Operations Management Report: Resource Management at IKEA

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This report provides a comprehensive analysis of IKEA's operations management, focusing on resource allocation, risk assessment, and strategic planning. Task 3 explores resource allotment programs, evaluating the Resource Based View (RBV) and VRIO model to identify valuable, rare, inimitable, and organized resources. The report examines resource allocation plans, including financial, employee, and technological resources, and evaluates the benefits and drawbacks of various resource management schemes. Task 4 delves into risk management through a Strategic Risk Assessment (SRA), contingency planning, and the relationship between stakeholders and risk. The report also defines McKinsey's model and its application within IKEA, demonstrating how it supports the organization in achieving its goals. Techniques such as Just-in-Time and Total Quality Management are discussed to minimize costs and improve efficiency. This report offers valuable insights into operational strategies, resource management, and risk mitigation within a global organization like IKEA.
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PRINCIPLES OF OPERATIONS
MANAGEMENT
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Table of Contents
Introduction .....................................................................................................................................3
TASK 3 ...........................................................................................................................................3
1P7 create a resource allotment program to meet special operational necessitate for an
company.................................................................................................................................3
2M3 Evaluate and utilise the most suitable scheme in assistance of the resource allotment
programme..............................................................................................................................5
3Resource Based View and VRIO model..............................................................................5
4VRIO Model.........................................................................................................................5
5D2 Analyse the benefits and drawbacks of various resource management scheme in the
meaning of rising activity flow and outcomes.......................................................................8
6 Definition of McKinsey's model and its postulation in IKEA and about the mode that how
will they support the organisation in accomplishing their aims and target..........................8
TASK 4............................................................................................................................................9
1P8 Contrive and conduct an SRA of an company using risk identification and mapping.. .9
2M4 Create eventuality program and scheme to decrease the peril highlighted in the SRA. 9
3D3 Give the reasoned Explanation for suggested schemes at an functional, tactical and
strategic level........................................................................................................................12
4Relationship between many shareholder and threat...........................................................12
CONCLUSION..............................................................................................................................12
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Introduction
Operations management is an orbit of direction obsessed with designing and managing
the activity of manufacture and redesigning organisation transactions in the manufacture of
products and services . Operations management is generally use to control and analysis the
functions of the organisation. IKEA is a international corporation that produce and trade ready-
to- collect furniture, kitchen gadgets and domestic auxiliary, among other and some others
products that is useful for home services. IKEA organisation established in Sweden in 1943 by
Ingvar Kamprad, IKEA has been the global largest furniture merchandiser since 2008. This
report shows the applicable and suitable origin for operations management, the several planning
of management of materials. It also justify several models that could be choose by the individual
company in order to raise its operational functions and activities. Several modular and reference
points are also declare in order to maintain the risk factor in the organisation. The report also
explain the kinship between the many shareholders of the organisation and risk(Gold and
Schleper, 2017)
TASK 3
P7 create a resource allotment program to meet special operational necessitate for an company.
Resource management explained as the procedure of applying the sources and material
gettable with the company in a productively and expeditiously way. Manufacture natural
resources, individuals acquirement, stock list, financial materials, earthy and IT origins could be
mentioned as illustrations. Resource management is an essential feature in operations
administration as it render an summary of the individuals that are include in a specific task of the
organisation and create the procedure of designing and speculate scheme limpid. It also assist in
to distinguishing issues and maintaining them on a particular time period. Resources is
management is the method to provide great and high production and output from the
manufacture. There are some resources that is very essential for the organisation. Several
scheme of resource administration are defined below -
Processing a strategic breakdown framework For the organisation it doesn't concern for them
that what kind of business and organisation they have , every business take time for making
the breakdown framework of strategies for that will help the company to line up all its aims
and objectives and measure them(Kandampully, Zhang and Jaakkola, 2018) . Developing a
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strategic breakdown framework help IKEA organisation to calculate its outcomes and
modify their strategies and plans accordingly. This framework also support the enterprise
by directing its activities.
Preparation for uncertainties In the organisation sometimes certain cases and opportunities
are rises at the terminal point that cases might be needed help and support and can airs as a
demand. These challenges and situations can weaken the accomplished activity and efforts
of the company suddenly. So, for that moment the enterprise should keep definite resources
as a substitute for these situations.
Proceeds the time to gathering task requirements: Taking the content and information about the
task Before it create a mass between the group and for doing a task support to the team to
plan and maintain the strategies according to project. For the best outcomes IKEA
company should concentrate on the end goal of the task that a company want to complete
and goals are: budget , task objectives and poetics of success, applicable points and
juncture , learning outcomes , principles, primal competitors and formulation.
Create your precedence methodology: There are various methods to prioritize the task
according to aims and objectives of the organisation, opportunities and threats, budget,
competitors. It is very good way for IKEA to prioritize their work and consider them .
Modification is difficult : In the organisation any modification is creating by the IKEA then
they have to maintain their requirements and needs and the mindset of the employees
accordingly because modification is very hard to accept. So , there are some tips that is
explained to steer the change procedure:
Communication: Define the changes and modification according to the employees . Do not
explained entire modification at one time tell the employees that these task are done
differently(Sheng, 2018).
Model: Create a particular structure for prioritize the work and allocation of resources.
Benefits of resources management: Enhance perceptibility into group member employment of
the IKEA.
Much capable to create changes on the fly
Enhance task uncertainties consciousness
Built engagement spirit of IKEA.
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Resources Planning: In resources planning a company can identify the essential
resources for the task . Prediction the resources involve considering what and if script. This
would be assuring the precedence and timelines that affect the structure. When they commute the
resources according to the planning then it will help them to obviate moving budgets, conflicts ,
and the behaviour of the team(Bell and Harrison, 2018).
Resource allocation plan
Resources Cost Problems Impact Outcomes
Financial
resources
$20000 Changing market
situations
It will assist IKEA in
improving their
management &
structures.
New
opportunities
in market will
be accessed
easily.
Employees $35000 High demands IKEA turn over rate
is increasing due to
low employee pay
wages.
Allocating
employees
with higher
wages results
in better
productivity.
Technology &
information
system
$48000 Advance technology
but low skilled
employees
Adopting of updated
technology results in
dealing with uncertain
situations effectively.
Technology
and
information
system is will
increase the
effectiveness
of brand
strategy.
Other
operations
resources
$10000 Political issues These resources
affects at moderate
level within business.
Using of
these
resources will
help
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organisation in
achieving of
objectives.
From above paragraph, resource allocation plan has been implemented which depicts that
planning is needed so that every resource is allocated within their proper place.
M3 Evaluate and utilise the most suitable scheme in assistance of the resource allotment
programme
Resource Based View and VRIO model
Resources based view model is used to achieve agonistic rewards. According to this
approach it is very sustainable to feat outer opportunities using existing materials and sources in
a fresh method instead of trying to take new knowledge for every contrasting opportunities.
Resources based model is helping the company IKEA to achieve their objectives and goals and
also support them to develop more growth. There are two kind of resources that is tangible and
intangible.
Tangible resources: Tangible resources are the physical holding that can be touch by the
individuals just like land, buildings ,equipments and some more. Tangible resources are easily
available in the market and purchase by the person. so they consult midget rewards to the
organisations in the extended run because challenger can shortly assume the same resources.
Intangible resources: Intangible resources has no physical availability but still can be
purchase by the individuals and the organisation just like trademark, patents , reputation ,
services and some more. Brand reputation and some more intangible resources improved over a
huge period and it is not possible for the other companies to opt this reputation and other
services. Resource Based View is a model that acknowledge the particular elements for the
system to acquire broad execution. The strategy explain that a assets within an system showing
concept of this model so, it will alter it in increasing a agonistic rewards,carry on in a emulous
surroundings.
VRIO Model
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Resources Valuable Rare Inimitable Organised
Products Yes - - -
Financial Sources Yes Yes - -
Employees Yes Yes Yes Yes
Patents Yes Yes Yes Yes
Valuable – It advert the sources that support the system to achieve its aim and objectives. The
several precious origin for IKEA are defined below -
Products : Products are more precious because its support the company to pull in consumers and
make earnings.
Financial Sources : Financial sources supply finances for carrying out different states in IKEA
and these activities of the company carried out with fine-textured.
Employees : Employees are valuable because they support the company in accomplish its
objectives and targets for more growth and for the reputation of the company
Patents : Patents is much precious resource because its support in making a grace for the
organisation in the industry(Pride, Ferrell and Casidy, 2017).
Rare – Rare resources are those that support a organisation in increasing agonistic rewards
against competitors in the industry. There are definite assets that is not rare for IKEA, like
furniture, products because there are some other competitors in the trade market who
offering same products as IKEA. There are some more resources that is rare for the
company or not.
Financial Sources : IKEA has very good financial origins that support the company to
accomplish the orientation of a market mortal in the Sweden market.
Employees : The IKEA organisation has employees that are honest and potential and also
extremely skilled and knowledgeable , that is why they are rare for the company.
Patents : IKEA has patents that are limited for their goods and technology which form these
patents as rare.
Inimitable – Inimitable resources are those resources that cannot be copied by anyone they are
unique. But in IKEA company products can be imitated by any other company because they
use common material and resources for creating furniture .
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Financial sources: financial sources could be copied anytime either lawfully or unlawfully.
Employees : Employees are inimitable they can not be copied by anyone they are unique
because every employees has different skills and knowledge that are controlled by the
employees of IKEA and theses skills and knowledge might be not present in the employees
of other organisations.
Patents : These are inimitable because they are legally registered by the government and they are
unique no can can copied the patents of the IKEA company(Greene,2018).
Organised – Products: products are not organised in the IKEA company as well as financial
sources are also not organised according to the company.
Patents and employees : Patents and employees are organised for the company because they have
to regenerate its patents frequently in order to assure that the other companies do not imitate
the similar.
Mentation of these techniques Lean, Just-in-time ,Total Quality Management techniques and
how these techniques support the company to minimise values in IKEA company
IKEA company used many techniques for maintaining their business operation. There are some
techniques that are mentioned below:
Just in time : This technique is much administrative which is configured to raise skilfulness,
minimise values and destroy waste by exploit products and facilities exclusive when they
required. Usage of the scheme in IKEA going to support them to destruct waste in their
company to assist its dealings and whole potency of organisation . It has a amount of profit
and welfare in the organisation such as it has tiny infinite for in correctness and also support
companies to trait and find the solution of their issues with satisfaction of orders.
For example, IKEA should supply a broad prime and quality of goods and services that will fulfil
the consumers desires and requirement. It will gradually leads to gain in functional ratio and
efficiency and that is why, outcomes of hope in bringing period and Just in time can be
utilized to cut down wastes so the advanced quality of goods can be formulated with
ablated cost operations.
Total quality management: This techniques is trenchant conceptualisation for the direction of
whole company. Leading target of the method is , raise the attribute and qualities of
outcomes and also products and services by substance of constant transformation of inside
operations. This could be acquired in several organisation for assuring the attribute and
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qualities of goods and service(Shahivandi, 2017). For example, TQM can be applied in
IKEA for cut down enterprise mistake, Expenditure of the dealings will gradually minimise
the proportion of faults flexure. It support the organisation in constant transformation and
improvement of operations.
D2 Analyse the benefits and drawbacks of various resource management scheme in the meaning
of rising activity flow and outcomes.
Definition of McKinsey's model and its postulation in IKEA and about the mode that how will
they support the organisation in accomplishing their aims and target.
This is the structure for potency of company that speculate them. there are many assorted
internal component within an system which are essential to assembled and raise,straight for
attainment of organisation .Seven components are construction, method, scheme, skills, style,
staff and shared. These component beliefs plays very essential character in achieving mark ,aims
and objectives. IKEA McKinsey's framework influence relation between seven inside
component of company in order to raise whole ratios and efficiency. According to this structure,
an organisation normally have squeezable and sticky and strong components along with mutual
beliefs which create a leading effect on worker execution and behaviour. Strong and tough
components of IKEA consider its cost leadership scheme(Szelągowski, 2017). Organisational
composition of IKEA is stratified which belongs to several secular of management which
support them to present and innovate escaped flowing of knowledge that will gradually support
the organisation to accomplish aims and objectives. In order to preserve their functions, IKEA
reckon on a broad scope of group and method. Steering wheel execution management scheme is
the perfect judgement example for heighten performance of organisation and resources. fresh
management procedure has been track by their managers and administrators of the company that
create a plans for modifying structure of company in order to accomplish marked and pointed
aims and objectives. This structure can be utilized in some company for checking the potency of
business functions. It analysis how to conform and adapt an company for encouraging a new
strategies.
Cost Benefit model
This theory defined the procedure that modify the company , determine several method,
judgement and some more. The theory is formulated and distinguishing the different profits and
costs connected with pickings an activity .it is used to analyse the decision. This managers or
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leader add the profit of the condition and activities then less the cost that is related with gaining
that activity. IKEA can trust on the cost benefit structure as it will give and supply a observation
of the condition that is being assess. Before taking the new projects and task managers direct the
cost benefit model. This structure asses all the expected cost and locale that a organisation might
be create from the task. The result of the investigation will identify that this task is financially
sustainable or not. Cost benefit model can also consider abstract profit and costs and impacts
from a judgement such as worker morale and consumer gratification(Karatza, 2019).
TASK 4
P8 Contrive and conduct an SRA of an company using risk identification and mapping
Standards and Benchmarks for Managing Risk
ISO 31000 is a standard that was printed multinationally in the year 2009 and gives
many, several guidance and rule and laws for maintaining risk Potentially . The modular outlines
for generic concept to maintaining risk and can be formulate to various variety of risks like
program, safety and fiscal risks and can be utilised by any organisation. The standard give rules
and laws and guidance that support the company to initiate a opinion of its risk management
procedure fault-finding. The standard is cut up into 4 stages that is distinguishing the risk,
examine, assessing and treating it. This standard did not give any detailed information and needs
on how to maintain a particular risk and also did not provide any guidance that is related to
particular area.
The risk management procedure defined in the ISO 31000 standard involve the following
activities that is
Risk Determination: it used to analysis the uncertainties and find the opportunities that will help
IKEA to achieve their goals and objectives.
Risk investigation: identifying the consequence and uncertainties of the given project and
analyse that how to overcome these uncertainties.
Risk evaluation: by analysing the uncertainties they identify that this risk is bearable or not for
the company.
Risk Handling: modify the ratio and probability of the consequence that is might be positive and
might be negative to achieve its benefits(Yadav, Mzittal and Jain, 2018).
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Communication and conference : This standard support investors problems and issues to identify
the uncertainties management procedure is concentrating on the correct component.
Risk assessment matrix is important concept which is needed to be used so that risk are
mapped as well as identified in proper manner. So, in case of IKEA this framework is further
discussed as follows-
Risk Matrix- Impact
Minor Moderate Major Critical
Technical risk Financial risk Operational risk Market risk
Strategic risk Operational risk Financial risk Operational risk
Financial risk Operational risk Technical risk Strategy risk
Likelihood
Technical risk- 10-20%
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