Effective Inventory Control and Management: a Case Study of Ikea

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“EFFECTIVE INVENTORY CONTROL AND MANAGEMENT: A CASE STUDY OF IKEA”

UNIVERSITY OF WALES

JANUARY 2012

Table of Contents
ABSTRACT4
CHAPTER – 15
1.1 INTRODUCTION5
1.2 BACKGROUND OF THE ORGANIZATION7
1.3 OBJECTIVES8
1.4 RESEARCH QUESTIONS8
1.5 PURPOSE OF THE RESEARCH9
1.6 DELIMITATIONS9
1.7 TARGET GROUP10
1.8 JUSTIFICATION FOR CHOOSING THIS RESEARCH TOPIC10
1.9 PROBLEMS FORMULATION11
1.10 OVERVIEW OF THE DISSERTATION11
2.4 INVENTORY CONTROL17
2.5 APPROACHES USED FOR INVENTORY CONTROL:17
2.6 INVENTORY CONTROL SYSTEM19
2.7 INVENTORY MANAGEMENT SOFTWARE:20
2.7.1 Components of the software:20
Asset tracking20
Barcoding20
Order management20
Service management20
2.8 CONTROLLING INVENTORY21
CHAPTER – 3 Research Methodology:29
3.1 RESEARCH TYPES:29
3.1.1. Exploratory Research:29
3.1.2 Descriptive Research:30
3.1.3 Explanatory Research:30
3.1.4 Chosen method for this research:30
3.2 RESEARCH APPROACH:30
3.2.1 Qualitative Approach:31
3.2.2 Quantitative Approach:31
3.2.3 Chosen approach in this study:32
3.3 RESEARCH METHOD:32
Inductive versus Deductive approach:32
3.4 RESEARCH STRATEGY:33
3.4.1 Experiment:33
3.4.2 Survey:33
3.4.3 Action Research:34
3.4.4 Case Study:34
3.4.5 Operations Research Modeling:34
3.4.6 Chosen strategy for the research:35
3.5 DATA COLLECTION:36
3.5.1 Primary Data:36
3.5.2 Secondary Data:36
3.6 APPROACHES FOR ANALYSIS:37
3.7 QUALITY CRITERIA:37
3.7.1. Validity:37
3.7.2 Reliability:38
CHAPTER – 4 FINDINGS & ANALYSIS:39
CHAPTER – 6 CONCLUSION & RECOMMENDATIONS:50
CHAPTER – 6 FURTHER RESEARCH:52
6.1 DIFFERENCES BETWEEN THE MODEL & REALITY53
6.2 FINAL REMARKS:55

ABSTRACT

In this research study the inventory management and control at IKEA is studied. IKEA is a home furnishing company that produces high quality products at very low prices. This is only possible with the help of VMI i.e. vendor managed inventory system. To reduce the cost of logistics, the inventory must be reduced from the supply chain. VMI is a very good strategy of supply chain management where supplier is whole solely is responsible for full filling the demand inventory at customer’s stock. There are 19 VMI relationships which are maintained by IKEA. In this way IKEA is able to reduce the inventory at their stores and enhance the service level and satisfy consumers very well.

The main purpose behind doing this research is to determine whether the coordinated inventory management is useful for reducing the inventory levels at the IKEA stores or not. In this research a complete study about the inventory control and management is done.

The results shows that there are various innovative ways used by IKEA to reduce its inventory level so that low prices can get involved in managing the inventory and good quality of service can be provided to the consumers. The VMI system used by the IKEA benefits the supply chain; therefore this is responsible for increasing the productivity of suppliers. The increased number of inventory at distribution centre of IKEA may be troublesome but it can be also solved with the help of VMI

CHAPTER – 1

INTRODUCTION

1.1 INTRODUCTION

The stream of management that is related to the keep and manages the objects and material or goods is called as inventory management. The basic domains of inventory management is to correct determination of order, asking for the material on correct time means proper timing. Inventory management is very important in supply chain management. To reduce the cost of total inventory keeping is referred as Inventory control. At present time inventory control is done with the help of barcodes and radio-frequency identification (RFID) tags that enable documentation of inventory automatically. Some of the inventory objects are fixed assets, circulating tools, library...
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