IKEA Production and Supply Chain

This assignment examines IKEA's production and supply chain management. Students are tasked with analyzing their lean manufacturing practices, including value stream mapping and production flow analysis. The assessment also requires an evaluation of IKEA's risk mitigation strategies across various areas like material sourcing, logistics, and environmental impact.

MANAGING OPERATIONS

EXECUTIVE SUMMARY
Operations management is a administration of business operations which helps the
organisation to maximize its efficiency and performance. It transforms raw materials and labour
into finished products which aids to increase its profit. The present report describes about
product and service design and process design of corporation at the workplace. It explains about
short term and long term planning which are carried out by organization. In addition to this, it
represents innovation and improvement by defining some tools and techniques for IKEA.
Furthermore, it state supply chain procedure of organisation. It demonstrates use of quality
management to increase quality of furniture products. It gives many suggestions to improve
overall functions of organisation at the workplace. Operational approaches, product and service
design contribute effectively for IKEA to handle its activities. Furthermore, planning, controlling
and process design aids organisation to develop effective manufacturing strategies. Other than
this, innovation techniques aids the firm to improve its operation more efficient as compare to
before. It can be evaluated that quality management tools and techniques such as continuous
improvement and total quality management contribute effectively for IKEA to decrease quality
problems in furniture commodities.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................2
Brief information about organization..........................................................................................2
MAIN BODY...................................................................................................................................3
Operation strategy of IKEA........................................................................................................3
Product and service design of corporation..................................................................................4
Process design of organization....................................................................................................5
Explaining planning and control of management of IKEA........................................................6
Innovation and improvement......................................................................................................8
Supply chain process of IKEA....................................................................................................9
Quality management of corporation..........................................................................................10
Recommendations.....................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
1

INTRODUCTION
Operations management can be referred as administration of business activities which
aids to produce the highest level of efficiency and performance in the organization. It helps the
firm to transform raw materials and labour into finished products which supports to maximize its
income in the market. Furthermore, it is necessary for the management of corporation to achieve
goals and objectives (Chiu-Chi and et.al, 2013). The present report describes about the current
operation strategy of IKEA. Furthermore, it introduces product and service design approaches for
corporation . In addition to this, it measures the impact of design and new product development
in the present sector. It describes process design of company at the workplace. It states about the
short term and long term planning which are implemented by IKEA. Further, it introduce about
innovation and improvement of the firm by explaining some tools and techniques. It represents
about supply chain process of corporation including purchasing and physical distribution. Other
than this, it explains the use of quality management to improve quality of products in an
appropriate manner. It suggests many recommendations to improve overall functions of IKEA.
Brief information about organization
IKEA is the organization which manufactures various kinds of products like home
furnishing products like Sofa, beds, tables, chairs as well as other accessories to provide better
services to consumers across world. Furthermore, this company belongs to Korea. Enterprise
deals with various kinds of operations to increase its profit in the international market. In
addition to this, there are many competitors of IKEA such as British manufacture furniture
organization and other domestic firms which affect its sales in various countries. Furthermore,
corporation has expanded its operations in all potential global markets which aid to increase
market share and growth in different nations.
Furthermore, brand value of IKEA is effective in international market because
organization provides quality products to its consumers. Corporation uses effective promotional
strategies like social media, television as well as new papers to create better awareness regarding
new and existing products and services in the present sector. These activities help the IKEA to
increase its sales of products in the global market. In addition to this, organization also conducts
corporate social responsibilities (CSR) activities to create brand value and image in minds of
consumers in the international market (About our products. 2016).
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MAIN BODY
Operation strategy of IKEA
As per the present research, management of IKEA uses well defined operational
strategies which aid to manage its operations and activities in effectively. In addition to this,
organization divides it operations in different divisions like sales, purchase, quality,
manufacturing which provides reliability to handle its business activities. Furthermore, IKEA
designs its operation as per the need and requirements of consumers which helps in making
better furniture products at the workplace (Dey, Clegg and Bennett, 2010).
For procuring, corporation manages better relations with suppliers to buy better quality
raw materials which aid in managing manufacturing of furniture products effectively. It aids in
balancing supply and demand of furniture products in the market. It guides IKEA to make
appropriate business strategy to increase its sales of furniture.
For managing human resources, Management of IKEA also recruits and selects effective
human resources to improve its efficiency and performance in different operations. Along with
this, they allocate roles and responsibilities to staff members as per their interest area. This
activity aids the company to develop effective business strategy to increase its sales in the
present sector. This process aids the organisation to satisfy needs and requirements of consumers
in the market (Kloppenborg, 2011).
For managing Inventory, management of IKEA establishes many warehouses to store its
raw, semi finished and furnished material in a systematic manner. Further, this process aids the
organisation to keep smooth manufacturing operations by providing raw material at right time at
the workplace. Along with this, it aids IKEA to maintain its working efficiency which helps to
implement business strategy in the market.
For making better schedule, corporation conducts meeting with staff members and
managers at the workplace. This activity guides the management of the firm to make proper
annual schedule for manufacturing furniture products. It aids the organisation to execute its
manufacturing and other activities effectively. In addition to this, it supports IKEA to face
operation related issues by developing effective business strategies (Zwikael, 2009).
Other than this, for developing effective operational strategy, corporation also
emphasizes on location, process layout, design, reliability and maintenance quality management,
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product design elements. These activities aid the management of IKEA to improve its operations
effectively at the workplace.
On the other side, management of the corporation also change its operation strategies as
per the time on basis of various factors such as changing needs and requirements of consumers,
modern manufacturing methods as well as new technology in the market. This process aids the
management to make quality products by improving its operations effectively. Along with this, it
aids the company to increase efficiency and performance by fulfilling the desire and needs of
consumers (Bendoly, van Wezel and Bachrach, 2015). Further, it also helps IKEA to become
advance and manage its operations very fast as compare to previous years at the workplace. So
changing operational strategies according to time creates positive impact on organisation which
supports in increasing its profit in the market.
Product and service design of corporation
Generally, organization offers different types of furniture products like sofa, chairs,
customized products and other services to consumers in the market. In addition to this,
management of IKEA target furniture sector in an appropriate manner. This activity aids
the organization to provide better services to the consumers.
Challenge in product development
Furthermore, organization faces many issues regarding development of new furniture
products at the workplace. Sometimes, employees of IKEA do not understand needs and
requirements of consumers which produce issues to provide better services to service users in the
market. In addition to this, corporation faces issues regarding availability of raw material which
produces problems to make furniture products for consumers. This activity also increases the
waiting time of consumers in the market (Drake and Spinler, 2013).
How organization develops products
Generally, management of IKEA follows appropriate step to make furniture which
provides flexibility to manage its operations in an appropriate manner In addition to this,
organization includes suppliers, consumers as well as employees to make better furniture
products effectively (Hazlett, McAdam and Walker, 2013).
Product design process
For product designing, management of IKEA makes effective steps which are described
as follows.
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In these process, sales employees of organization ask needs of service users for manufacturing
of customized furniture products for them at the workplace. This process aids the company to
make better product for providing better satisfaction to the consumers. Then after, corporation
order raw material to its suppliers for initiating manufacturing process. In the next process,
management of the firm makes proper strategies to schedule production procedure with aid of
operational staff members which supports in delivering furniture products on time. This activity
aids the management of IKEA to manage its operations in an appropriate manner (Radnor and
Bateman, 2016). In next process, workers make furniture products as per the needs and
requirements of consumers at the workplace. Then after, organization gives delivery of furniture
products on time.
In addition to this, management of IKEA measures impact of design and new product
development by taking proper feedback from mobiles as well as emails of consumers. This
process contributes effectively for the organization to analyze its current performance in the
market. Further, it aids the firm to sort out their issues of consumers in properly. Furthermore, it
supports the IKEA to improve product development process as per comments of customers. It
aids the organization to make better relationship with consumers which supports in increasing
frequency of service users in the market (Sanders and Ganeshan, 2015). It contributes effectively
for the management of IKEA to increase its brand value and goodwill in front of consumers
which helps in increasing its profit in present sector of United Kingdom.
Process design of organization
There are many types of process design which can be used by IKEA to manage its
operations at the workplace.
Process design: Process design is one of important operational management decision
area which aids in designing and producing products and services in a better ways effective
manner. Further, There are various tools and techniques such as flow chart, process simulation
software as well as scale model which supports in developing the most suitable process design
for IKEA. Corporation requires to choose procedure for increasing manufacturing of the
company. Along with this, there are various kind of process designs like as job shop, batch,
continuous flow and line process (Burke, 2013). Process design contribute effectively to enhance
control and consistency in operation management division of IKEA which aids to achieve
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success of organisation. Further, it is one of the important decisions for enhancing operational
efficiency of organization.
Different types of process design are stated below in the points.
Job shop processing: In this process, it has rarely production lines in which management
of corporation make products as per needs and requirements of consumers which aids to satisfy
desire of them in the market. Currently, organisation uses Job shop processing to manufacture of
furniture products at the workplace. It aids the IKEA to fulfil the needs and desire of service
users in present sector.
Batch processing: in this process, management of corporation manufacture products in
certain quantity which is called batch. In addition to this, organisation can make same kind of
products in the batch (Goldense, 2015).
Continuous processing: In this procedure, one of product continuously is manufactured
at the workplace. This technique is suitable for that organisation which same commodities to sell
in the the market. In addition to this, it does not suitable for management of IKEA due to
different and dynamic need and requirements of consumers in the market.
Generally job shop processing is appropriate for management of corporation to complete
different requirements of consumers (Fullerton, Kennedy and Widener, 2013). On the other side,
it increases the and production time of organisation which leads waiting time of service users. So
to overcome the waiting time of customers, management of IKEA can also consider the batch
processing. This approach can aid the organisation to fulfil needs and requirements of consumers
very fast in the market. In addition to this, it can aid the corporation to increase its efficiency and
performance in a appropriate manner in the present sector. By considering Job shop and batch
processing design, firm can get better competitive advantages as comparison of its rivals in the
market. In addition to this, effective process design aids in increasing the overall production
process of IKEA.
Explaining planning and control of management of IKEA
For better planning and control, management of IKEA use consider various approaches to
manage its operations. In addition to this, corporation makes proper short and long term plan by
considering various factors like present trend, needs and requirements of consumers as well as
competitive strategies of rivals in the market (Goetsch and Davis, 2014). This process aids the
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IKEA to achieve its goals and objectives by proper implementation of proper short term and long
term planning in a appropriate time frame.
Generally demand of consumers are independent in the market. On the other side,
demand of raw material is also dependent on service user needs. This demand aids the
management of IKEA to manage its operations in a systematic manner. In addition to this, it
helps the organisation to plan and control business activities at the workplace (Rahani and al-
Ashraf, 2012).
Forecasting approaches
Along with this, management of corporation emphasize on both qualitative and
quantitative forecasting which contribute effectively to make better production plan by analysing
future sales with aid the forecasting approaches. Sometimes, inappropriate knowledge of market
create complexities for IKEA to forecast approximate sales in future which produce to manage
its manufacturing operations.
For better improvement, management of should select suitable forecasting approach like
time series method and exponential smoothing to forecast future sales in a appropriate manner.
This process can aid the management of IKEA to make better plan and control operations
effectively (Mukhtar and Sulaiman, 2013). In addition to this, it can help the organisation to
improve its results in terms of higher sales in the market.
Scheduling, loading and sequencing
Scheduling aids the organisation to establish both timing and use of resources at the
workplace. To complete demand of consumers, management of IKEA uses forward scheduling
in which employees selects a planned order release date and schedules all operations from this
point forward in time.
Loading explains about assigning jobs on the various machines in the work centers. It
aids the management of IKEA to reduce idle time during manufacturing of furniture products in
a appropriate manner. In addition to this, Finite loading shows actual start and stop times of each
job. It also considers the capacity and efficiency of each work center and evaluate the processing
time so that processing time does not exceed capacity (Ahi and Searcy, 2013). Further, in this
process, employees of IKEA load the job that has top priority for processing.
Sequencing can be defined as process in which organisation determines the order to
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access the jobs at the workplace. Generally, management of IKEA considers the critical ratio in
which manufacturing of jobs are sequenced as per priority which contribute effectively to meet
out needs and requirements of consumers. In addition to this, it also aids the organisation to
develop better plan and control activities effectively (Ashby, Leat and Hudson-Smith, 2012).
Generally, management of IKEA use many ways to cope with fluctuations in demands.
For this, management takes suggestion with market experts which aid to take appropriate steps to
reduce demand related issues. In addition to this, corporation considers forecasting method
which aids the to cope with fluctuations in demand. Further, there is also alternative ways in
which IKEA can consider economical factors which can aid the organisation to take appropriate
step for decreasing demand and supply related issues in a appropriate manner. Other than this,
firm can also consider market research to avoid demand related issues.
Technology can be used to support these activities which can aid the management of
IKEA to manage its operations (Fawcett, Ellram and Ogden, 2014). For example, corporation
can use project management tools and forecasting software which can aid to analyse handle its
operations effectively.
As per current research, there is adequate feedback and control process which aids the
organisation to take appropriate reviews from consumers. Further, it aids the IKEA to offer better
services to consumers regarding furniture products.
Innovation and improvement
Organization uses many ways to encourage innovation among the staff members at the
workplace. For this, management of IKEA analyse the needs and requirements of consumers,
evaluating competitive strategies and brain storming process and deep market analysis can
generate innovation in staff members which can aid to make better business strategies in a
appropriate manner. Furthermore, it can aid the IKEA to increase its productivity at the
workplace.
In addition to this, there are many tools and techniques for better improvement in
innovation which can aid to manage its operations effectively. Management of IKEA should
conduct environment analysis of furniture industry, training and development activities as well
as organisational audit which can aid to improve their operations more better (Monczka and
et.al., 2015). These activities can aid the organisation to improve its efficiency and performance
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effectively. In addition to this, they can help the IKEA to develop better furniture products
which aid to increase its profit in the market.
For better implementation, corporation can use PESTLE analysis, SWOT analysis and
porter five forces model for achieving better market information in a appropriate. In addition to
this, corporation has to make proper schedule for implementation of activities (Heagney, 2012).
Furthermore, IKEA has to manage human, technological and financial resource to execute
operations which can aid to execute its operations effectively.
As per current research, management of corporation follow Lean management to manage
its business activities at the workplace. Generally, lean management is a method which aid
organization to use concept of continuous improvement and long-term approach to perform
work. It aids the organization to achieve small and incremental changes which contribute
effectively to improve its efficiency and quality at the workplace. Along with this, management
of IKEA follow these activities to do changes which aid to meet out needs and requirements of
consumers according to present trend (Killen and et.al., 2012). This approach aids the
corporation to increase its sales and market share in present sector. Other than this, it support the
organisation to enhance profit as comparison of its competitors in the market.
Supply chain process of IKEA
Supply chain process of IEKA includes different activities to purchasing, physical
distribution and material management which can aid to manage its operations in appropriate
manner.
Purchasing of raw material: In this process, management of corporation purchase its
raw material from different suppliers by analysing different factors like quality of material,
service and cost of material. This process aid the IKEA to make better products in a appropriate
manner.
Processing: In this process, management of corporation process material to make
furniture products as per need and requirements of consumers. In addition to this, corporation
uses production and scheduling techniques to manage its manufacturing activities in a
appropriate manner. Then after, they make furnish products to sell the products (Pemsel and
Wiewiora, 2013).
Physical distribution: In this stage, management of corporation offer home delivery to
provide better facilities to consumers. For this, transportation vehicles like trucks to dispatch
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finished material to consumers. In addition to this, management of IKEA manages better
relationship to logistics organisation which contribute effectively to improve its service level and
efficiency in a appropriate manner.
Feed-back collection: It is also part of supply chain management of organisation which
aid to tale complaint and review regarding products in the market. Along with this, it aids the
organisation to sort out issue of consumers which aid to manage its operations in a appropriate.
In addition to this, it also aids the organisation to provide quality services to service users in the
present sector (Turner, 2014). In addition to this, these activities help the IKEA to increase its
services in a appropriate manner.
Generally, Information technology play important role for management of organisation to
improve supply chain process. For this better improvement, corporation can use SAP tool which
can aid to provide fast information regarding supply chain. In addition to this, it can aid the
organisation to take better decision for solving severe and other issues in a systematic manner. In
addition to this, SAP tool also aid the IKEA to provide better security by giving proper
information of raw or furnish material with tracking vehicle through global positioning system
(Chiu-Chi and et.al. 2013). Further, it aids the organisation to reduce probability of stealing
which can aid to make supply chain system more efficient.
For better improvement, management of IKEA should transportation theory,linear
programming and SAP supply chain module. These tools and techniques can aid the organisation
to reduce waiting time which can aid to provide better services to consumers in a appropriate
manner.
Quality management of corporation
Quality management aids the management of IKEA to improve overall quality of
furniture products in a appropriate manner.
Cost of quality
By using quality management, management of corporation can reduce its operational cost
at he workplace because it reduce probability of rework and warranty issues. In addition to this,
it can aid the organisation to decrease organisational expenses effectively. Furthermore, it helps
the IEKA to improve manufacturing speed very fast because systematic work reduce waiting
time during production of furniture (Dey, Clegg and Bennett, 2010). Hence quality management
aids the organisation to improve its productivity in appropriate manner.
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There are many ways to diagnose the quality issues during processing of products. For
this process, by using continuous monitoring techniques and comparing products parameters
with standard parameters, quality issues can be measured. This process can aid the organisation
to identify problems in furniture products at the workplace (Kloppenborg, 2011).
In addition to this, management of corporation can use different quality management
techniques like total quality management and continuous improvement tools which can aid to
improve quality of furniture products. In this process, by maintaining high standards, IKEA can
improve quality of products in a systematic manner. In addition to this, it can aid the organisation
to satisfy needs and requirements of consumers which can aid to reduce customer complaints and
issues regarding product at the workplace. Other than this, management of IKEA can use
continuous improvement techniques according to market which can aid to increase quality in
furniture products (Quality management techniques. 2015).
Along with this, management of IKEA posses with formal quality system in which
employees checks quality of raw material during initial phase. Furthermore, management of
corporation ensure quality parameters at each stage by comparing products with standard
parameters. This kind of formal system play important role for IKEA to reduce quality related
problems in furniture products.
Recommendations
There are many suggestions which can aid the organisation to improve its overall
operational strategies in a systematic manner.
 Management of corporation should use Enterprise resource planning to process fast
information which can aid to take better decision regarding manufacturing of furniture
products at the workplace. Other than this, IKEA should take regular updates in respect
of this software which can aid to avoid sever related issues.
 Corporation can should implement Consumer relationship management which can aid to
take its customer complaints and issues. It can aid the organisation to sort out every
problem by providing better services and solutions in the market. Furthermore, it can aid
the IKEA to make better relationship with service users.
 Management of IKEA should use Six sigma quality concept which can aid to increase
brand image and goodwill front of consumers in a appropriate manner. In addition, this
approach can aid the organisation to increase its sales and profit in the present sector.
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 Corporation should expand its business in developing countries which can to increase its
market share in international market.
 In addition to this, IKEA should conduct appropriate market research to know needs and
requirements of consumers in a regular time intervals. This process can aid the
organisation to take better competitive advantages as comparison of its competitors in the
market.
CONCLUSION
From the report, it is found that operational strategies, product and service design aids the
organisation to manage its operations to IKEA at the workplace. Furthermore, process design
and planning contribute effectively for organisation to make manufacturing strategies. In
addition to this innovation techniques aids the corporation to improve product design effectively.
It can be concluded that quality management techniques like total quality management and
continuous improvement aids the IKEA to reduce quality issues in furniture products.
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REFERENCES
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Rahani, A.R. and al-Ashraf, M., 2012. Production flow analysis through value stream mapping:
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