IKEA Operations Management Report

This report analyzes IKEA's operations management, examining its transformation process, evaluation of key factors, and process design. It delves into IKEA's inputs, processes, and outputs, highlighting its strengths and challenges. The report also explores the layout and flow of IKEA's process design, identifying problems and solutions implemented. Finally, it examines the main objectives of IKEA's process design and assesses their achievement.

TRANSFORMATION, PROCESS AND
EVALUATION OF OPERATIONS
WITH PROCESS DESIGN OF IKEA

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
PART 1 ...........................................................................................................................................1
PART 2 ...........................................................................................................................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Ikea is the largest furniture retailer and is one of the oldest famous family owned brands
in the world. They are into selling contemporary and ready to assemble furniture and are
operational in almost 50 countries with nearly 415-plus stores worldwide and is headquartered at
Leiden, Netherlands. This assignment is going to put insights on the assessment of operations
and its different facets with respect to Ikea.
PART 1
Transformation, Process and Evaluation of Operations
Ikea is into business for so long and the major contribution is due to its compact and well
established operational departments that work together in sync and with complete cooperation.
Inputs
Procurement: They are known for the high quality products and have achieved it through
optimisation of their pieces and other raw materials in proper manner. Along with, their
additional accessories such as shelves, racks etc. that are arranged for proper management of
their conditions by using environmental friendly materials to reduce the wastage, pitfall areas
with an incremental intensity to design their proactivity in combating any issues related to
environmental factors and more (Hill and Hill, 2017).
Inventory Management: Cost-per-touch is the unique and most different part of Ikea which
followed this concept in all their stores worldwide. This reduces the costing and the customers'
do not pay any additional amount that automatically helps this establishment by avoiding the
retrieving process. Along with, they prefer self services as their products are automated packed
by machines which continuously works for 24*7 annually. This adds to the controlled retail-
warehouse arrangement with keeping the in-store logics chain intact.
Process
Designing:Their ulterior aim is to provide sustainable and ergonomically sound product which
must be functional and affordable as well. Moreover, prototyping consumes time and also incur
costs and to minimise this, the designing team works on the same lines and in constant order with
the production team to understand the constraints or any restricted capabilities that might occur
during manufacturing stage.

Manufacturing/Production: This part includes the entire processing for making the design of
furniture into a reality by incorporating new technological methods to understand the
infrastructural forecasting along with the viability of forecasting and planning in the product
development. This department believes in advanced framework to lay a uniformity in the
resources' allocation with lowering costs per production.
Outputs
Supply Chain Management: Ikea believes in sustainable growth in terms of competitive
advantages. They have signed long term contracts so that they build an ambience of trust and
loyalty with the implication of low cost of goods. With this mutual consent, their designers can
create a way out to make improvements in the product's packaging and distribution as well.
Furthermore, this would lead them to mark their inventory management with 95 percent which
have made a strong alignment and made them the undisputed the most successful retailer in
furniture (Lu, 2011).
Logistics: Their personnel are available in all the stores to guide the customers' while ordering
and assist the store manager in handling the products as well. In regard to the same, a tactic
named minimum/maximum settings has been implemented for proper replenishment by
strategically balancing the demands of clients and the space management at their
warehousing/inventory.

Analysis of factors at Ikea
The following factors are the benchmark that have led to this franchisee's establishment
on the global map.
Volume- This is the determinant that infers the space management of this enterprise. It strongly
demonstrated that Ikea has high volumes of keeping their inventory, and products with
substantial availability for maintaining their reputation at heightened levels. Hereby, Ikea's team
has always promoted the notion of innovation and creativity to carve its niche by employing the
tangibility quotient in proficient manner.
Variety- It is imperative to sustain in this competitive markets globally so that the associated
complexities can be curbed with time efficiency by employing several apt mechanisms to
optimize the feasibility of the capital intensive approachability techniques that have assisted this
establishment to grow and outshine its counterparts and foster its products in the most simplistic
composition.
Variation- This establishment has been catering its high end customers' with being adaptable to
their expectations, demands and specifications without compromising on the qualitative
standards. It has never been in a vulnerable state due to its versatile capabilities on tapping the
latest trends and fads to attract the targeted audience and retain their existing clients.
Illustration 1: Activities of Operations Management
(Source:Lampshire, 2014)

Visibility- Ikea's visibility in this sector is prominent and static to its truest form. Their
unambiguous orientation in providing the best of products in terms of affordability and quality is
commendable. However, there is a crunching situation with an upsurge of many companies
slowly coming in the loop of this never-ending procedure of manufacturing and designing as
well. Along with this, it has been in the market for 75 years now and has gained a respectable
position by being aware and overcoming their shortcomings in an effective, efficient and
persistent order.
With respect to the complete evaluation of all these four components, it can be inferred
that Ikea has been on toes for suitable arrangement of their operational activities that involves a
wide array of products and services (Beynon-Davies, 2013). There has been a keen objectivity to
reach all the geographical locations in the most viable manner by understanding the
multidimensional component attached with the marketing and other functional units of the
operations' management.
Moreover, the most important considerations as per this firm is the visibility because it is
directly linked to the strategic pricing of their products. Moreover, their provision of zero-waste
policy has also elaborated on the visibility parameter as there is an emphasis on the overall
auditing of the disposable income for reaping benefits in an orderly sequence.
PART 2
Describe Layout and flow for process design
Customers-Ikea has always followed the customer-centric approachability quotient with
identification of their control on the minds of the customers' in an appealing demeanour.
Nonetheless, they have also implemented a disoriented and zig-zag layout while planning their
store design and segregation of entire floor plan in a maze like structure to compel their
customers' to exhibit their rash behavioural approach while purchasing any product (Heikkinen,
2014). Along with, this administration has moved its trailing by building a psychological effect
on the decision making skills of the consumers' who ends up buying more than their respective
needs or requirements.
Materials- It shed light on the precise and coherent supply chain management that have been
established at Ikea. Along with, the layout of a procedure has emphasised on bringing the
improvisations by setting up the store or manufacturing unit through several functional units

such as handling of inventory, flow of materials and more. Along with, it has also maintained
low manufacturing costs to meet the customers' specifications in relation to affordability,
costing, distribution and quality. It has also consisted of various processes with production units
that must be constructed in such a manner that its viable and feasible in the management of all
operational processes.
Information- This part is connected in direct terms to frame the outline of financial information
along with expansion plans. It has also participated in strategic decision making for building a
pool of ideas and concepts to gain the strengthening of layout and its advantages in maintaining
the record keeping and the information systems by forecasting and developing the tactics
adopted by this firm. Moreover, it gives insights on the overall assessment of the production and
designing approaches by analysing the whereabouts and current status of the economic
progressive pathway.
Identify any problems with the Operations and solutions implemented
Ikea have always faced few challenges in specific operations that has inhibited their
proactivity of conducting and managing the designing aspects in amicable mode. Their focus is
on the comfortability factor that laid the foundation of mutual respect and trust among their loyal
customers' base. Warehousing arrangement is the forte in which the stacking of materials,
products and other materials have been put in a distinctive and convenient manner to avoid any
confusions while handling the customers (Ayodele and et.al., 2013). This sales function is one of
those functional units where this establishment's administration and the entire organisational
setup is still in an amateur state and needs guidance to eliminate the obstacles with proficiency
and effectiveness. Here, the products which did not get purchased has to be kept in storage arena
leading to its maintenance issues and non-usibility as without any maintenance, it could become
very taxing for the staff and store manager to keep such unused products in suitable order.
Moreover, the space allocation in such big and gigantic stores can lead to high
management of various possessions along with selection of skilled labour who could support in
arranging the layout and hygiene factor. Along with, as time passes by, there will be the need of
supervision of such commodities so that their zero wastage policy can be followed with
discipline and a sense of responsibility.

Main objectives of the process design and whether these objectives are being achieved
Their objective for designing the entire process is based on creating a home with better
facilities and sustainable focused orientation to provide a safe and secure atmosphere by
fostering the nourishment quotient to customize the customers' specifications and guidelines
through achieving the ergonomics that are in contact with fulfilment of commitment and
satisfaction. Moreover, it has helped the establishment to understand the critical touch-points that
are needed for engaging the designing with the capitalistic approach.
Furthermore, this enterprise has created history by following the environmental aspects
through accession of undertaking their operations by spreading the knowledge and adopting
different methodologies and techniques to create an institution of the responsible forestry
(VENKATESH, 2012). This has accelerated the loop of their supply chain of wood and its
related materials. Additionally, this objectivity have put insights on their thirst of giving a variety
of products by forming the feeling of goodwill and harmonious viewpoint that supported them to
comprehend their customers' needs and ideologies through suitable customers' segmentation.
CONCLUSION
It has been summarized that there is a necessity of transformational procedures at Ikea to
sustain its name in the global market. Along with, this establishment has put consistent efforts in
maintaining the values and ergonomics is known for. This report has summed up about their
objectives, issues and an outline on the basis structural framework.

REFERENCES
Books and Journals
Ayodele, A. and et.al., 2013. A critical evaluation of the application of Total Quality
Management at IKEA.
Beynon-Davies, P., 2013.Business information systems. Macmillan International Higher
Education.
Heikkinen, A.M., 2014. Business model transformation process in the context of business
ecosystem.
Hill, A. and Hill, T., 2017.Essential operations management. Macmillan International Higher
Education.
Lu, D., 2011.In pursuit of world class excellence. Bookboon.
VENKATESH, U.D., 2012. QUALITATIVE ANALYSIS OF VALUE GRID MODEL:
DEVELOPING VALUE GRID MODEL FOR IKEA FROM VALUE CHAIN
ANALYSIS.
Online
Lampshire,A., 2014. Operations Management. [Online]. Available
through:<https://slideplayer.com/slide/2488129/>.