Comprehensive Analysis of IKEA's Operations Management Strategies

This report provides a comprehensive analysis of IKEA's operations management, examining its importance, functions, and process models. It delves into the significance of the "Three Es" (Economy, Efficiency, and Effectiveness) and the impact of balancing cost minimization with quality maximization. The report further explores the application of linear programming, critical path analysis, and network planning within IKEA's operational framework. It also outlines defined operational outcomes and the application of quality management techniques to improve operations. The analysis covers various aspects, from designing and planning to managing and coordinating operations, providing insights into IKEA's strategies for achieving efficiency and success in the furniture retail industry.

OPREATION
MANAGEMENT IN
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Importance of operation management for IKEA..................................................................1
1.2 Analysis of operational function of IKEA............................................................................2
1.3 Process model in operation management for IKEA..............................................................3
TASK 2............................................................................................................................................4
2.1 The importance of “Three Es”.............................................................................................4
2.2 Impact of tension between the cost minimisation and quality maximisation in IKEA.........5
2.3 Significance of five performance objectives which underpin the operations management in
IKEA...........................................................................................................................................5
TASK 3............................................................................................................................................6
3.1 Ways by Linear programming adds value to the production process...................................6
3.2 Critical path analysis and network planning.........................................................................7
3.3 Needs of the operational planning and control using in IKEA.............................................7
TASK 4............................................................................................................................................8
4.1 Set of defined operational outcomes for IKEA.....................................................................8
4.2 Network plan which indicate the resultant critical path........................................................8
4.3 Justification of how quality management techniques is been applied to improve the
operational in IKEA..................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Operations management is a part of the management system in an organisation where the more
concern is done upon designing and controlling of all the functions that are performed at
production level of products and services. It is an essential element in the organisation as because
it helps in performing the activities and operations of producing the products of transformation of
raw materials into finished goods and services (Boycott and Shantanu kumar2014). Every
organisation now a days are very effectively performing this management approach, it is
assisting them to attain the set standards and objectives. Therefore, it is the most important
aspects of business in current market scenario.
IKEA is the company which is very effectively carrying out its functions of furnitures
retailing in the nation, hence the operations activities are very important for the organisation. In
this report the different functions and aspects of operation's management of the sited firm will be
studying and the positive impact of them in functioning of the company will be discussed.
TASK 1
1.1 Importance of operation management for IKEA.
Operation management is essential as it is the important part in organisation as that helps
in controlling systems of an working. It mainly allot with an design and operations, and the
development of the structure which make and provide IKEA products and services. Working
management is an area which is having the responsibility to make sure about the day to day
working systems are been considered. IKEA is an retailers of furnitures, in this firm operation
management is very essential area of the companies activities which they perform. They use this
system in their organisation to protect and assist all the things with effectively and efficiently. In
firm efficiency is been used so that it would know about how good resources and many more
things are used this would give them the idea of all the things going in on the daily basis
(Casadesus-Masanell and Ricart,2010). IKEA use to cut down the cost by reducing the projects
which are little low profitable to them. It is an condition in which the firm effectively bring off
their objectives to become an market head by using the minimum resources to get maximum of
outputs. To have an proper measurement of effectiveness and efficiency will conduct to have

productivity, production and many more, this would help them in having an good control over
the operational activities which are performing in day to day life.
1.2 and M1 Analysis of operational function of IKEA.
In firm an day to day function is an process which is been done in an fundamental
manner it helps in having production of things by them according to the needs and wants of the
customers. Functioning of operations are an process of adjusting different kinds process those are
like selling, buying, storing products and financing. It usually shows the collection of results and
data entered this could help to make high productivity and profitability in correct way. In this
company there are some essential function of operation management:
Designing- In an operation function it is been start to make an proper development of making of
products which is sold in an market place (de Menezes and et. al 2010). Some of the production
process which is been made by the some of the customers which are required about the
individual product. In an designing process the company continue design with effective facilities
that can engage their customers in large number. The system to make an proper information is
essential to make betterment of their companies way of doing things by the appropriate
controlling and monitoring all the performance of their day to day activities.
Planning- it use to be depended on the good activity of the planning system which are been
managed and all of that are describe on the information of of what an firm has to plan about the
products which are they going to produce. it is an process which is made do work in an proper
manner which define various kinds of ways which are used in organisation so that they could
increase their products and service. To have an best amount it has to be targeted and for that
planning is very essential to do in organization which will make proper effective to target as well
as positive result which is more essential to tally their business in market. The IKEA industry
make effective plan to apply their process and activity in appropriate manner so that they can
reach easily to their target.
Managing- they use to make very much of managing ways so that they could make proper
management in the firm which would help them in having process so that they could be able to
achieve success (Ebert and et.al., 2014). Team work is important in business to make proper
improvement in their performance. IKEA can manage employee which are working over their to
make improvement in an impressive way and they should give proper motivation and training so
that they could do work properly and that will make them achieve proper success in work. In

managing process they could manage all the different activity like financial, marketing, human
resources activity which is important to business which will better to increase their performance
level in better way.
Coordinating- it is an big company in market it can manage things to do the other work that can
make proper control all roles and responsibility of operation management which will help them
in improving their performance of the employee in better manner. In every organization the
having proper control is important to increase their goodwill and also coordinate with all
employees in firm which would make them do their work in an proper way.
1.3 and D1 Process model in operation management for IKEA.

These are the process model in operations management this will help the firm in getting the
proper process which will help them in knowing the ways in which they have to do their work in
an proper manner so that they could make process in an best way which will make them do their
work perform better and this give them the guidance in an correct manner. In this the firm has to
firstly analyse the environment of the firm which will make them know about it the environment
then that have to be input in it then all the process will start so that firm could get the proper
output which will make them help.
Input:- The information is the main stage in process display where the contributions of the
generation procedure are distributed. The information sources are the crude materials of IKEA
which incorporates woods, cement and apparatuses and hardware to finish the coveted item. The
operation administration helps in portion of these contributions inside the time allotment with
least cost. Alongside the crude materials land and works are likewise the factor which is required
for viable creation.
Conversion:- The change organize is next after phase of information. At this stage accessible
asset are assembled keeping in mind the end goal to start the generation procedure. In the
accompanying stage the transformation of essential crude materials are changed over by works
and specialists in the generation line by the utilization of apparatus. The operation administration
of IKEA helps in change process by encircling employment outline and creation procedure to
accomplish craved outcomes.
Monitor:- This is a phase where the operation administrators watch out for the transformation
procedure of crude material into complete item. The operation administration checks whether the
generation cycles is performing altogether or not. For the situation where transformation arrange
is not up to the check operational administration gets the information of spillage however
observing and helps in killing the accompanying.
Output:- The yield is the last phase of the creation procedure in which the last completed item is
prepared for taking care of up the demand of the clients. The operation administration helps in
leading these procedure demonstrate altogether and accomplishing the coveted result. The
operation administration is just factor which helps in keeping up the base cost for the yield in
IKEA a furniture business.

TASK 2
2.1 The importance of “Three Es”
The three Es are very important concept in operations of an organisation. It has to be very
effectively considered by the firm to perform in appropriate and proper manner. This is the
approach which is used to measures all the performance of the company and it will also help in
identifying strengths and weaknesses of the firm.
1. Economy- It means that operations has to be done effectively but also considering much
money are not invested (Heizer, 2016). The wastages have to be avoided by the company
so that company can be able to cut down the cost that has been incurred unnecessarily.
There are different measures through which company can manage its cost. Many times
company offers services which are not much effective but still they provides to the
customers so as to reduce cost of it.
2. Efficiency- It is the way of performing actions in smooth and ease manner. It is very
necessary for IKEA to carry out its operations in efficient manner as because it will lead a
firm towards its attainment of goals and objectives. This will also create an image of the
company in market. To be very efficient many strategies and plans has to be made by top
level management team of the company which help in sustaining and growing the
competitive market.
3. Effectiveness- It is the third approach which means to carrying out all the activities and
operations in such a manner that will help in reaching to the end of the project assigned.
Company with use of various activities and appropriate decisions has compete and
exceeded its competitors in the market (Jacobs, Chase and Chase, 2010).
2.2 and M2 Impact of tension between the cost minimisation and quality maximisation in IKEA.
It is essential for an organisation to have minimum cost which will help them in get good
profit amount, and they should maximise the quality of the products and services which they
provide to their customers so that consumer of the products could get proper quality materials
which will make them more satisfied. Before minimizing cost their should be an proper plan be
there as minimisation of the cost without planning would be very much risky for the
organisation. IKEA took proper plan to cut down the price without making the economy harm by
reducing the unprofitable and less profitable projects (Krajewski, Ritzman and Malhotra, 2013).

This would help the organisation in having proper saving of the money from the amount without
making an affect on the whole profit of firm. With an adoption of an good activities which is
been done to do an promotional activities an by adopting an risk of opening their more outlets of
many other locations would help them in achieve more sells as more customers would come to
their different stores if they have store at other locations and this would help them in getting
more revenues. And this is economical power had been helped them in making their quality get
better. When the quality which is been provided by any of the producer it would influences and
attract more people towards them in more quantity.
2.3 and D2 Significance of five performance objectives which underpin the operations
management in IKEA.
Performance objective is an part by which an firm can know how they are performing on
day basis and does that is good for them. And according to that they ave to make plan so that
they could do more better performance. Following are five objectives which underpin the
operations management:
 Performance Objective 1: Reduction cost- Strategy of cost reduction which is used by
IKEA is made them lead their firm to get an proper economical strength. For
minimisation cost of their products they have been cut down the unprofitable projects
which made them get good profitable projects which is helpful to them in getting profits,
and that had made better opportunity for them to earn profit.
 Performance Objectives 2: Digitalization- It is essential for the company to do changes
according to the changing of the world they have to cop up with the required changes in
any of the things which would lead the organisation towards the success. As the
increasing craze and trend of digitalization they also made online website were people
can see their products at home and even they could buy that so it also made them achieve
success in an better manner and this increased their profit rates more.
 Performance Objectives 3: Reaching more customers- It is important to reach people
which will help them in getting proper achievement in their firm. They has to try to open
more and more stores in different locations which would help them to reach to new
customers which will increase their sale (O'Brien and Marakas, 2016). If the stores will
be in different places then it will be easy for people to go over their stores which are near

to them. This make good impact on increasing of profitability, they can get new
customers group.
 Performance Objectives 4: Promotional campaign- If an firm requires to be known by
more people then they have to do promotional activities which would help them in
attracting more people. They can do the promotional activities by using many techniques
like having banner of their firm, doing ads, and many more.
 Performance Objectives 5: Focusing on efficiency- they have to do their work in an
proper efficiency so that they would make proper use of the strategies to get an
achievement.
TASK 3
3.1 and M3 Ways by Linear programming adds value to the production process.
Linear programming is an mathematical process which is been made to get an proper help
to the management in having the proper making of decisions. This been also had used in the
management of science as well as the engineering industries as they have to make day to day
solutions in an mathematical way which would help them in getting the actual methods to do the
things better, this is the best tool to be used (Slack and et. Al 2010). And the linear programming
is an most essential part for management so that they could make proper decisions. And this
would also provide an best aid to have an minimum cost and maximum of profit. With the help
of linear programming the managers can make an appropriate calculation of the prices and units
of sales which would make the profit of the firm become maximum. In an organisation many
problems would appear so the linear programming can provide help in taking proper decisions.
The business units and costs can be controlled by the administrators with the utilization of direct
programming to expand benefits of IKEA. The straight programming causes administration to
decide and wipe out the issue make in the cost and costs of items fundamentally.
There are sure favourable circumstances and disservices of direct programming which is
depicted as takes after:
Advantages:- Linear writing computer programs is exceptionally basic and straightforward and is
finished by utilizing accessible assets. Fathoms numerous assorted and consolidated issues. It is
more versatile and adaptable in recognizing issues. Backings in giving great quality choices.

Disadvantages:- It works with just with the straight factors. It doesn't bolster in comprehending
non straight capacities. Can't comprehend issues which have at least two factors. It don't consider
variable changes and assessment.
3.2 Critical path analysis and network planning.
Critical path analysis is an project management tool which uses the network analysis to
make an proper help to the project managers so that they could be able to handle and hard and
time consuming operations. Critical path analysis is use to:
 It provides help to the firm to make out the all particular activities which makes an large
projects.
 It gives the way to the organisation so that they could know that in which order an
activities has to be done.
 This also shows that which all activities are to be ruined and which have to be choose and
the other activity has to be completed at what time.
 This provides the proper time that which activity would took what time so they have to
make proper plans and take appropriate actions to make the project complete on the
proper time.
 It shows that when and what resources are been needed at the particular period of time so
that they would make manage their work in an proper time (Toth and Vigo, 2014).
Critical path analysis is the tool which is used in making plans and managing the projects, is
IKEA would use this tool then it would help them knowing about the project so that could aid
them in completing their projects in an proper time and they could know about the resources that
which are more effective for them to make use in their projects, and mainly it usually depends on
the perfection of the information which is been used in that.
3.3 Needs of the operational planning and control using in IKEA.
After setting up of the operational system which is been prosperously made and
implemented to do an real use of it, but then also it is essential to have an proper planning and
controlling of the operational needs. The decisions which have to be made should be done in an
short term basis, so that it can be changed according to time and situations, it should be like
month to month, day to day and it can also be hour to hour so that the system which is in the firm
can been planned properly and could control it in an appropriate manner (Trkman, 2010). The
operational planning and controlling of an decision can be involved in the doing proper

controlling scheduling of labours, capital and materials so that they could make required quality
products and quantity which is to be produce in an efficient manner. Planning and controlling of
operations is required for IKEA to make an future forecasting which is been demanded. But after
doing the future forecasting it is not important that they could met the required operation system
for that they have to make proper system and should have the good capacity in changing it. At
this time of operational system shorter term of managerial decisions should be done so that they
could make an proper implementation of the systems to meet the capacity so that they could
achieve the demand.
The operational arranging and controlling of a choice can be associated with the doing
appropriate controlling planning of works, capital and materials so they could make required
quality items and amount which is to be create in a proficient way. Arranging and controlling of
operations is required for IKEA to make a future estimating which is been requested. In any case,
in the wake of doing the future anticipating it is not imperative that they could met the required
operation framework for that they need to make legitimate framework and ought to have the
great limit in evolving it. Right now of operational framework shorter term of administrative
choices ought to be done as such that they could make a legitimate usage of the frameworks to
meet the limit so they could accomplish the request.
TASK 4
4.1 Set of defined operational outcomes for IKEA.
Operational outcomes of an innovative marketing techniques, they should focus on some of the
techniques which are: Attracting more number of customers- when they came to know that competitors of there
is focusing on them at that time they have to make appropriate techniques so that they
could compete with their competitors. They should make more outlets of their store so
that they make good selling and can attract more customers. This would make them
achieve more amount of customers towards them so that they can gain the profit. Attract teenage customers- It is important to attract teenage customers so that they could
make proper selling process and for that they have to make very innovative promotional
activities so that they could make attract the teenagers in numbers then their competitors.

This would help in getting the more customers which are teenagers (Wheelen and
Hunger, 2011).
 Making the products easily available- if they would increase their numbers of store in the
different locations then they would be able to connect with the more customers so that
will make increase their selling quantity. If their product will be easily avail to the
customers them it would help the organisation to get more profit with the more
customers.
4.2 and D3 Network plan which indicate the resultant critical path.
` Critical path and network plan
A 1+3+5+7+8+9+11= 44
B 1+3+5+7+8+10+11= 45
The work can be completed in less time that is 44 by using the path A