Workshop 1: Introduction to Systems and Operations Management
INTRODUCTION TO SYSTEMS AND OPERATIONS MANAGEMENT: IKEA CASE STUDY
Love it or hate it, IKEA is the most successful furniture retailer, with 276 stores in 36 countries. Ingvar Kamprad set up the business is the 1950s in Sweden, he went for an out of town location so it would be bigger and cheaper. He came up with special selling techniques which include the design of the store layout – the stores have the furniture organised as if it is in a home. The result is that customers are encouraged to spend a long time in the store and want to recreate the look. IKEA started out selling suppliers’ products, but soon moved on to design and sell its own products with suppliers manufacturing them and packing them into their flat-packs. information desk to find out how they can collect that item. Before leaving customers pay for their items at a checkout, this is similar to those in supermarkets but the conveyor belt is larger. Customers then make their way to their cars with their products and load them into their vehicles.
The flat-pack design and the layout of the store meant that IKEA could dramatically cut costs. The flat pack design removed the cost of assembly and delivery, as the customers do that themselves. The store became a combination of showroom and warehouse where the customer would pick the items out themselves. The store design had to ensure smooth flow from parking; moving around the store, ordering and picking up goods and finally paying for their goods. Many facilities have been added to encourage customers to stay, including: supervised children’s play area; small cinema; baby and parent room; restaurant and café. Customers largely serve themselves and there are few sales people in the showroom. There are information points for customers to ask staff questions. Smaller items customers pick up as they walk around. Medium-sized items are... [continues]
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