IKEA: Principles of Operation Management, Resource Allocation Report

This report provides a detailed analysis of IKEA's operations management, focusing on resource allocation and strategic risk assessment (SRA). It begins with an introduction to operations management principles, emphasizing the importance of efficient resource utilization. The report then delves into t...Read More

Principles of Operation
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
P7. Preparation of resource allocation for organisation...............................................................1
M3. Applying most appropriate strategies from resource allocation plan...................................4
D2. Advantages and disadvantages of Management strategies...................................................5
TASK 4............................................................................................................................................5
P8. Determining the SRA of company .......................................................................................5
M4. Analysing of contingency plan to minimise the risk............................................................7
D3. Justification and recommendations of strategies..................................................................8
CONCLUSION................................................................................................................................8
.....................................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Operation management is strategy to to use best business practices that facilitates in
proper achievement of resources and maintain the efficiency and effectiveness in business
organisation (Elahi and Ilyas, 2019). Principles of operation engagement that must be followed
and applied by operations manager and this presented by Randall Schaeffer. In this report the
company is IKEA is multinational company that design and sells ready to assemble furniture,
kitchen appliances and home accessories and become world's largest furniture retailer. It is
founded in Sweden in 1943 and it provide home services apart from that and its known for its
modern design. In this report prepared resource allocation plan to meet the needs of operational
requirement and applying the strategies in resources allocation plan. Apart from that it is conduct
to SRA and analysing the risk identification and risk mapping has been identified . Other than
that contingency plan and strategies to minimise the risk and provide valid justification for
recommendations strategies at operational, tactical and strategic level in related to company.
TASK 2
P7. Preparation of resource allocation for organisation
Proper allocation of allocation is very crucial and at the same time important for company
to assigning and scheduling resources to project task in order to ensure effective functions and
activities (Heizer, Render and Munson, 2017). They are counted in essential decision where they
responsible for carrying out the whole project and task and every operation manager trying to
achieve the accomplishment of task. To maintain the proper allocation manger formulate
effective steps and procedure that helps and facilitates the manager to perform the task
effectively. Following are the steps that were performed to proper allocation of resources-
 Dividing of project into task- In this step manger divided the project into different
task according to their similar nature or characteristics, so that they can function
together due to same work procedure. It become necessary to analyse each project
behaviour and it activities that will ensure proper functioning and procedure to enhance
overall productivity (Holweg and et.al., 2018). In IKEA company they usually deals in
furniture and kitchen appliances and popular for its modern approach in furniture
retailer, so company is need to make separate segments of task that will reduce the
time, efforts and money and become easy for manger to execute the task. Like in

purchasing the raw material and other necessary requirements of inputs puts under
same task, so that worker able to perform it together not differently.
 Assigning the resources- After dividing similar project, each task require the resources
to carry out further. In some task they require less human resources and other work they
need it more. There are some useful resources in organisation such as Labour,
Equipment, Materials, Facilitates and Miscellaneous (Juliani and de Oliveira, 2020).
So, there is need to allocate these resources effectively. In the context of IKEA they
allocate according to necessity such as Labour required in each task and project and
asset for every organisation, Equipment involves tools and other equipment that used to
produce and this is very essential resource for this company as every thing depends on
tools and equipment as they will use in every process because in manufacturing the
furniture and other appliances this are main resources in this. Material are final product
that comes after and right availability is confirmed. Facilities are comes in which
process and whole task is carried out such as Buildings, Work areas and factories where
they require to maintain project schedule and budget to ensure they ready for project
team. Miscellaneous include the project financing, insurance cost, performance
bonding, administration and many other expenses that are necessary to complete the
task.
 Resource attribute- Each resources needs to satisfy some grade, specification and
level to carry the task and able to accomplish it effectively. Many resources needs a
specific level of technical issues and need to match the level of output and sufficiently
carry out the project work (Kristensen, Mosgaard and Remmen, 2020). In the company
IKEA some attribute are there such as Grade, skills, quality, resource specific and
availability. In Grade it refers to technical specification that each resource must have
such as efficient factories to carry their process and effectively manufacture its products
and should be adequate for the task. Skills is similar to grade but refers to human
resources that how effectively they perform the task and maintain the quality in output
they produced and the way they use their skills and knowledge in their work. Quality
concern with how it could be better than others and it is not similar to grade, they
concern with using the same resources and producing it in low cost and must be
effective in real use by costumer. As in identifying the quality in furniture and other

appliances, it easy to determine the difference between poor quality and good quality.
So, it become necessary for company to focus on this step in order to sustain in market.
Other than that resource specification is size, shape length, speed, colour and many
more that define its specific functions (Mishakov and et.al., 2018). Availability refers to
timely availability to required resources on time and ensure the resource calender that
will be useful in arranging employees vacations and sophisticated material tracking
software.
 Resource Levelling- This refers to create the resources as smooth a possible and
maintaining the level of specification in order to proper utilisation of available
resources. This could be done through Gantt charts and network diagram where they
effectively determine the nature of each task and analyse the time needed to complete it
(Mogos, Fredriksson and Alfnes, 2019). To ensure that they assigned the resource that
incur less cost and give major output to organisation. In IKEA they are maintaining the
resources in very appropriate way and for they implement some techniques to
inspecting the resources that are smooth and effectively used in process to maintain the
efficiency of process.
 Re- allocate the resources- Many times it happens they are need to re-allocate the
same resources when they is scarcity and at the same time they ned in other process, so
operation manger re-use the resources and maintaining the effectiveness. Many tims it
happens when they required to change the schedule or budget for them from shifting
the resources to other projects. Like in IKEA they could sometime transfer their human
resources to other task where they required it urgently and need more workers there to
complete the task. It is necessary to do when situation come to transfer the available
resources.
 Tracking utilisation of rates- This is last step in allocation of resources where they
track the whole resources and its uses in process that how effectively they have used.
Some times it happens that resources were idle in last process for so long period of time
and losses its utility at last (Möller and et.al., 2018). So, manager needs to determine
utilisation rate of each resource to determining the proper uses of them, so that they
could effectively used in each task. In the company IKEA operation manger is uses this
step as they ensure every resource must continue optimum utilisation of resources to

reduce the cost and maximise its profit. As this is big organisation, so its manger needs
to examine the each task and process in their manufacturing and it is quite critical as
well it is become crucial to determine the utility of each resources.
Resource allocation plan
Resources Requirements Task Start date End date
Experience staff  To acquire
that it is
important
that they
were able
to fulfil
the
demands
and
requireme
nts of
company
effectively
.
 They need
to be
properly
trained to
deliver the
best
customer
services to
its
customer.
 To fulfil
this task
company
need to
recruit
experience
staff and
conduct
proper
selection
method to
ensure
better
process.
 To
provide
training
and
developm
ent
programm
es and
gives
monetary
benefit so
that they
5 February, 2021 10 April, 2021

can
accomplis
h the task.
M3. Applying most appropriate strategies from resource allocation plan
To allocate the resources it become necessary to come with the strategy and developing
appropriate plan for resource allocation. It is essential task for operation manger to operate each
task and activities according to the planned steps and procedure. Company could adopt the
effective strategies and tactics to ensure the proper allocation of resource that also leads to
effective productivity in organisation. Some strategies that need to implement are-
 Do not over-allocate- This strategy refers to re- allocation of same resources and over
allocation of them tends to poor planning and inefficiency in skills and knowledge that
lead to wastage of resources and increase cost for organisation. This should keep in mind
to ensure every time that they do not decrease the uses of it. Some of the main resources
are very precious and valuable in nature and their uses needs to be done appropriately. If
over uses of resources has happened than it will be unfair for whole organisation and it
will tarnish the morale and quality in project task (Ortikmirzaevich, 2017). IKEA must
use this strategies in resource allocation plan and will be helpful and enhance the
productivity in every operations process. As, every resources is essential and important
for every company, as this firm is popular and famous and require certain methods and
timely strategies to overlook whole plan to reduce the risk of uncertainty and hike in loss
in company.
 Using appropriate tools- This strategy is concern with using the right and effective tools
and software to manage resources more productively. This tools could be software,
physical tools that facilitates the manager to oversee the proper allocation of resources.
Some software are Projectmanger. com and project and resources management software
these are helps in get the data instantly updated and can see where our resources are
allocated according to the calender that tells the where they are on or off- task (Prinsloo,
Dobson and Mammoli, 2018). In IKEA it essential to use these tools and software as they
are very big organisation so it will be useful for to use them, as they have large
operational activities and huge resources that need to manage effectively.

D2. Advantages and disadvantages of Management strategies
In every strategies there are some benefits and limitation that every individual needs to be
concern while implementing this strategies (Roda and Macchi, 2016). Some advantages of do not
allocate the resources are it manages to deal with every operation process easily and reduce the
wastage of resources and helps in knowing the quality in process and minimising the overuse of
any resources. It helps in improving work flow and increase in production process.
Disadvantages of this resources is it is difficult to identify each resources and its efficiency in
task and maintaining the report of each task.
The advantages of using appropriate tools is they are helps in improving the efficiency
and effectiveness of operation process as it facilitates in providing software tools that helps in
knowing the record of each task. It helps in enhancing the productivity and increasing in the
output of organisation. Disadvantages are it needs proper knowledge and skills to implement
them as not everyone could operate this software. As, many employees do not know the proper
uses and sometimes fails to handle complex situation.
TASK 4
P8. Determining the SRA of company
To identify the process of identifying and examine the issues in organisation, that could
be related to operation and workforce related. It involve the assessing the IT security threats such
as accidents, ransomware and natural disaster and other uncertainty during business operations.
To identify risk identification process some steps are-
 Risk identification- It refers to purpose of risk identification is disclose what, how and
why and the way it could affect the company' ability to operate. Like in IKEA it could be
unavailability of raw material and skills human resources could be risk factor for
company.
 Risk analysis- This include finding out probability that risk might occur and its impact
on business operation. In the context of IKEA they could determine the how much the
risk can impact the organisation and how long.
 Risk evaluation- This refers to identification of each risk magnitude and its
consequences. For company this refers to if that risk occur than how long it will be and
what will be its outcome and accordingly rank them on higher one.

 Risk treatment- This refers to how manger can use different methods and techniques to
minimise the risk and prevent it risk. It involves dealing with the risk effectively and
appropriately and it involves certain methods and techniques (Slack and Brandon-Jones,
2018). In IKEA it could done with certain software and tactics to handle the issues and
risk problem.
 Risk monitoring- This process refer to ongoing steps that adapts and changes over time.
Repeating of this step is necessary and assure maximum coverage and unwanted risk. In
IKEA this step will ensure that every steps conducted accordingly and improve in overall
productivity and business operational activities.
Mapping the risk analysis is essential helps in gaining the mapping exercise and devote the time
and resources in gaining the benefit (Nuykina, 2020). Some of the steps are as follows-
 Identification of gaps- This refers to determining the process and where to begin and
what are good starting points. This process allow for mapping the cause of problem and
eliminating the intentional issues and problem solving exercise.
 Assemble efficient team- Every process is determined by the people who worked there
and responsible for work allocated to them. Right person at right place is essential in
every process whether it is at lower and upper level.
 Defining mapping objective- It refers to analysing the start and end point of every
mapping process and finding out the reason and dictates the level it put.
 Gather data- In processing of map it also important to use good techniques to gather the
data and maintaining the efficiency of process like interview, observations, documents. It
helps in during the steps and facilitates in proper functioning.
 Construct and validate maps- It refers to building and construct the techniques such as
Triangulate results, perform a walk through it include explaining to everyone.
 Summarizing the findings- It refers to measure the effectiveness and efficiency of
process and check whether they are meeting with requirement or not.
 Implement process- It is last step after conducting every step where they evaluate the
results and monitor its consequences and at last roll out new process.
Strategic risk analysis is process that aims to identify and manage the potential problems that
could impact the initiatives or project. It helps in identifying the business strategy and objective
and executing in proper manner. Some of its steps involve-

 Identifying the strategies- It is refers to several framework that involve the SWOT
analysis of company to determined the steps and balance the risk. In IKEA it is essential
in identifying the failure and address the risk that will be related to certain planning stage.
 Establish the key performance indicators- This refers to assuming analysis scenario or
Monte-Carlo simulation to assess the effectiveness and uncertainty of company strategic
objectives. IKEA could use certain KPIs such as Severity of risks, Cost incurred due to
risk, frequency of risks and many other to check the performance and improve it.
 Identified risks that helps in performance- It refers to identifying the unknown factors
that drives into accelerate the productivity (Wakeman and Langham Jr, 2018). In IKEA
they could identify the factor they will going to increase the future customer demands
such as what are way through which could improve their growth and success in long
term. For example evaluating the needs and wants of costumer and current trend in
market related to home décor and modernisation of furniture.
 Establishing KRIs to tolerate risk factor- In this it refers to implementing the key risk
indicators that useful in forward looking leading indicators. That helps in future events to
solve the risk and maintaining the efficiency in productivity. IKEA should use to figure
out future risk and to minimising it at right time.
 Reporting and monitoring- Company can monitor results and take reports on daily basis
to grasp the opportunity as they rise through KRIs on continuous basis. IKEA must
include this step to monitor and facilitates the proper process and take effective action to
control it in future events and ensure effective operational management.
Risk Measure
carried out
Severity Responsibilit
y
Consequences Areas
affected
Changing in
the customer
taste
This risk can
be measure
through
observing the
changing in
the behaviour
of customer.
This risk is
moderate and
that could
easily be
monitor.
The need to be
done properly
and it is big
responsibility
for the
organisation
that has to be
This create the
problem for
the company
as it reduces
their
profitability
and efficiency.
This has
affected the
marketing and
finance
department.
As changing in
the behaviour

carried
effectively.
This will
lower down
the image of
organisation as
reduces the
brand image in
the eyes of
customers.
will impact the
overall
organisation
and its
profitability.
M4. Analysing of contingency plan to minimise the risk
Contingency plan is important to make a plan that is essential for business operation to
minimise the risk. This plan varies from situation and type of organisation where they continue
to other process also. There are three steps in following manner-
 Assess the risk- Before coming with the conclusion it is necessary to identify the
potential of risk faced by organisation. First it require to identify the critical functions and
identify the risk in which could be Natural Disasters, Product issues and Supplier issues
and team issues. After that prioritize the risk that which risk is more important and most
eventfully occurred and the impact on the organisation. Ikea could also develop this in
order to maintaining the efficiency.
 Creating Contingency plan- It refers to determine the precondition and specify the each
stage of this plan. After that identify the needs of stakeholder up front and creating it. It
can be useful to test the plan and stimulating the triggering and the perform dry in
detailed plan.
 Maintain contingency plan- After making the plan it is important to monitor, regulate it
on continuous basis to avoid the unwanted future circumstances. It should be like
planning it and forget the existence of it (Tokar and Swink, 2019). It require to maintain
the way a system works, organisation structure, new product in market and new risk that
emerged and technology.

D3. Justification and recommendations of strategies
This strategy is being used as this us defective one and provide the most useful outcome
if minimising the risk because this strategies include all detailed process and techniques that
could be use. It first states to assess the risk and identification of its nature and then creating
proper contingency plan that specify each process and after it monitoring and regulating this plan
come where it ensure proper execution of strategies.
CONCLUSION
From the above report it is concluded in Operation management is strategy that aim to
helps in managing the whole business process and ensure the highest level of efficiency that will
be possible within organisation. In this report it has been studied about resource allocation of
plan in company and evaluating the most appropriate strategies that will be helpful and effective
and discussed its advantages and disadvantages of management strategies that will be helpful in
work flow and outputs. Apart from that analysing the risk identification and mapping the risk and
accordingly carry out SRA and identification of contingency plan to minimise the risk and
provide the justification of using of strategies.

REFERENCES
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