How Does Ikea Approach Operations Management?

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The main purpose of this paper is to focus on the how IKEA Company approached its operation management. Particularly, it covers the following: how the company establish and manage customer requirements, secondly how does these customers requirements used for the company’s product and services, then, third covers the operational systems and processes it used in its operation, fourth consists of capacity planning, process layout, and product services/scheduling, inventory and projects were managed in the organization. And, lastly is on why and how monitoring and evaluation of operation were carried out by the company. This paper also provides empirical findings and application of relevant theories that will help readers to really understand how the company operates and what relevant theories it applies. Introduction

In most companies these days whether it is local or multinational companies, they are always faced with big challenges. Challenges those are sometimes insurmountable to overcome like continuing to be innovative or problems related to cost. These are two of the most common challenges that company continuously faced, but these problems may also be overcome only if the company operates in a way that it focus mainly in its main strength and at the same time focusing on the right market, where they would know that they have the advantage. In this paper with IKEA Company as the main focus, it will give us exactly how typical multinational companies manage to operates. It will include such processes like customer requirements, operations management, monitoring projects and other theories and processes applied in actual operation. This paper also provides some important empirical findings that will help to support the theories and actual strategies applied by the company. Historical Background of IKEA Company

It was not so long after the company founder INGVAR KAMPRAD born in 1926 and just 17 years later after that year, where at a very young age when INGVAR registered the first IKEA Company and this was in July 28, 1943. Actually, the name of the company IKEA stands for (Ingvar Kamprad Elmtaryd Agunnaryd). Couple of years later, the company had its first advertisement through a local newspaper, and then through aggressiveness in the business, Ingvar launched its first fine and modern line of furniture in 1948. Followed by launching of IKEA’s catalogue and first furniture showroom in Sweden in 1951 and 1953 respectively. Four years later, the true concept of the company’s creation of well designed furniture at a very low price started in 1955 and three years later it was the world’s first IKEA store opened. From those early years the company started to grow and number of co-workers and that started to be seen by the company in 1958 and a year after that was the introduction of the company’s self assembly furniture. But, since the company want to make sure that they offered not only low price items, they started to find ways on how quality will be implemented. That is why by 1961, the company started to implement quality testing in all its products. Then the company sees opportunity to expand and by 1963, the company launched their first IKEA store outside Sweden and this is in Norway. Then from their on the company started to grow and stores outside increases and it was first penetrated in the European region. And by the company reaching the 90’s, the company became design oriented which is needed in order to compete, but still the main concept and vision of the company to lower the price and at the same time quality is not out of the plan and it continuously been the advantage of the company. Like in 1997 specifically was the year for children, where the company has developed numerous products for kids and still innovative design continuous to work for the company. And by 2003, through its donations has helped a Swedish hospital to build “The Kaprad House” which primarily facilitates for cancer patients.1 How does the...
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