important for the any kind of the organisation
and make the operations effective for the development of the company (Pinkerton,
2011). With the help of the economy. The company can reduce their unnecessary costs
and make the effective cost of the company's products and services. It provides the
effective economy environment for the operations of the IKEA company. In the modern
era, the economy has implement the productive projects with the better amount of money
(Bahmani-Firouzi and Azizipanah-Abarghooee, 2014). Efficiency: It is one of E's which is important for the operations of the IKEA company.
Efficiency means work smoothly for making the effective goods and efficiency is also
important for eliminating the wrong processes and they do not lead them for the finished
goods of the company. The company is the furniture company which provide the home
furniture product. The company can increase the growth of the company through the
paper management (Chen and et.al., 2011). If the efficiency is effective in that case, the
company can take strong decision regarding to the products and services of the company.
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 Effectiveness: It means when the result of the operation is match with the wants of the
consumers in that case the company is able to improve the performance of the company.
Effectiveness means provides the effective opportunities to their customers who have no
time for purchasing the company's products.
Henceforth, the above stated three E's which denote to Economy, Efficiency and
Effectiveness through which IKEA able to boost up its performance level in the industry. Along
with this, management of the operation department also smoothly run in proper direction which
is sign of achieving objectives and goals.
2.2 Influence of tension among minimising expenses as well as improving standard or quality
within company
The IKEA company should select that input which can help the organisation for minimise
the cost of the product because the price of the product is depend on the cost of the products.
Cost minimisation is a type of the risk for the quality of the product. When the company try to
minimise the cost of the products in that case, company have to provide the poor quality of the
product. Low quality of product is bad for the success of the IKEA company. Cost minimisation
is important for minimising the cost of the products and services whereas the quality
maximisation is important for maximising the quality of the product and services. Best quality of
the product helps the organisation to satisfy the needs and wants of the customers for providing
the quality products to their new and existing customers(Moghaddam, Seifi and Niknam, 2012).
Expenses are considered as one of the highly sensitive aspect for the business because it
creates impact on the product quality. As costing of the firm increases then it cannot purchase
high standard of the raw materials along with resources. On the other hand side, lower cost of
production supports to increase profit through which company able to provide high quality of the
goods and services. The cost minimisation and quality maximisation is same from the supply and
demand for the products and services. The effective quality of products will increase the profits
of the company. The quality product occupy the larger place in the market for the company
products and services. The tension cannot be neglected from the cost minimisation and quality
maximisation. The company should reduce the gap between the cost minimisation and quality
maximisation because this reduction is very important for the success of the company. The
company can reduce their product cost with the help of transportation cast, maintenance cost,
employees cost and the overhead cost.
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If cost of the company and production is higher, then it cannot produce high quality of
the goods and services. Moreover, lower the total costing leads to boost up product standards,
sales as well as business performance in the industry.
2.3 Assessing importance of the basic five purposes related to business performance
There are the five performance objectives which underpins the operations management of
the IKEA company. The five performance objectives are as follows: Reducing cost: It is the one of the performance objectives which underpins the
operational management of the company. The cost reduction strategy is very important
for the IKEA company because it helps the company for achieving the economy strength
and it provides the more profits to the company. Digitalization: It is also a performance objectives which support the company's
operations management. It increases the demand of the customers for the products and
services and motivate them for purchasing the more and more products of the company.
The digitalization provides the online shopping website for increasing the productivity
and profitability of the company and it plays an important role in the success of the
company (Tang and Musa, 2011). Reaching more customers: It is the next step of the performance objective which is
useful for the operations' management of the company. The IKEA furnitures company
provides the effective and quality home furniture product to their all customers. It
satisfies the needs and wants of the customers related to the quality products and services
and increase the number of customers for the growth of the company (Baek and Kim,
2011). Promotional campaign: The promotional campaign is important for promoting the
company's products. The furniture company increase their sales with the help of the
different promotional channels. So, it is the effective performance objective which
support the operations of the company (Sedaghati and Kavousi-Fard, 2014).
 Focusing on efficiency: The efficiency is also important for the success of the company.
If the company focusing their efficiency in that case, the company can increase the sale of
the company.
It can be said that with the help of above stated purposes as well as objectives the
company able to influence its performance in the industry. Those factors by which business
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performance will be increased are like focusing on efficiency, reaching more consumers,
promotional campaigns, declining expenses as well as digitalization.
TASK 3
3.1 Value of the linear programming function in the production procedure of the firm
The linear programming is one type of mathematical process in which it provide the best
output result and the linear programming is effective for the production process because it
increase the profits and decrease the cost of the company's products (Niknam and et.al., 2011). It
is also helpful for the optimisation of the problem regarding to the operational management. The
linear programming maximise the quality and quantity of the products and achieve the more and
more customers of IKEA company. The company provides the effective and quality products and
services to their all customers and manager the operations of the company.
With the help of the linear programming, the company can reduce the cost of the products
and can maximise the quality of the products for increasing the demand of the future customers.
The linear planning has been implemented in the business place for managing the effective
decision making. The manager of the company can calculate the units of production, and price of
product and can sale the more products for the profitability of the company. So, the linear
programming has valuable for the production process.
In the linear programming higher level of analytical as well as statistical skills and
attributes required. Due to lack of proper and adequate skills the manager unable to frame linear
equation and resolve issue of the operations. Through this, costing and profits both are identified
and then modified within company using several appropriate strategies. Henceforth, by applying
high level of skills like statistical and analytical the linear programming is considered.
3.2 Appraise critical path and network planning
The network planning is important for evaluating the critical path of the all activities
which are given for drawing the network. The critical path is the management tool of the project
which includes some steps are as follows:
 In the first step, it make the larger project for which it set out the all activities on the
individuals basis. So, the individual activities are important for calculating the critical
path of the network(Bazmohammadi, Karimpour and Bazmohammadi, 2012).
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 In shows the step-to-set order in which the the activities have to be appropriated. The
early start time and late start time is needed for calculating the critical path of the
network.
 When the all activities gas completed in that case, it analyses activities which can take
place for calculating the critical path of the network.
 For reducing the overall time, the company can take one activities one or more time for
completing the project network because one or more time used activities can minimise
the overall time of the effective project (Weining and et.al., 2010).
 In the last step, it shows some resources which is needed for the network planning of the
project.
The critical path analysis is the process in which it analysis the network planning and
make the appropriate network for the project.
3.3 Maintain need for operational planning
Operational planning is a system in which it make the effective operational plan for the
company. The operational planning and decision of controlling is important for controlling the
capital, raw materials and labor for providing the quality goods and services to the company's
customers. The decision of controlling should be made for the short time period. The short time
can be moth-to-month, hour-to-hour and can be day-to-day.
The controlling input is useful because it provide the quality and quantity products and
services to the customers. The IKEA furniture company use the operational planning and the
control decision for identifying the demand of the future customers for the growth of the
company. The operational planning is important because it control the activities of the company
and with the help of operational planning, the company can produce the more products for the
daily and new basis customers. The existing system cannot provide the future demand for the
product and services. According to the modern time, the short time operational decision is
effective for increasing the demand of the products and services and the development of new
product and trends of the unexpected market can forecast the future demand of the customers
(Chen and et.al., 2011).
The planning is highly significant for each and every operation and production process
along with the control aspect as well. When the plan and schedule of further manufacture is
appropriately framed then it will be helpful for achieving objectives. When the IKEA makes
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proper plan and go according to the determined activities then capable to reduce total number of
wastage products at the workplace. When damaged items decline in the production procedure
then quality of goods and services affect up to the higher extent. Moreover, due to effectual
controlling over the process will help to the IKEA in terms of boost up efficiency as well as
productivity of the products. Hence, it can be said that, by considering operational scheduling
and controlling, production procedure of IKEA improves up to the greater level. Once the needs
and requirements of the operational scheduling are maintained within workplace of IKEA then it
able to meet with the objectives. All the needed activities of converting raw materials into
completed products are identified and settled in the procedure of planning. In case any loopholes
remaining in the smooth scheduling and it continues over the years then affects overall operation
department.
Further, it is highly mandatory for the IKEA for maintaining requirements of the
operational functions up to the greater extent.
TASK 4
4.1 Operational outcomes for IKEA Company
There are different operational outcomes which is applied for improving the operations of
the IKEA company. The different operational outcomes are as follows: Attracting young customers: The company use the operational outcomes for attracting
the young customers. In the modern time, the company products increasing the number of
the competitors for the same products. The IKEA need for expansion of the company for
increasing the young customers for their new and innovative furnitures. So, the
operations outcomes providing the marketing techniques for the attracting the young
customers (Mohammadi, Mozafari and Solimani, 2014). Attracting more customers: with the help marketing techniques, the company can
promotion their all products and services for attracting the more number of customers to
increase the sale of the company. So, the expansion of the company is important for
attracting the more number of customers of the products (Niknam and et.al., 2011).
 Making the products easily available: The company can make the products easily
available with the help of the marketing techniques. The company need to increase the
number of stores for the availability of the products in the all areas and in that case, the
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company can increase the sale for the products and make the more profits for the
expansion of the company.
4.2 Produce a network plan
Task Name Duration Start Finish Predecessors Total Slack
Redesign product 6 days Thu
8/10/17
Thu
8/17/17 0 days
Redesign packaging 2 days Thu
8/10/17 Fri 8/11/17 8 days
Order and receive
components for
redesigned product
3 days Fri
8/18/17
Tue
8/22/17 1 0 days
Order and receive
material for redesigned
packaging
2 days Mon
8/14/17
Tue
8/15/17 2 8 days
Assemble products 4 days Wed
8/23/17
Mon
8/28/17 3 0 days
Make up packaging 1 day Wed
8/16/17
Wed
8/16/17 4 8 days
Package redesigned
product 1 day Tue
8/29/17
Tue
8/29/17 5,6 0 days
Test market redesigned
product 6 days Wed
8/30/17
Wed
9/6/17 7 0 days
Revise redesigned
product 3 days Thu
9/7/17
Mon
9/11/17 8 0 days
Revise redesigned
packaging 1 day Thu
9/7/17 Thu 9/7/17 8 2 days
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