Operational Management Strategies for Ikea: A Comprehensive Analysis

This report examines the operational management practices of Ikea, a leading furniture company. It begins by identifying operational challenges, such as product wastage and defects, and then outlines the company's current operational processes, including assessing customer needs, ordering raw materials, production, product testing, and final product delivery. The report then introduces and compares relevant operational theories like Crosby's Theory, Joseph Juran's Theory, and the Standardization and Adaptation Model, highlighting their relevance to Ikea's challenges. It compares these theories with Ikea's existing processes, pinpointing areas where the company's practices diverge from the best practices. Finally, the report suggests potential changes to improve product quality, recommending modifications to processes such as raw material ordering, product testing frequency, and worker training, to better align with operational theories and address the identified problems. The report aims to provide actionable insights for enhancing Ikea's operational efficiency and effectiveness.

Operation
Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1. Introduction to problem and explanation of processes............................................................3
2. Brief description of two or three relevant operation theories..................................................5
3. Comparing the theory with the process ..................................................................................6
4. Considering how potential changes would improve quality of Ikea product .........................7
5. Recommendations....................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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ILLUSTRATION INDEX
Illustration 1: Process Map .............................................................................................................5
Illustration 2: Revised process map...............................................................................................11
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INTRODUCTION
Management of operations expeditiously and effectively consider as the key success
component for any of the organization. Accordingly, it presume a significant importance within
the overall industry also as with the proper operations organization can directly enhance their
performance (Stuart and et.al., 2002). Effectual planning and functional management is a pivotal
factor for sanctioning the company to run smoothly in the pursuit of attaining organizational
objectives efficiently and effectively. In the assigning unit, importance of operational
management has been explained within the context of chosen organization that is Ikea one of the
leading furniture company in the UK that deals in providing quality furniture products to the
different customers and clients. The report will also identifies the problem that is associated with
the organization and it also addresses the process map that company basically follows. For
improving the processes according to the requirement necessary recommendations has also been
also provided.
1. Introduction to problem and explanation of processes
Ikea one of the leading global furniture company that specialize their operational services
in retailing the home furnishing products to the customers such as ready to assemble furniture,
accessories within the home such as curtains, sofas etc. the product portfolio Ikea company
mainly features around 12,000 furniture products thus it is no doubt that company need to ensure
large scale furniture operations for enabling the success of company within furniture industry
(Kleindorfer, Singhal and Wassenhove, 2005). With the increasing demand of new and modern
furnishing items and furniture products Ikea company is engaging in the operational procedure.
Thus it outcome in arising some operational problems related with the wastage of products and
increasing defects in the furniture products. Moreover, with the introduction of standardized
furniture products company focuses on manufacturing and selling the similar products in the
different market. Therefore, this results in increasing the operational issues related with
designing the furniture products. As, the standardized products are not accepted in the new
market that Ikea is capturing. Operational functions of Ikea furniture company mainly
incorporate of different elements such as designing, organizing, guiding, monitoring and
controlling. All these functions must be followed in the consecutive order inside the business
procedure so that they can deliver the quality output (Mahadevan, 2010). Despite of using the
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sequential process within the Ikea furniture company there are these problem and issue that
arises and results in diminishing the whole image of organization.
Therefore, the company is engaged in the operational processes that mainly includes
certain stages that outcome in producing quality furniture. The traditional operational processes
that is used by Ikea furniture retailer company include following steps such as-
 Assessing the needs and demands of the customers: The foremost step in the operational
process of Ikea company is assessing the changing needs and demands of the customers.
The demand of customers keeps on changing with the changes in furniture design and
demand of new form of furnishing item in the market (Kamauff, 2009). Therefore, to
avoid the supply of standardized and similar furniture products in the new markets. The
operational manager of Ikea company need to measure the demand and requirement of
customers so that they can produce the required furniture item for the customers. For
instance, standardized furniture are mostly not accepted in the countries like China and
India as there is different needs and requirement of customers.
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Illustration 1: Process Map

 Making order for Raw Material: After assessing the demand and requirement of the
customers operational manager will acquire the adequate raw material for producing the
furniture product. Ikea company mainly design their furnishing items and furniture
products in Sweden (Prajogo, 2007). There are different suppliers from whom company
acquire the raw material that is wood so that they can engage in the production process
for attaining the desired outcome. The company do not acquire limited raw material
instead they purchase the bulk raw material that sometime leads to the wastage. In order
to meet the requirement of new customers operational manager would make order for raw
material according to the requirement so that they can meet the customized requirement
of customers.
 Production process: Another step in the operational process of Ikea include production
process under which company is engage in the process that assist in transforming
imputed raw material into the desired outcome that is in form of furniture (Prajogo and
Sohal, 2006). In addition to this, the company also engage in manufacturing process from
different countries as manufacturing from the developing countries keep their production
cost down. Another step is production process under which operational manager would
ensure set up of production process in different region so that they can easily manufacture
the customized furniture products according to the need and requirement of customers to
minimize the operational issue.
 Product testing: After completing the production process the produced product is being
tested so that any defect in the furniture product can be easily identified. The basic
purpose of enabling the product testing within the Ikea production process is to review
that the activity that is executed inside the organization is according to the process framed
or not (Becker and Scholl, 2006). After the production process of the customized
furniture products the final product is being tested. It would support the management or
other testing department in reducing rejections, wastages of products and thus, it also
ensure quality within each unit of ultimate end product.
 Final outcome of product: After testing the product the last step is that final output is
ready to be sold to the ultimate customers.
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2. Brief description of two or three relevant operation theories
There are number of operation theories examined which can be used by manager of Ikea
with an aim to resolve the condition which is affecting the operation of enterprise. The detailed
explanation about the same is being depicted in below: Crosby's Theory: It is being consider as another quality management theory which gives
priority to fourteen different type of aspects. These are also being consider as principles
of quality management. Herein, one of the principle of theory entails that firm should
form quality management team (Forza, 2002). The main work of this team is to make
sure that whether production operation of corporation like Ikea is carrying out in
accordance with set operation or not. Hence, given team tend to play very effectual role
in the task of changing their operation of manufacturing the product as per the needs and
demands of buyers. In addition to this, another principle of cited theory entail that firm
should train the supervisor of company. (Ageron, Gunasekaran and Spalanzani, 2012).
Herein, the manager of Ikea should train its employees about the ways to meet the needs
and demands of different customers who belongs to varied countries. It is through this
way only operation issue which is occurring due to varying furniture related need of
buyers can be resolved. Joseph Juran's Theory: It is also known as quality trilogy which is basically based on
three different elements such as quality planning, improvement and control. This theory
entail about number of steps which help in ensuring that high quality of goods and
services is being produced by firm. This step also ensure that needs of all firm's
customers should be fulfilled in an effectual way. The step starts with awareness of
opportunities or need for improvement, improving goal, giving training to worker,
initializing project, reviewing project, recognizing performance and finally reporting on
results. For instance, by using these given steps manager of cited firm can formulate
effective steps for addressing the issue related with the company's operation. Herein, in
training and development phase, cited firm manager can give training to its workers
regarding manner they should change their function production function. This will enable
enterprise with regard to fulfill the needs of all its buyers in an effectual manner.
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 Standardization and adaptation model: It is the most effective model for Ikea as it helps
in resolving the company problem in an efficient manner. In this context, it has been
examined that for resolving the above mentioned operational problem, cited firm
manager should use this model. In this context, it should change design of its furniture as
per the need and demand of local buyers. For example, the furniture which is being
demanded by Indian customers varies from the US buyers. Thus, Ikea should use this
model with an aim to address the needs and demands of its buyers. Through this way,
overall benefit can be gained by enterprise in the form of increased profit and sales in an
effectual way.
3. Comparing the theory with the process
The theories of operation management is compared with product production process of
Ikea. Herein, it is examined that Ikea is going through with different type of operational
problems such as defects in product and huge wastage of resources. These problems are causing
direct effect on the sales and profits of company. In this context, it is assessed that the product
production process of Ikea starts with assessing the need and demands of buyers. Herein, at first
manager of firm tend to examine the demands of buyers and accordingly it should make the
production of goods and services (Christopher, 2012). The Kaizen principle indicate that firm
should place the order for raw material whenever it is most needed by them. This type of practice
will help in eliminating the cost of maintaining the extra raw material.
However, the product management process of Ikea does not comply with the given phase,
Hence, it makes the order of raw material as per the needs and demands of buyers. Thus, it is due
to the presence of given aspect wastages is being increasing within company. However, after
sourcing raw material in the next step manager of Ikea will make production of goods and
services. Hence, after this the product will be sent on to the quality department for testing and
finally it is presented to customers. In the given process it is examined that the finished product
of firm is tested at once. But, Crosby's Theory depict that the manufactured product should be
tested by quality team for more than one time. However, the process which is used by firm entail
that the manufactured product of Ikea is tested at once (Continuous improvement, 2015). Due to
this only, the cases related to number of defects in finished product is increasing significantly.
Thus, it is being required by the manager of firm that it should take significant action with regard
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to the same. However, if not taken then in the given situation it will become very difficult for the
cited firm with respect to mark an effective presence in the market where it is operating its
operation. The given thing will also have negative influence on the sales and profits of firm
(Melnyk, Cooper and Hartley, 2011).
Besides this, Joseph Juran theory gives importance to the training and development of
workers. Hence, it includes the given process in the quality management steps. But, the process
of Ikea does not showcase any evidence of same. Hence, it is very necessary for manager that it
should give consideration to the respective step. This is because, the given thing will help in
improving the sales and profitability related condition of enterprise. Furthermore, it will also
help in eliminating the issue which is affecting operation of cited firm.
4. Considering how potential changes would improve quality of Ikea product
Number of problems is being occurring in the existing product production process of
Ikea. Thus, several changes will be proposed to the existing process of Ikea. At first manager of
firm should make changes in its second step in which it will have to employ training and
development activity. Firm should also inculcate step of giving regular training to the workers
who works in research and development department. With the help of given change, manager of
cited firm can not only enhance effectiveness of its employees. But, it will also enable them with
regard to make production of such goods which fulfil the needs and demands of different type of
customers. Herein, it is by complying with given type of activity only manager of corporation
can deliver high quality services to its buyers (Escrig-Tena and et.al., 2012). (Oakland, 2012). In
addition to this, it will also help in fulfilling customer requirement which is to avail product at
cost effective prices. In accordance with the given context, it is examined that buyers generally
does not prefer to purchase costly product until and unless the final product purchased tend to
fulfill all the standard of high quality. Herein, by making significant changes in the existing
process of firm manager can enhance satisfaction level of buyers. This thing will lead to have
negative effect on the sales and profits of organization.
In addition to this, manager of Ikea is involving rechecking of product related step in its
existing process. In this step, the firm should regularly check that whether the product which is
being produced by it meet the needs of local customers who belongs to varied country or not.
Overall, it can be said that these all kind of changes which cited firm is proposing will lead to
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cause positive impact on company's operation. Furthermore, it will also enable it with regard to
take necessary action towards the operational problem which firm is going through (Borkar and
Koranne, 2014).
5. Recommendations
From the above comparison it has been recommended that to improve the operational
problem and reduce the identified problem situation it has been advised that management of Ikea
company must improve or revised the existing process map (Andersen, Dysvik and Vaagaasar,
2009). In the context of above the revised operational plan may include implementing the
technique that is just in time technique so that they can reduce the wastage of material. On the
other hand the revised process map must also focus on the devising the quality management team
at the time of testing the furniture product to measure their quality. The revised process map for
the Ikea is as follows-
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Illustration 2: Revised process map

 Assessment of needs and demand of the customers: The foremost step in the revised
process map is to assess or measure the demand and requirement of customers. With the
changing standard of living customers are focusing more on using modern designed
furnishing products within their home. Through assessing the requirement of customers
operational management of Ikea will acquire the raw material. Acquiring raw material: After assessing the need management will acquire the proper
and required raw material for meeting the demand and need of the customers. The
operational management of Ikea furniture retailer focuses on Just in Time technique that
will strive to cut down the in process merchandise and executing cost associated with the
manufacturing systems of the furniture. Training to staff: Another step is that employee must be provided with the proper
training before engaging themselves in the production process so that they may avoid the
defect within the furniture and also reduces the furniture decrement from the process. In
order to serve the customers of new market for instances China and India operational
manager need to trained their staff so that they can easily meet the customized
requirement of their customers. They must engage their activities in adopting the new
services as well as design related with the manufacturing of furnishing products. Production process: After providing training to the staff management must focuses on
the production process that is trained staff would render services in the production
process so that they can overcome the reduction of wastage. Along with this, training
would also help the staff to engage in adopting various activities within their process that
support in creating and manufacturing customized products for the different customers. Product testing: Afterwards the produced furniture product is being tested through the
round so that defected furniture item must be removed (Objectives of Operational
Performance, 2016). For this aspect Ikea focuses on developing the quality management
team that comprises of internal staff as well as external expertise outside the organization
that will properly test the manufactured product. Final product: Thus, after the product testing the furnishing item is ready to be sold in
the market and they are arrange in the proper manner so that they may not get defect.
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 Re-checking of the furniture product: For overcoming the problem of defect in the
furniture product the furniture retailer company engage in the re-checking services of the
product so that finally the product is packed and is distributed to the store or ultimate
customers. The final product is being tested by the professionals so that it may avoid the
defect among their customized products.
CONCLUSION
The aforementioned report has concluded operational management function plays pivotal
role within the organization as it support them in manufacturing the required output in the proper
time period. Furthermore, the report has also describe the different operational theories that is
Kaizen, Crosby and Joseph theory for the quality management. Furthermore, for improving the
processes according to the requirement some necessary recommendations has also been also
provided to improve the quality and reduce the identified problem from Ikea furniture company.
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