IKEA is a UK based furniture manufacturing concern which employs approximately 183,000 employees and is considered as one of the largest scale organization in the country. It is a Swedish multinational company which deals in home accessories, appliances, assembling furniture, designing and selling furniture. In case of IKEA, the operations management play a significant role as it aid the organization in carrying out the production processes with utmost efficiency as well as delivering of the finished goods to the distributors and the retailers on time (Ikea, 2017). The primary competitors of IKEA are American Woodmark, Krenov, Barn Furniture, Blu Dot etc. all these gives a tough competition to IKEA. The customer base of IKEA is also very extended which includes people of all ages, geographic locations and sexes. The people seeking good furniture quality at an affordable price are the primary target customers of IKEA.
In the manufacturing of tables at IKEA, there is firstly use of pine boars which comes from the warehouses, and then they are cut into the required lengths. There is setting of appropriate temperature so that the wood piece neither become dry nor swell. The approximate temperature range is between 50-85°F (10-29°C). After that the next activity is to join the pieces of wood through the glue which is water-resistant (Advameg, 2017). From here, the raw table tops are shifted to the belt-driven sanders so that the splinters and roughness can be removed. Then with the help of CNC i.e. computer numerically controlled router, helps in appropriate cutting and edging. Once this is completed, there is done working over the legs and drawers of the table. The assembling process of the table is performed hand by hand. Lastly, through the hand sander, the tables are provided final sanding (Star of the Universe, 2016).
In all the above process, IKEAuses a lean approach to reduce its overall costs and to achieve increased productivity. The lean approach is a major element of the manufacturing model of the table and its primary aim is to enhance the business operations initiating from the raw materials’ acquisition to the final delivery of the products to the end customers. The overall cost of manufacturing of a table can be reduced by controlling the assembling process and product decomposition process. For attainment of this, the company takes use of the conventional approach of DFM i.e. design for manufacturability and DFL i.e. design for logistics (Spring and Araujo, 2009). These are performing by taking consideration of the various product functions, product assembling, manufacturability variables, packaging and transport. All these elements help in the establishment of lean manufacturing at a time of manufacturing of a table IKEA (Narasimhan and Schoenherr, 2012).
The process engineering at IKEA comprises of the various analysis and designing of the workflows and processes within the organization. These are undertaken with the primary objective of supporting the organization in order to rethink and restructure the way of undertaking the business operationsso that there can be removal of non-value adding tasks. (Jonsson,Rudberg and Holmberg, 2013). It helps in enhancing the customer value, increase competitiveness, declining the operational costs and improving the customer service. The re-engineering makes assure that the various organizational business processes are fragmented in several sub-processes and sub-tasks which are undertaken by various operational units present in the company so that the organization can eliminate all the undesired activities which pose a cost burden. From the year of its establishment, IKEA is always being the leader in the operations transformation for optimizing and enhancing the business performance through elimination of wasteful processes (Li, et al., 2008). For example, IKEA has established an online platform over which people can enquire about the various purchases they have made or the available products of the company. This directly reduces the costs of the physical departments which were there for the resolving of issues and queries. This is a great improvement and advancement from the old and traditional methods where the customers used to visit the stores for making enquiries and purchases regarding the products. The re-engineering process at IKEA also involves ERP i.e. Enterprise Resource Planning (Jacobs, Chase and Lummus, 2014).Primarily, the organization is also planning to come up with various continuous improvements for enhancing the efficiency and effectiveness of several business processes and the associate performance. The company takes use of the Lawson Opportunity Analyzer for analyzing and recognizing the most critical opportunities for developing strategic goals and improving business processes. This is very vital in supporting the enhancement of the product availability, reduction of the customer complaints and reduction of the processing time of orders. IKEA also takes use of technology development for the product improvement. In that concern, the organization emphasis upon the design, function, price and quality, and environment and health at the time of product development and product design phase (Jonsson and Foss, 2011).
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Input |
Process |
Output |
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· Material: Pine boars · People: workers for working over the pine boards · Water resistant glue |
· Temperature setting · Cutting · Cutting and edging through CNC i.e. computer numerically controlled router · Raw table tops are shifted to the belt-driven sanders · Assembling of all the different parts |
· Removal of splinters and roughness · A fine table of medium size is manufactured |
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Input |
Process |
Output |
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Peoplewho bifurcates the valuable activities from the non-value activities Materialare identifies which are supporting the existence of non-value activities High tech systemsfor identifying the errors and areas of improvement Substantial Methodsare used for undertaking the various operational activities so that minimum waste could be there Policiesare framed which guides people regarding the effective use of scarce resources Effective Proceduresare set, as per those procedures everyone has to carry on with activities |
Assembling of itemswhich are required for having product ion of valuable products Design of configuration (e.g. a shelving system)as it will help in the faster identification of all the materials without any mess or muddle which happens because of a single shelf for all the materials. Process financial transactionsrelated to any sale of products Answer queriesof the customers through online support which is available 24*7 Restock warehouseso that There can be managed the raw materials so that future activities do not get affected Stafffor undertaking activities by implementing various techniques ERPfor achieving an integrated applications system to successfully operate the business activities Online sellingof the products so that there can be reduced the costs of physical departments |
Qualityis achieved by the removal of the non-valuable activities Timeis also saved by eliminating the wasteful activities and working over the potential ones Costis also minimized as the cost of overheads is eliminated by the removal of non-value adding activities |
The effective distribution and production of services and goods to the consumers is the basic aim of quality management. It supports the organization by making it assured that the goods provided to the target market customers are of supreme quality. It also supports the company by improving the overall organizational productivity and performance of the various operations and thus helps in rapid achievement of the organizational goals and objectives (Hultman, 2012).
Several authors have stated and described the benefits of an effective quality management such as the first and primary benefit which has been discussed is the boost in the customer service. The operations management help in providing prompt after sales support, right time delivery of the goods, delivery of products at appropriate location with proper quality and quantity. The authors have evaluated the significance of quality management in the organization by describing that quality management works with all other departments by maintaining interconnectivity.
In all the organisations, the implementation of quality management in the organisational activities has a very essential role to play since the time of its incorporation. It has a major role in providing success and growth a company. The quality metrics is one of the major elements of the quality management and its primary aim is to enhance the business operations initiating from the raw materials’ acquisition to the final delivery of the products to the end customers. There are number of common goals which are common and shared by various departments in the organization. And to achieve these goals such as successful marketing, right retailers, effective packaging etc. there is taken use of quality management (Hellström and Nilsson, 2011).
The areas on which quality management focused upon includes maintaining quality standards, meeting customers’ demands, increasing responsiveness, improving productivity, contributing to the bottom line and forecasting sales. The quality management can either be operational, tactical or strategic in nature. There are several responsibilities which have to fulfil by the quality mangers to have effective operations management in the organizations. The responsibilities includes determining locations for the plants, structuring of the communication networks, designing, selecting equipments, supervision, inventory management and monitoring the quality control.
Quality management can be regarded as those particular management fields which have its focus upon the management of several organizational practices have their involvement in the distribution and production of services and goods for enhancing the organizational performance (Halldórsson, Kotzab and Skjøtt-Larsen, 2009). It is basically concerned with the management of the business processes which support the transformation of the various input resources into the required output services and products. The quality management is also regarded as the approach which is accountable for the efficient resource management in terms of distribution, production and allocation. The benefits of quality management include reduced costs, offering of competitive prices to the customers, value creation, increase customer base and higher revenues.
There is vital importance and significance of quality management for the business organizations in almost all the industries. The main objective of quality management is to provide the adequate customer value by taking use of an effective value creation process which possesses increasing efficiency and productivity. In both the service and the manufacturing industries it has equal importance (Hill and Hill, 2012). In a service organization, the Quality management is accountable for assuring for the quality of the services provided to the customers that they achieved best experience and supreme quality. In a manufacturing concern, the quality management is responsible for maintain the quality of the products so that the consumers can get the appropriate quality according to the value they have paid for that product. Presently the furniture industry is booming rapidly as there is increased customers’ demand for highly personalized and improved furniture quality and designs (Enquist,Edvardsson and PetrosSebhatu, 2007).
In the present scenario, the customers have a diverse set of needs and to remain competitive and sustainable it is essential to meet all those needs. From the well-established and recognized organisation, customers used to develop several expectations in the form of high quality, value and excellence. For fulfilling all these expectations of the customers, the companies take use of quality management perspectives. It is a set tendency that the customers compare the reference points with the already set perceptions in their minds related to the quality of the services and products offered (Agus and Hajinoor, 2012). And as a result of this, the organizations implement various strategies andapproaches of quality management in all the operations and functions of the company. Quality management also helps the company in improving the overall streamlining operations and productivity so that the customers can attain high value products which will help in enhancing their experience.
Many of the theorists have laid their focused discussion upon several companieswhich have attained huge competitiveadvantages and recognition by taking use of a similar approach like IKEA. For example, Toyota is the best example which has firstly implemented the lean manufacturing operations in the business activities (Pepper and spedding, 2010). The company has gained a huge market share, profitability and customer base by having a successful implementation of the same approach it its production and manufacturing. The numbers of companies are continuously risingwhich are getting benefitted by the efficient use of this approach in the manufacturing functions of the business (Goetsch and Davis, 2014).
There are various potential quality problems which are there in the various operational processes of the company. These problems include:
Absence of appropriate tools to implement lean philosophy in manufacturing of products
It has been analyzed that IKEA do not provide adequate and appropriate tools to the workers for implementing effective lean philosophy in manufacturing operations. This results into ineffective ongoing of the production and manufacturing process. There occur errors, higher costs etc. issues in the manufacturing.
Store level not an organizational level which restricts effective production
The lean philosophy in the manufacturing operations are applicable at the store level only and not in the entire organization. It is necessary that the lean philosophy must be applied and implement at all the stores so that every production function can achieve the benefits and competitiveness. But IKEA lacks behind in implementing these lean based operational processes in the overall organization. This decreases the overall efficiency of the organization (Chopra and Meindl, 2007).
Restrictions by the strong Culture which acts as barricades in successful business operations
The organization has a strong culture which restricts any kind of change or modification in the business processes and strategies. It is very difficult to implement new processes and lean philosophy in that rigid and vibrant culture. Thus it acts like a barricade for the organization to have effective business processes.
Absence of appropriate trainings
The employees are also required to have appropriate knowledge for taking use of such high techno savvy operations and functions. To work on the activities which are lean based as well the use of strategies related to process re-engineering tools for example ERP, requires appropriate training. But in IKEA, no such trainings are offered to the employees. Thus, it creates hurdles for the workers to adapt these technologies and work effectively. Therefore, the employees who do not possess higher technical expertise are unable to use such efficient processes (Centinkaya, et al., 2007).
To all the above potential problems there are certain solutions which are required to be implement to resolve those issues and problems.
If IKEA perform the assembling function at all its stores by itself then there will be huge cost saving and reduction in the issues. This will lead to higher profit generation and improved efficiency of the quality of the products and services. Thus,the do it yourself assembling is a good technique to solve the problem of higher cost and inefficiency in production function of lean based manufacturing operations.
Inventory optimization
The concept of inventory optimization is very much useful in implementing the lean based manufacturing operations and re-engineering in almost all the stores of IKEA. It leads to greater safety stock level, cash flow improvement, improving customer service and lowering down the inventory cost. With the inventory optimization IKEA can have better stock control (Ayers and Odegaard, 2007).
Cultural amalgamation
The culture is a barricade in the adaptation of the processes so it is required that the strategies and the operational processes must be in amalgamation with the organizational culture. This will help in getting both the operational as well as the cultural benefits.
Offering adequate tools and trainings
It is very much essential to provide appropriate tools and adequate trainings for the implementation of the lean based manufacturing process and the other production process. Hence it is required that IKEA should provide these tools and trainings to the employees so that more number of employees can be involved and provide higher competitive benefits to the company (Bettley and Burnley, 2008).
In this chart, there has been displayed that in what manner the process re-engineering takes place at Ikea. Initiating from the development of the objectives and vision i.e. to eliminate the non-value adding activities, the workers are required to understand the current processes. In the next phase, al the activities and processes are identified which are required for redesigning. After analysing the processes, there is done identification of change levers so that effective measures could be taken. After that there is implementation of the re-structured or new process and slowly it becomes operational. There is done analysis and evaluation of the process that whether it is supporting the aim of removal of non-value activities. And after successful incorporation, at specific interval periods continuous improvement is done in the process.
There are certain challenges which overcome in implementing the proposed solution to have higher operational efficiency. The challenges are:
Cultural transformation
In the implementation of the solution, cultural transformation is one of the challenges as the organization holds strong culture thus it is difficult to change the culture or have cultural transformation in the organization.
Complexity Barrier
The lean based manufacturing operations or the new re-engineering processes are difficult to implement as the new technologies are very complex and are not easily be understood by the workers. Thus, there are several complexities which restrict the usage of technological tools.
Technology Barrier
The inventory optimization is restricted by the technology barrier as there are present tools such as ERP system; modules built into etc. all these are the technology barrier which acts as the challenge to have effective inventory optimization (Andersen and Skjoett-Larsen, 2009).
There are few recommendations which can help IKEA in achieving competitive benefits and better operational processes:
Conclusion
Quality and operations management results into highly efficient and improved processes. It laid emphasis over the attainment of business operational efficiency as well as declined costs. The operational management is concerned with the transformation of the various inputs such as materials, labor and energy into effective outputs such as goods and services. The report concludes that by taking use of effective quality and operational management IKEA can attain several competitive advantages such as higher customer value, improved services, higher customer engagement and increased organizational capacity. The report has analyzed two major processes i.e. the lean based manufacturing operational process and the re-engineering process. Both the processes provide various competitive advantages to the company in the furniture industry and help IKEA in becoming the leader of that specific industry. There are various core competencies possessed by IKEA which comprises of declined pricing, diverse functionality, excellent quality and flat packaging and this provides several competitive advantage to the company. It has been concluded that there are certain problems which have been analyzed in these operational processes but with effective operational management and use of adequate strategies these issues can be managed and resolved. IKEA has several leading opportunities present in the upcoming future if the company implements effective operational management.
References
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