Operation Management & Ikea

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INTRODUCTION

The following assignment is based on operations managements within IKAE. The aim of this unit is to analyse the operations functions within the organisation by understanding strategic operations management, the operations process and planning and control.

“Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. It is also the management of resources, the distribution of goods and services to customers and the analysis of queue systems” (http://en.wikipedia.org/wiki/Operations_management).

About IKEA:
IKEA is a privately-owned company founded in Sweden by Ingvar Kamprad. He first started to sell pens, wallets, picture frames, table runners, jewellery and nylon stockings and decided to add furniture in 1947. IKEA has now around 260 stores, much of which are located in Europe, the United States, Australia and Asia. Nowadays IKEA is known for selling modern and utilitarian furniture at low prices their vision is "To create a better everyday life for the many people". IKEA motto is "Affordable Solutions for Better Living". Their operations management are strongly focused on achieving this goal; they use their resources effectively to gain profit by developing a more economic way for the production of their wide range of service. This has involved them in working closely with their suppliers in order to control aspects of their business from the production line. Unlike most furniture stores, IKEA sells goods which need to be assembled by the consumer; this has enabled them to use space more efficiently in their warehouse. The company has developed methods to satisfy customers with their Unique Selling Point (show room, children’ area) and a wise use of technology (stock control, internet). IKEA’s operations include the way they manage the processes, this includes the way they run their business-“culture”-, their norms and procedures- values-, decision making and strategic planning, and the qualitative and quantitative control of their resources- people, stock. To enable IKEA to maximise efficiency and minimise costs they need to review or maintain the processes of their operations which include the planning and control, their supply networking and the use of technology.

IKEA has managed to develop effectiveness by understanding the needs of their stakeholders and incorporate them into their agenda.

Scenario 1:
Visit a furniture store (other than IKEA) and observe how the shop operates, for example, where customers go, how they interact with them, how big it is, how the shop has chosen to use its space, what variety of products it offers, and so on.

1) HOW IS THE SHOP SIMILAR TO IKEA, AND HOW DOES IT DEFFER?

“Furniture to go UK” is a furniture store located in Enfield, Brimsdown. They started as a family business nearly 20 years ago. This business operates on a much smaller scale than IKEA and only has one store. However, the company has managed to create customer loyalty thanks to the simplicity of their layout and good distribution operations. The way they control and managed their resources differ from IKEA.

The following table represent the similarities and differences between IKEA and Furniture to go UK:

SIMILARTIESDIFFERENCES
Both storesIKEAFurniture to go UK
ProductsFurniture
Value for moneyFlat pack
IKEA sell smaller items for home improvement e.g.: curtains Goods are already assembled

LocationOutskirts of townEdmontonEnfield
FacilitiesLarge parking areasRestaurant
Children’s area
LayoutThere are different steps to go through 1)Show rooms 2)Warehouse
3)Check out
Furniture to go UK is more like a warehouse where items are displayed into different departments displays similar goods together Shopping experienceSelf-service stores
And assistanceCustomers can spend up to 2...
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