Comprehensive Analysis of Operation Management in IKEA (Report)

This report provides a comprehensive analysis of operation management within IKEA, a leading home furnishing retailer. It begins with an introduction to operation management and its significance for organizations, emphasizing its role in planning, organizing, controlling, and coordinating all activities. The report then delves into the importance of operation management in IKEA, focusing on quality management, control and coordination, and inventory control. The analysis further explores IKEA's operation functions, including designing, planning, managing, and coordinating, as well as the supply chain and packaging processes. A detailed examination of IKEA's process model is presented, covering environment, input, transformation systems, output, and monitoring and control, including lean management. The report also discusses the 'Three Es'—economy, efficiency, and effectiveness—and their impact on IKEA's operations. Overall, the report highlights how IKEA utilizes these strategies to achieve its goals and improve its performance in the market. The content covers key aspects of operation management within IKEA, including process models, Three Es, and key functions.

Operation Management in
Business

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK1.............................................................................................................................................4
1.1 Operations management is important for organization....................................................4
1.2 Operation function of a organization & M1.....................................................................5
1.3 Process model of organizations management...................................................................7
TASK 2............................................................................................................................................9
2.1 Importance of Three Es'...................................................................................................9
2.2 Cost minimisation and quality maximization in organization & M2...............................9
2.3 Five performance objectives...........................................................................................10
TASK 3..........................................................................................................................................11
3.1 Adding value to a given production process through linear programming....................11
3.2 Critical path analysis and network planning..................................................................11
3.3 Need for operational planning and control in a selected production process.................12
TASK 4..........................................................................................................................................12
4.1 Operational outcome for a organization.........................................................................12
4.2 Network plan indicating the end point critical path.......................................................13
4.3 Quality management techniques.....................................................................................14
CONCLUSION..............................................................................................................................15

INTRODUCTION
Operation management is a field of that can manage the whole process of goods an
service which can provided to the customers and it include planning, organising, controlling and
coordinating of all activity of IKEA (Trkman, 2010). It is management function which manage
people, information and equipment that is produce product in business. It can convert resources
into goods and service in effective manner. Basically operation management id focus on the
process of business that can evaluate performance of business activity. It is essential function to
every organization to manage their process in effective manner. Operation management is
effective process to manage operation function in organization with marketing, financing and
human resources. In IKEA it can be determine the effective strategy that can help in define day
by day production of goods and service which is provided to their customers to fulfil their needs
and wants and get higher satisfaction by them. It can also improve effectiveness and efficiency in
business to get appropriate result. This report is based on IKEA company it is home furnishing
retailer which offer good range of well designed products to their customers. The vision of IKEA
to make a healthier life everyday for people. In the below mentioned report involved process
method and Three Es' to IKEA to get effective result (Tang and Musa, 2011).
TASK1
1.1 Operations management is important for organization
In every organization the operation management is play vital role that can help to identify
whole process and manage all activity of a business entity that can help to improve company
performance as well as profitability in marketplace. It is a effective process to determine roles
and responsibility of manage of the company. Basically it is based on the purpose of the
organization and focus on production of goods in an enterprise. In IKEA organization
management is important to develop activity as well as policy in effective manner to improve
their performance (Slack, Chambers and Johnston, 2010). It is a fundamental part of the
organization that is define the term of information to converted into input and output. In
organization there are some importance of operation management that can help to achieve
effective target:
Quality management- in IKEA is is a very important factor which can define effective quality
of product and service that can help to improve customers satisfaction and increase profitability.

Product and service is important to every organization run effectively to improve their customers
taste. In quality management the benchmarking and re engineering is essential to improve market
share so that the organization can produce best product for their customers.
Management control and coordinating- In IKEA operation can define the goals and objective
and effective range of activity that is used in business. Control and coordination is more
important in every business to run their business effectively and get appropriate result that can
improve the product quality with the help of manufacturing, evaluation, distribution and sales
activity which is helpful in developing product and service of IKEA (Slack, 2015).
Inventory control management- It is most n very important to IKFA in operation management
that can help to control inventory in best manner because product and inventory is essential to
grow their business activity. Effective inventory control IKEA include innovative method, which
is just in time inventory control that is more effective factor to save cost and develop product in
market as well as customers mind quickly.
So that the operation management process is very important to develop every activity of
business which is used to increase their performance level in appropriate manner and also define
effective goals and objectives of IKEA (Pettit, Fiksel and Croxton, 2010).
1.2 Operation function of a organization & M1
In IKFA the operation function is fundamental process which can define production of
product that are produce according to customers needs and wants. Operation function is a
process of managing various processes like selling, buying,storing and financing. It is show the
combination of output and input that can help to increase productivity and profitability in
appropriate manner. In IKEA there are important key function of operation management:
Designing- In operation function of organization the designing is start to improvement of
production that is sold in market. Production process evaluated by the customers expectation
regarding the particular product. According to the designing process the organizationmaintain lay
out with effective and best facilities in order to attract their customers (Pettit, Fiksel and Croxton,
2010). The system to design information is important to improve company performance with the
help of effective controlling and monitoring process.
Planning- operation function is based on best planning system that is manage al resources and
describe that how company utilized available product. Planning is a effective process to define
all various element which used in business to increase the demand of the product and service

(Myers, 2013). To get best result and set effective target the planning is very important to
implement in organization that can help to achieve effective target and positive result which is
more important to tally their business in marketplace. The IKEA company prepare plan to apply
their process and activity so that they can attain to their target.
Managing- The IKEA is manage their team in effective manner because with team management
they cant attain success. Team work is important to every business to improver their
performance. IKEA can manage their employee in impressive way and also motivating and
training them to do work properly so that they can attain higher success in operation. According
to managing process the IKEA can manage all the various action such as financial, marketing,
human resources activity of the business which is effective to enhance their performance level in
appropriate way (Lavastre, Gunasekaran and Spalanzani, 2012).
Coordinating- IKEA is largest company in market it can coordinate all things in another work
that can coordinate between roles and responsibility of the operation management that can help
to improve performance of the employee in effective manner. Every organization have
coordination which is essential to enhance their goodwill in marketplace. It also coordinate with
all employees in business so that they ca work easily with team members (Wheelen and Hunger,
2011).
Supply chain: In organization the operation management have define best supply chain of
materials which assist in production process in long time. It also include in business process to
minimize the cost of the production.
Packaging: It is very important process of organization which can attract large number of
customers. With the help of packaging designing IKEA invite more customers to buy its
products.
Maintaining warehouse: In operation management it assist in maintain warehouse then they can
easily supply the products to its customers.

1.3 Process model of organizations management
There are operation management process model which is used by the IKEA to define
effective process if running their business in appropriate manner:
Environment- in the process model of operation management in IKEA the first step is
environment that can define the effective environment in business organization to develop their
activity in appropriate manner to achieve better result. In this environment process it can be
include customers, suppliers, competitors, regulation , economy and technology that can set
effective assessment to develop dynamics which can change the management condition in
positive way (Yang, Hong and Modi, 2011). In IKEA the customers is important to increase
selling process and the company can identify customers needs and wants. Suppliers is most
important in business supply their product in market as well as customers to fulfil their demand.
The company also find out competitors and policies that is used by the competitor which is
impact on their business. So that IKEA set their own policy to increase productivity in
marketplace. Regulation is more important to every business with can help to solve legal
problem and run their business smoothly. Economy is more impart on business so that the

business set their product price according to economy situation which is help to increase
profitably and the last element of environment the technology is innovative to the operation
management so that they can produce effective product to their customers (Kindström, 2010).
Input- after environment process the next process is input which include capital, material,
equipment, facilities, lobar, knowledge and time which is essential to evaluate the input in
process model that can use to describing the all information in IKEA. Basically the input process
is also known as principle resources that is used in business to develop their performance in
effective manner to implement to achieve their predetermine target. It is a continuous process to
understanding and define business performance in appropriate manner. Operation management
process define the whole activity of the IKEA.
Transformation system- after defining input process of operation management IKEA involve
transformation system. It is a industrial program which include engineering and also show link
between programming language. It is management system to achieve bold goals and objectives
that can involve alteration transportation, storage and inspection of business activity to improve
productivity of IKEA.
Output- it is include goods and service of IKEA that can be evaluate systematic process top
manufacturing product according to customers demand. IKEA define output process after sale
service which is provide to their customers and get higher satisfaction by them.
Monitoring and control- last process of operation management process is monitoring and
control that is evaluate whole process in IKEA that can help to achieve effective goals and
objective to improve their performance in appropriate manner (Karlsson, 2016).
Lean management: in organization it is a systematic approach to develop the business activities
in continuous basis. It is effective concept which is define continues improvement and achieve
best goals in appropriate time period. It assist in increase the quality efficiency to achieve long
term goals and objectives. It focus on best optimize asses and financial term of the business.
Advantage of lean management:
 It assist in improving customers service.
 It can improve the quality of the products and also improve the productivity.
 It assist in reducing the wastage in the production process.
Disadvantage of lean management:
 Lack of proper it system is one of the main disadvantage of lean management.

 They have high cost of implementation.
 Lean management highly depend on the suppliers.
TASK 2
2.1 Importance of Three Es'
In IKEA the Three Es' is more significant in operation management that can define more
flexibility in business. Every business can focus on long term strategies to improve their all over
performance in marketplace. In market three Es' is not easy to achieve in business it is complex
but it can define powerful allegiance to provide effective quality and right cost of innovation that
can help to increase service and goods which is provided to their customers to get satisfaction by
them. In business organization they include Three Es' which is more important to IKEA:
Economy- in IKEA it is related to the financial process because current time the economy is
impact on every aspect so that it can be define the effective use of available resources of in
organization to achieve the appropriate goals and objective in effective cost. In every business
financial term like money is a type or resources which is evolute by the company according to
needs and demand of the customers. Economy factors more important to develop business
performance and increase their productivity.
Efficiency- in other hand the efficiency is a process to complete the organizational task which
can reduce uncertainty. When company improve the efficiency of the work then the company
can reducing wastes of same product. It is not measurable in amount but it can use in
establishing a task in effective manner. Efficiency is effective factor top improve best quality of
product in market to achieve good result.
Effectiveness- it is basically focus on the achievement of goals and objectives. It can be include
good performance which can help to set the effective objectives in business that can help to
enhance their activity to attain success in market (Holsapple, 2013).
2.2 Cost minimisation and quality maximization in organization & M2
Cost minimization- in IKEA the cost minimization is a financial strategy that can help to achieve
effective cost which delivering goods and service according to requirement. Cost maximization
in not reducing the quality of the product and service it is more effective to identify the
customers needs. Reducing in cost in effective manner it can be evaluate maximum profit in
IKEA. Cost minimization can involve some effective step so that the company can reduce cost

by avoiding duplication, determine process and activity of cost production, negotiation of pricing
with suppliers, include benefits for employees and employer. Cost minimization is effective to
customers to buy their product easily at law price.
Quality maximization- the main aim of IKEA to maximize the profit in appropriate manner.
Quality maximization a effective process to define profitability it can define the primary
objectives of business to take effective decision regarding the enterprise to develop their
performance as well as goodwill. Best quality of the product can reduce uncertainty in business
process that can evaluate effective result to enhance customers needs and wants which can
increase profitability as well as productivity in market (Heizer, 2016).
2.3 Five performance objectives
IKEA include five performance objective which is evaluate the quality of the product and
service:
Quality- in IKEA the quality is essential to set the objectives. Effective quality is based on the
durability of the product which can provide to their customers tom fulfil their needs and wants.
Best quality can attract their customers in large number.
Speed- IKEA define speed that can define the response which is related to external and internal
customers regarding product and service. External speed is helpful to respond quickly and
positively to customers. In other hand the internal speed can reduce cost of production that can
help to less the uncertainty in business.
Dependability- basically it means being on time that can define that customers can attaining
product and service on time. It is a effective objectives which can evaluate customers needs and
wants that is based on the good and effective service to provide their customers. IKEA define
dependability to reduce cost with the help of saving time, saving money and improve efficiency
in appropriate manner.
Flexibility- more effective and important objective of IKEA is maintain flexibility in market. So
that company can manufacture product in different level of quality that can help to modify their
product . Flexibility is important to meet success in market and improve value of product.
Cost- IKEA set good and effective cost to customers that can cover all manufacture process. In
organization the cost is very effective process to determine the value of the product which is
purchase by customers to increases company sales and profitability (Hart and Dowell, 2011).

TASK 3
3.1 Adding value to a given production process through linear programming
In IKEA the linear programming is a metamathematical process which is define
maximum and minimum production process which can achieve best and effective outcome. It is
model which is used to find out a process which helps in achieving maximum production outputs
with minimum costs. It is a systematic method which is used by the manager of IKEA that can
define production process and reducing cost of production so that they can take good decision
regarding product and also increase profitability in business. Basically the linear programming is
used in evaluate effective process that can improve quality of the production level and take
decision regarding the process of the production.
3.2 Critical path analysis and network planning
Critical path- IKEA define critical path that can show the lowest time to done activity in business
entity. It is a effective process that can evaluate lesser time to complete business project in
effective manner as known as critical path. It is longest situation of activity which it can help to
manage business project in appropriate manner. It is very important to every business to done
their project in better way (Gold, Seuring and Beske, 2010).
Network planning- it is a systematic techniques which is helpful in planning and controlling of
business project that is interrelated activity. IKEA define network planning that can evaluate the
problems in better manner. It is a diagram that can show the effective result in business process
to complete business project that can help to reducing uncertainty. There are some advantage and
disadvantage of critical path analysis:
Advantage-
 It assist in decision making process of the organization.
 It also assist in time and cost saving.
Disadvantage-
 It is time consuming process.
 It is not based on statistical analysis.

3.3 Need for operational planning and control in a selected production process
In IKEA there are effective need to control and planning of operational management that
can help to reduce uncertainty:
Cost reduction- effective production planning process can reduce the cost of product that can
help to improve the quality of product and service which is provide to their customers IKEA
include effective process that can help to reduce cost or particular product according to
customers demand.
Maximising profit- in IKEA production planning is more effective process that can evaluate and
control activity which is create hurdle in business and enhance the quality of product so that they
can maximize profitability level in business entity to improve their performance(Gawer, 2011).
Increase efficiency- IKEA maintain better efficiency in their process to reduce uncertainty. In
operation management the production planning can improve efficiency with the help of mark
best plan and implement in business in appropriate manner so that they can increase profit as
well as efficiency.
Allocation of resources: Production planing play vital role in allocation of resources. Which
assist in production cycle in order to increase efficiency.
Meeting the demand: Planning and control is more effective process to fulfil customers needs
and wants in appropriate time period.
Reduction in wastage: In every organization best and proper planning is very important to
reduce the wastage of the resources.
TASK 4
4.1 Operational outcome for a organization
IKEA define some operational outcome to evaluate effectivenesses in business entity:
Increasing in profit- IKEA define effective process to evaluate appropriate strategies that can
evaluate profitability in best way and also determine the effectiveness and efficiency in business
entity. In operation management the IKEA set and identify more desirable process to increase
business profitability level to improve performance and goodwill in marketplace (Diabat and
Govindan, 2011).

Reducing in cost- organization can be involve effective process to reducing cost with the help of
production process so that the IKEA can reduce their product cost to increase selling activity in
market.
Achievement of the desired target- IKEA set achievable target in business entity so that they can
attain effective success in market and also increase market share.
Customers satisfaction- it is important to IKEA to provide effective goods and service according
to their needs and wants so that they can achieve higher customers satisfaction which is improve
performance of the company. Customers is god to every organization so that IKEA introduce
best product to their customers to get satisfaction by them.
Production management: It is an essential for every organization to planning, organizing,
directing and controlling of the production process in effective manner. It is a effective process
to covert the raw materiel in finished goods. It deals with decision making process of quality,
quantity and cost of production. The main and important objective of production management is
manufacture best quality of goods and service to the customers. It assist in achieving
organisation goals and objectives.
4.2 Network plan indicating the end point critical path

Critical path= 1+3+5+7+8+9+11= 44
Maximum time= 2+4+6+7+8+10+11= 48
Minimum time= 1+3+5+7+8+9+11= 44
4.3 Quality management techniques
In operation management there are different techniques which is used in IKEA to
improve quality of production as well as performance of company: Cost benefits analysis, Cost
quality, Basic quality tools, Benchmarking, Design of experiments, Statical sampling, Additional
quality planning tools and meeting. IKEA include two techniques in their process to improve
their quality of product and service (de Menezes, Wood and Gelade, 2010).
Benchmarking- it is a effective techniques in IKEA to measure the quality of the products
which can evaluate the standard of company. It can be improve company performance as well as
profitability in appropriate manner. It can show current position of enterprise and also identify
the areas and cost id production and quality of the product. Benchmarking is define internal
opportunity of business to enhance their performance (Ageron, Gunasekaran and Spalanzani,
2012).
Cost quality- it is a effective techniques which is used by the IKEA to evaluate the organization
product and service. It can be show the improvements effort in business process to develop poor
quality of production.
Purchase process- It is very important process for production management. It also define best
decision which is taken by the organization about to raw material of production. It is better
process of purchasing of raw material which assist in producing the quality furnitures of IKEA.

Six Sigma- It is a set of tool which assist in improvement of business organization process is
called as six sigma. It is used by the organization in order to improve quality of products.
CONCLUSION
In above mentioned report is based on the operation management process which is
include process model of business and also evaluate three Es',quality maximization and cost
minimisation that can help to increase profitability in business. This report is also include critical
path, network planning to get effective process and develop their performance in appropriate
manner.