Unit 16 Operations and Project Management Assignment – IKEA

Program	Diploma in Business
Unit Number and Title	Unit 16 Operations and Project Management – IKEA
QFC Level	Level 5

Introduction

Operations management is a branch of management that is responsible for designing, controlling production and redesigning the organisational business operation to produce goods and services. Operations management is being utilised mainly to increase the efficiency and effectiveness of planning the activities that have a significant impact on the organisational business process. The Unit 16 Operations and Project Management Assignment IKEA will illustrate the importance of operations management for the leading furniture company IKEA, which is offering high-quality goods in a wide range. Moreover, the report will present the process model and information about the utilisation of "Three Es" and the five performance objectives for the control of IKEA operations. In the second section, the report will present the linear programming and discuss the critical path and networking planning. IKEA is the world's largest furniture manufacturing and retailer organisational entity that has business in different parts of the world based on the requirements and needs of the customers. As of March 2016, IKEA has 384 stores in 48 countries and offers more than 12000 goods. The next task report will develop the local area networking plan and identify the techniques that can be utilised for project management and quality control in the stock, sales and purchase process.

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Task 1

Being aware of operations management is highly significant to IKEA Furniture.

The significance of operation management is evident through IKEA Furniture. IKEA is a Swedish firm that deals with appliances, furniture, and home accessories. IKEA desires to waste less and be efficient at a low cost. In the store, the firm desires to utilise its warehouse efficiently, monitoring customers and delivering products at a low cost of moving. IKEA's business thrives through efficiently managing these operations. Operation management takes care of the company's business activities of the system. It is concerned with designing and enhancing the overall system. It assists the firm in earning more money. For IKEA, operations management monitors activities to make them efficient and effective (Hindustan Times, 2025). Efficiency is highly essential to achieve the primary purpose, which is to maximise profits. To achieve this, it discovers talented individuals and other resources that reduce operational expenses. IKEA reduces costs by eliminating less profitable projects. It maximizes its use of all resources to produce maximum output. Effectiveness and efficiency cultivate greater productivity and enhance capacity by utilising resources that improve quality. It has been noted that operations management is crucial in IKEA. Its control and coordination span numerous areas, such as product evaluation, advertising, promotion, product development, distribution, sales, and service.

Operations management is crucial in the manufacturing sector. This is due to the fact that manufacturing companies deal with numerous processes and operations used to produce products. The companies then start by acquiring raw materials and proceed to produce goods. Therefore, successful operations need operations management, particularly in the manufacturing sector. Apart from this, the service sector also entails some processes such as learning customers' needs, receiving feedback on services, and enhancing the experience overall (EY, n.d.).

Describe the operational functions of IKEA Furniture

The operation functions are a set of processes that are interconnected and interdependent. One or more resources are used as input in each step. Operational functions are dependent upon decisions and outcomes. Strategic plans are created on the basis of future situations and requirements. The operational functions of IKEA furniture are as follows:

 

Design process and determine requirements: It is a planning phase. The operational manager determines how to execute the process. This identifies the human resources and technical tools required. The operations manager also knows how to execute this process properly. For IKEA Furniture, this role checks what raw materials, technical tools, and human resources are required. All of these requirements are compiled as input for the subsequent stage (Stevenson, 2024). They are compiled in sufficient quantity so that the subsequent stage will not run short of resources.

Process activities: The Process step is the most crucial element. This is where high expectations are set because the company desires to provide quality products. For instance, IKEA has process operations that can be performed safely, within time, and provide the best quality at minimal cost. All these should be achieved during the process step. It encompasses all the steps that must be executed one after the other. The activities also require a sufficient number of inputs (Stevenson, 2024).

Monitoring and Reviewing: Operational managers have to carry out monitoring functions when there is processing of activity. Monitoring is done with respect to the cost and the quality of the product. In IKEA, product quality is checked, and if it is not up to the mark of quality, then the ongoing process rejects the product, and it is returned to the manufacturing phase for correction. The organisation is looking to reduce the cost of the process. Hence, operational managers have to control the cost. The output of the process function is checked, and ultimately, the quality department checks the products produced to measure the product quality (Kamal et al., 2025). This checking determines the quality and cost of the development of the product. The review is helpful in determining the cost of selling goods so that the company will earn profits.

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Three E's of business - Economy, Effectiveness and Efficiency

Business operating activities can be executed very easily with the right balance of the 3E's. The three E's are economy, efficiency, and effectiveness.

Economy: Economy means doing something in a way that is cost-effective. This part of the business talks about using resources in the most effective way to get something done. Only as much as people, money, and time should be used in order to meet an objective. IKEA furniture takes very seriously what resources are actually needed to get something done. This enables them to use only as much of the required amount of materials and labour to make the production less expensive (Skadden, 2025). The business avoids doing things that are not needed in order to save costs. The product will be sold cheaply to the customers.

Efficiency: Efficiency is performing work with minimum effort. IKEA considers solutions and takes the simplest means to perform the work. The company also provides tools and training to do the work easily. Efficiency is required in a company to deliver orders on time. It also saves business time and resources so that companies can perform better with efficiency. But efficiency should not negatively impact the economy. There should be a suitable balance to derive more advantages.

Effectiveness: Effectiveness is related to performing a task in a better way than it can be. Efficiency may lead to reduced effort, but it may be a lengthy process to achieve a goal. Effectiveness helps to find an optimised way to achieve a goal. IKEA is actively using e-business strategies to attract more customers and improve accessibility. The organisation is giving discounts and offers to online buyers, which can be seen as an effective way to sell more goods (Maldonado-Guzmán and Betancourt-Chaparro, 2024). Implementation of efficient and effective methods in business may not be economically feasible in the initial state, but the future can be predicted smoothly and managed. So, businesses need to consider the three E’s to make processing easy, effective, and cost-effective.

Analysis of the way IKEA operates.

Operations management is planning and controlling the way new products are manufactured and adapting business operations to satisfy needs. It has four fundamental steps: input, transformation process, output, and feedback. Operations performed by IKEA in order to produce products are employed to illustrate how the company controls its operations.

Inputs: Inputs may be raw materials and resources that help in developing a new product or service. Inputs can be categorised into two depending on their use.

       1. Transformed resources: This refers to the raw material to be used in making a product.   Glue, plywood, frames, and iron nails are transformation inputs by IKEA.

        2. Transforming resources: This resource is utilised but not in the form of raw material; it is merely responsible for generating the products we require. Transforming inputs utilised by IKEA are machines, human labour, and money (Stevenson, 2024).

Transformation process: This is the process by which the inputs of IKEA turn into an output. Input could be information, labour, or physical goods needed to make the product. For example, when they make a new sofa, the company will use the described input and transformation resources. They will use plywood, glue, and iron nails in the right way to make the product. So, how they handle inputs to make an output is called a transformation process.

Output: The output is the outcome of the transformation process. Under some circumstances, the transformation process may yield unwanted outputs. The IKEA firm inspects the outputs to determine whether they are of the desired quality. The defective or low-quality product cannot be sold, and it causes a loss to the firm. Producing excess amounts of low-quality products can lead to problems with operations and poor financial performance (Krajewski et al., 2021).

Feedback: Feedback is recommendations for improving the output. If production processes can be changed or made better to correct the mistakes, then there can be a better quality product from the output. IKEA utilises feedback to correct the faults in production.

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Grappling with cost-cutting and quality enhancement.

IKEA Furniture has a huge challenge: cost reduction while maintaining quality simultaneously. IKEA wishes to implement strategies and resources that lower the cost of operations without compromising the quality of the products. But it is difficult to accomplish the two simultaneously. Quality is highly significant for IKEA to continue its current position. It has been discovered that maintaining quality normally costs and takes more time and money. The quality desired by consumers may push them to pay more. Conversely, attempting to cut costs sometimes compromises quality. Low-quality products lead to the destruction of the brand's reputation. It can also result in fewer sales (Dwivedi, 2024). Thus, it is extremely crucial to maintain cost reduction and quality improvement simultaneously. While cutting costs is required to gain more profit from sales, it is also required to compete with other brands properly.

To provide more advantages to customers and remain in the market, the company should control the cost of products and their quality whenever possible. IKEA must discover new methods to reduce the manufacturing cost of products. To achieve this, the company can purchase a large amount of raw materials at discounted prices to reduce the cost of each product. To maintain the quality required, some human labour can be substituted with machines to reduce costs overall while maintaining the products' strength (Chen et al., 2022). The management of the company can also seek new cities to develop and outsource business, which can decrease transportation and supply costs. All these steps will appear in products as reduced costs while maintaining the same quality. This would reduce stress to some extent.

Determining the significance of the performance objectives

For a furniture manufacturing company, we need to determine what are the operational management goals. This assists the manager in measuring the operations' performance to determine the desired outcome.

Reliability: The organisational focus would primarily be on the availability of the resources and equipment that have been utilised to design and develop furniture products and services.

Cost: Cost is of paramount significance for any activity and work. IKEA always attempts to maintain the cost as low as possible while maintaining the quality at the top, which may vary depending on what is necessitated by the customers (Ghahramani et al., 2024). Whether the company is successful or not depends on how much is being spent and what profit is generated from the business.

Flexibility: The task planning and execution need to be flexible in IKEA's task production process and operations management. It facilitates the timely completion of tasks and the effective management of the planning of human resources.

Quality: IKEA is among the largest furniture brands. The company is trusted by customers due to the quality that it produces and provides. The firm has highly satisfied customers when it comes to the quality of its furniture globally.

Speed: To achieve the deadline of task completion, there has to be good speed in manufacturing in terms of the management of the resources, utilisation, and scheduling of the activities (Pati et al., 2017). Proper communication among the departments by the management of IKEA will have a substantial effect on performance.

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Task 2

Linear programming and how it increases value to the production process

Linear programming is the process of operations management planning and decision-making to set the equipment and tools as per the needs and activities of the organisation. The process includes the mathematical concept for formulating the plan. The management of IKEA can adopt this method to get the best result to maximise profit by enhancing efficiency. The process is useful in enhancing the value of the operational activities of IKEA by assisting in recognising the network flow; establishing the engineering process and recognising the price and cost of each unit to make decisions for the implementation of the changes in the existing process (Ghasemi et al., 2024). Apart from this, to make decisions for the procurement of raw materials, the organisation would adopt linear programming, which will assist in the forecast of the cost of production as well as assist in recognising the areas of monitoring that assist in reducing the cost and enhancing the production of furniture.

Apart from that, linear programming will assist the management of IKEA in considering any adjustments in the production process, which will assist in maintaining the operating activities intact.

Critical path analysis and network planning

Critical path analysis is a valuable tool for operations management and project management. It helps in network analysis and handling complex and time-critical tasks in the organisation. IKEA management can employ critical path analysis in the following processes:

List down the activities and arrange them in the correct order to create furniture.

1. Utilise various options for the most critical routes.

2. Learning how long it takes to complete assignments.

3. Identification of the critical and non-critical paths.

4. Develop the flowchart to evaluate the relationship in the operations of production of furniture production.

 

Network planning: It is an ongoing process that involves planning the layout, constructing the network, and implementing it. It is required to decide how to run and utilise resources to achieve objectives (Mangla et al., 2019). The IKEA managers may implement network planning tools to determine issues in designing and manufacturing furniture products and services, depending on what the target customers require. Additionally, the manager will gather information, select means to forecast, and examine means that would enhance quality and save costs. In addition, network planning consists of maintaining good records of all activities and outcomes for tracking progress.

Requirements for planning and operating management

For IKEA furniture, planning and control are important to keep a balance between what the market needs and what resources are available to meet goals. The planning and control activities in furniture companies help create systems, procedures, and decisions that bring together different parts of demand and supply according to IKEA's goals (Pati et al., 2017). Additionally, planning and control include scheduling tasks, managing labour, capital input, and using resources and materials to produce the right quality and quantity of furniture. For IKEA, planning and control are necessary to predict the demand for specific and various furniture designs in different categories to keep activities running smoothly. Besides that, planning involves looking at market trends, developing new furniture designs to gain an edge, and reducing costs to increase profits. In this process, both short-term and long-term decisions are made by the project manager, keeping in mind the ability and demand for goods and services.

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Design of potential layouts for the production of the furniture and operational results

To control the activities and operations for designing furniture products and services, the IKEA management would employ a layout that maintains control of the outcomes while maintaining the activities in an efficient state (Camm et al., 2023). With this kind of layout, the IKEA manager will have the ability to learn and observe the distinct steps of designing and producing dressing tables from the firm.
 

 

 

 

The proposed design has been designed using Graph theory, which will enable the creation of the relation and identification of the process that would be used in the production of the dressing tables in different ranges, but in specific designs. The design structure will enable the comparison of the desired and actual output for products and services and the control of the activities (Ghahramani et al., 2024). The design will enable the optimisation of the sequence and the utilisation of the resources effectively in order to achieve the operational result. Through the addition of the comparison and monitoring of the activities, the IKEA manager will be able to achieve the desired result for the production of the dressing table.

Network plan and milestones for IKEA

To create the furniture products, the management of IKEA can adopt the following network plan, which will assist in the accomplishment of the deadline with regard to quality and design specifications prescribed according to international ISO standards (O'Regan and Dery, 2024). To manufacture the furniture product, the organisation will comprise the following activities:

A - Planning for activities

B - Considering alternative options

C - Design evaluation

D - List of raw materials

E - Distribution of resources

F - Production method

G - Quality control H - Controlling production

The time of each activity will be approximated compared to the other activities. The approximate time of each activity is illustrated in the table below.

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Table 1: Network activities
 

Tasks	Order to complete	Estimated time (Days)
A	Should be done first	2
B	Only start if A is completed	4
C	Could be initiated if A is done	2
D	Should be started if B and C are completed	5
E	Would be done as A is completed	3
F	Would be initiated if D and E are done	2
G	After completion of F	6
H	Can only start if G is done	4

 

Approaches would be used for quality control