Operations Management at IKEA : Assignment

Added on - 21 Apr 2020

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Running Head: OPERATION MANAGEMENT1Operations Management: IKEA
OPERATION MANAGEMENT2IntroductionIKEA is a popular name, which is known as largest furniture retailer in the world. It is amultinational company, which was established in Sweden and headquartered in Netherlands.The company manufactures and sells ready to assemble furniture, home accessories andkitchen appliances. It was founded in the year 1943 by a 17 year old person, Ingvar Kamprad.Now, it is having its business operations on international level. It is operating its 410 stores in 49countries all over the world. The vision of IKEA is to create and provide a better and relaxed lifeto its potential customers across the globe (Chase, 2007). The company has developed the ideaof offering variety of low costs and well-designed furniture and home appliances to itscustomers. This report includes various aspects of operations management at IKEA byanalyzing the given case study. The company is implementing effective operation managementpractices to offer the quality products to customers. This report defines the critical successfactors of IKEA along with its operations management. At the end, it discusses qualitymanagement and strategies of IKEA.IKEA’s Critical Success FactorsIKEA as a largest furniture retailer in the world has enjoyed an excessive success in severalcountries. At any organization, excellent performance derives from its effective leadership andmanagement of personnel and careful balancing of international integration of its operations andprocesses by responding to the domestic tastes and preferences. The company is attaining agreat success in this industry. It has impressed not only its customers with better quality andaffordable furniture but also its competitors with its inventory management and supply chaintechniques (Chopra, 2009). There are many success factors, which assisted IKEA to succeed infurniture industry. Some of the major factors are stated below;Low-cost functional StructureIt is the major success factor at IKEA that it is adopting a low cost functional policy. Under thisstructure, the company is offering furniture with better quality at affordable prices. To approachits low cost strategy, the company always focuses on balancing the cost effective labor with thequality standards of its products and services. The company is emphasizing on developingbetter relationships with the suppliers in developing nations to save funds on production andlabor. Due to this, company is able to offer the furniture and other home accessories on lowerprices than its competitors. At IKEA, the furniture is designed to ship stripped, and all productsare delivered flat. This flat packaging makes it easy for the people to transport the products
OPERATION MANAGEMENT3home and it assists them in saving the money on shipping process. Thus, it is the major factorbehind the success of IKEA in today’s competitive business environment (Dale, 2015).Unique distribution systemTo compete with the leading players in the industry, IKEA is adopting a unique distributionsystem. There are different distribution channels, such as; IKEA Super store, IKEA catalogs,IKEA store websites and IKEA family e-mail subscription, which are used by the company toapproach its potential customers. The distribution system of the company is very exclusive, as itdelivers the furniture unassembled in flat boxes to decrease the costs on shipping. It assists thecustomers in saving money and delivery time. Flat packaging reduces the labor costs, damageof furniture in transportation, space for storage and costs on shipping. By doing this, thecompany can offer the products on the price at 30% to 40% less than its competitors, to thecustomers, who are desired to assemble their furniture and home accessories by themselves(Forno, & Graziano, 2014).Effective Operations ManagementOperations Management is a significant part of the success of IKEA. The company isincorporating various processes in its operations management to make production and deliverysmoother. Offering great shopping experience is one of the major parts of its operationsmanagement. They have set up the stores and settle their catalogues with the themes ofkitchens, bedrooms and bathrooms etc. which entice the customers. It is providing differentfacilities, like; it has provided supervised play area for the children, small cinema and baby andparent room, so parents can leave their kids in supervised play area, when they do shopping atIKEA stores. It understands the needs and expectations of customers before manufacturing theproducts. The operations strategy of IKEA includes store’s layout, designing styles furniture, andstore location, effective delivery of products, inventory management, and effective supply chainand developing the products with higher quality standards (Gibson, 2012).Thus, these are the major factors, which are contributing to the success of IKEA.Importance of Operations ManagementThe given case study indicates the how the operation management is significant for the successof IKEA. It shows that IKEA is the best example to explain the importance of operationmanagement for all types of businesses. In the production and manufacturing stage, theorganization aims to decrease the wastages and enhance the resources and time management
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