Operations Management

Topics: Management, Operations management, IKEA Pages: 4 (1051 words) Published: March 24, 2013
Operation management is the activity of managing the resources, such as capital, facilities, raw materials, technology, and so on, which create and deliver services and products. ( Slack et al, 2011 ) No organization could survive in long term if it cannot manage operations management effectively. The importance of operations management is that it affects an organization’s costs. There are three activities of operations management, which is directing the overall strategy of the operation, designing the operation’s services, products, and processes, delivering to customer, and developing process performance.

IKEA’s History and its Operations Management

IKEA was founded in 1943 in Sweden, and it is a successful international retailer with 276 stores in 36 countries. IKEA offers a large variety of well designed furnishing products with low costs, which has contributed to its success. IKEA also contributes a lot to the environment. It cares about the safety of raw materials and production. For example, IKEA stopping selling plastic bags, and it encourage customers to bring their own bags. To support “less plastic bags” action, IKEA reduced 30 cents each of its own recycle bags.

Supply Network Design and Supply Chain Management

Most IKEA stores locate outside city centers in order to reduce transportation costs and capital costs. For example, there are two IKEA stores in Singapore, one is in Queenstown, the other one is in Tampines. These two places is not in the city center. Besides, Singapore is a small country that allows IKEA to save more delivery costs comparing with those big countries, such as America. In order to keep the price low, IKEA transports products by truck, rail, and ship. Flat packs and stackable products allows IKEA to handle more of them during delivering. Process Design and Layout

Firstly, IKEA’s biggest symbol is its large blue building with yellow shop sign. Secondly, its showroom design is similar to ‘one way’ layout, which...
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