IKEA

Operational Management: IKEA

Company Overview2

Operations Management at IKEA3

The Transformation Process3

Importance of Performance objectives4

Quality4

Speed4

Dependability5

Flexibility5

Cost5

Strategic importance of operations6

Process Technology7

Advantages/Contribution7

Suggestions/Recommendations7

References9

Operational Management: IKEA

Company Overview

Ingvar Kamprad created IKEA 60 years ago. The company's name is an abbreviation of the initials of Ingvar Kamprad, Elmtaryd (the farm where owner grew up) and Agunnaryd (his hometown)The founders based the company on the basis that as far as the price was affordable,people would be willing to travel long distances out of the town to purchase furniture (Doole and Lowe 2005). IKEA does not have any manufacturing facilities. It uses manufacturers from all over the globe for its supplies. All activities of research and development are located in Sweden. IKEA allows its customers to assemble the furniture to cut the cost. To improve the shopping process, IKEA provides catalogs, tape measure, pencils and shopping list. IKEA's styles and designs are much popular amongst the customers because it provides style, quality and affordability at once. These qualities make IKEA products worth buying for the customers. IKEA's products are produced worldwide in many countries. The suppliers are updated with the design and configuration, and they are the one who produce the material and ship them to IKEA store worldwide. Global sourcing is considered as one of the most challenging tasks for supplies managers. As the pressures increases to reduce costs, organizations shift the production from local companies to low cost countries (Hultman, et al, pp. 1). Companies have been shifting, and continue to shift, resource supplies from local to low cost suppliers.

Operations Management at IKEA

IKEA designs products which can easily be packed. The company has stores of optimum size in very attractive locations. The layout and design of the stores gives a smooth flow. The cleanliness and safety of the stores is maintained very well. The quality of service is monitored and improved continuously. IKEA ensures availability of furniture on stores' shelves (not running out of stock) with the help of effective inventory control system. IKEA's operations are running worldwide. The production is outsourced to many suppliers across the globe. The research and development department is centralized in Sweden, which is responsible for the the elegent designing of all IKEA furnitures. The configuration is than conveyed to the producers aroud the world. The stores are in direct connection with the production facilities. The stores operations are governed by IKEA's state of the art policies and service code. The Transformation Process

The process of transformation in operations is related to the nature of its input resources. The research and development department, centralized in Sweden is responsible to create customer friendly designs. The suppliers, mainly from China, Italy, Poland and other countries are responsible for the production. No matter, where the production capacities are, IKEA is always committed to long-term cooperation and vertical integration (Johnsen, pp. 337). The company has more than 123,000 workers, 267 group stores, 11 customer distribution centers and 31 offices which help them monitor their suppliers (IKEA official website). IKEA stores are one of its ...