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Diploma in Business
Unit Number and Title
Unit 16 Operations and Project Management – IKEA
Operation management is an area of management that is concerned with design, controlling and production as well as redesigning of the business operations of organization for manufacturing of goods and services. The term operation management is being majorly used for increasing the efficiency and effectiveness of planning the activities that have significant impact on the business process of organization. The Unit 16 Operations and Project Management Assignment IKEA will explain the importance of operation management for leading furniture company IKEA that is offering the high quality goods in wide range. Additionally, the report will discuss about the process model and information about the use of “Three Es” as well as the five performance objectives for managing the operations of IKEA. In the next part, report will explain the liner programming and analyze the critical path as well as the networking planning. IKEA is world largest furniture manufacturing and retailer organization that is operating business in different parts of world according to needs and demand of the customers. As of March 2016, IKEA owns 384 stores in 48 nations and offering more than 12000 products. In the next task report will produce the local area networking plan and identify the approaches that can be used for project management and quality control in sales, stock and purchase process.
Importance of operation management can be understood by taking case on IKEA Furniture. IKEA is a Swedish Company which sells appliances, furniture, home accessories. The aim of IKEA is to reduce wastage, and enhance productivity with low cost. At the store, the organization wants to utilize their warehouse properly, taking details of customers and deliver product with shifting cost is low. IKEA business make successful by managing such operations effectively. Operation management controls business operation of system. It mainly deals with design, and improvement of overall system. It supports organization to improve its financial performance. In case of IKEA, operation management observes activities to ensure and sustain efficiency and effectiveness (Ivarsson and Alvstam, 2010). Efficiency is considered important to achieve primary object i.e. maximize profitability. For this purpose, it identifies expertise human resource and other technical resource that reduce cost of operations. IKEA reduces cost by discarding less profitable cost projects. It uses maximum resources to achieve maximum output. The effectiveness and efficiency leads to productivity yield and improve capacity by utilization of resources that improve quality. It has been identified that operation management is playing important role in IKEA Company. Its control and coordination range is broad which include product evaluation, advertising, promotion, product development and distribution, sales and service.
Operation management is considered important for manufacturing industry. This is because manufacturing industries take care about so many processes and operations involved in manufacturing. The organisations generally start process from obtaining raw materials and then process in order to create goods. Therefore, successful execution of operation needs to include operation management especially for manufacturing industry. Apart from this service industry also include various process like assessment of customer expectation, take feedback of service etc (Edvardsson and Enquist, 2011).
The operation functions are series of process that are interdependent to each other and linked procedures. It consumes one or more resource as input at each stage. Operation functions depend on decisions and result. Strategic plans are designed according to future condition and demand. The operation functions of IKEA furniture are explained below:
Operational tasks of a business can be carried out easily with the proper balancing among 3E’s. Three E’s are- economy, efficiency and effectiveness.
Operation management can be defined as the process to design and manage the production of new products and restructure the business operations to meet requirements. Operation management includes four basic steps: inputs, transformation process, output and feedback. Operations carried out by IKEA to produce products are given to illustrate operation management of company.
This is the biggest challenge for IKEA Furniture to minimize cost and maximize quality also. IKEA wants to include such procedures and resources that minimize the cost of operation but does not decrease quality of goods. However, the achievement of double goals simultaneously is difficult task. Quality is the vital parameter for IKEA in order to sustain at the present position. But it has been analyzed that quality sustainability increase cost and time also. The quality of output expected by customers may result in increased expenses. On the other hand, some time cost minimization suffers from quality degradation. Lower quality of goods affects the brand image. It can decrease selling of goods also (Hirschey, 2016). Therefore it is very critical to handle both the parameters together- cost minimization and quality maximization. Although cost minimization is necessary to gain more profit on sales. It is also required to compete with other brands.
In order to provide more benefits to customers on sales and to sustain in market, company may balance the product cost and quality management in business where it can. IKEA needs to finds new ways to reduce the manufacturing cost of products. For that, company can buy a lot raw material with discounts to reduce the cost per product. To sustain the desired quality, supplementary inputs like human efforts can be replaced somewhat with electronic machines to reduce overall cost (Ajodhia, 2010). Management in company can find new places to develop and outsource the business so that cost in transportation and supply can be reduced. The effect of all activities will be reflected on products as minimization in cost with same quality. This would reduce tension at some extent.
For furniture organization, it is essential to have the knowledge about the performance objectives of operation management that would help manager to analyze the effectiveness of operations to meet the desired outcome:
Linear programming is the process that involve process and planning of managing the operations and make decision for establishing the tools and equipments according to needs and activities of organization. This process involves the mathematical concept for developing the plan. The management of IKEA could use this method for achieving the best outcome to maximize the profit by increasing the efficiency. This method adds value to the operational activities of IKEA by helping in determining the network flow; defining the engineering process and calculating the price and cost of each unit to make the decision for implementing the changes in the existing process (Mohammadi.et.al. 2014). In addition to this, to make the decision like purchasing of raw material the organization would use the linear programming which will help to forecast the production cost as well help to identify the areas of monitoring that minimize the cost and encourage the production of furniture.
Apart from that, linear programming will help the IKEA management to analyze the variation in the production process which will support to maintain the effectiveness in operational activities.
Critical path analysis is majorly used tool for operation and project management that helps to analysis of network and handle the complex and time-sensitive operations of organization. IKEA management could user the critical path analysis for following processes:
Network planning: This is an iterative process, encompassing topological design, network-synthesis and network realization that plays significant role to make decision for operational activities and utilization and arrangement of resources to achieve the goals and objectives (Akkerman.et.al. 2010). The management of IKEA could use the network planning tools for defining the problems in production and deigning of the furniture products and services according to needs of target customers. In addition to this, manager will perform the data acquisition, choice of forecasting and analysis of methods that could be beneficial for encourage the operational quality and minimization of cost. In addition to this, network planning includes the proper documentation of whole activities and results for monitoring.
For IKEA furniture, operational planning and control is important to maintain the balance between the market requirement and analysis of existing resources to meet the objectives. The operational planning and control activities of furniture organization helps to develop the system, procedure and decision that aid to bring various aspects of demand and supply together according to objective of IKEA (Niknam.et.al. 2011). Moreover, operational planning and control involve the scheduling of the tasks control on the activities of labour, capital input, use of resources and material to produce the desired quality as well quantity of furniture goods. For IKEA, operational planning and control is needed for forecasting the demand of particular as well various design of furniture in different category to maintain the activities. Apart from that operational planning involve the analysis of market trends, development of new design in furniture products to gain the competitive advantage as well minimization of cost to increase the profits. In this process short and long term both types of decision have been made by the project manager considering the capability and demand of goods and services.
For managing the operations and activities for production of furniture products and services the management of IKEA would use the following layout that will be helpful for managing the outcome and maintain the effectiveness of activities (Anderson.et.al. 2015). By using this design the manager of IKEA will able to analyze and monitor the specific process for developing and designing of dressing tables produced by the organization.
The proposed design has been developed using the Graph theory that helps to establish the relation and determination of process that would be used for producing the dressing tables in different range but in specific design. The layout of design will help to compare the actual and desired output for product and services as well manage the activities (Moghaddam.et.al. 2011). This design will support to optimize the sequence and make effective use of resources to meet the operational outcome. By including the comparison and monitoring of the tasks the IKEA manager will able to meet the outcome in efficient manner for development of dressing table.
In order to develop the furniture goods the management of IKEA could use the following network plan that will help to meet the deadline with the consideration of quality and design specification proposed according to international ISO standard (Ipeirotis.et.al. 2010). For producing the furniture product the organization will include the following activities:
The estimated time of each tasks would be depend on the other operations, following table will show the estimated time for each activity
Table 1: Network activities
Order to complete
Estimated time (Days)
Should be done first
Only start if A is completed
Could be initiate if A is done
Should be start if B and C is completed
Would be done as A is completed
Would be initiate if D and E are done
After completion of F
Can only start if G is done
Quality control and management is process by which organization identify the areas of lacking and issues that affecting the standard of production, sales and other activities. IKEA management could use the Total quality control and Six sigma approaches for managing and controlling the quality of furniture production. According to Total quality control process the each department of organization measure the utilization of resources and improve the control over the process (Ho.et.al. 2010). Total quality control is continues process that has been followed in each stage of furniture design and development.
From the above Unit 16 Operations and Project Management Assignment IKEA it is been considered that operation management is important approach and tool that helps to manage the organizational activities more efficient and controlled manners. Report has analyzed the functions of IKEA and evaluated the approach of company using the process model to understand the operational activity of organization. In the next part report has evaluated the significance of performance objectives for IKEA and explained the linear programming for planning and controlling of design and development process of furniture organization. Moreover, report has design and discussed the possible layouts.
Books and journals
Ajodhia, V., 2010. Integrated cost and quality benchmarking for electricity distribution using DEA. International Journal of Energy Sector Management,4(3), pp.417-433.
Akkerman, R., Farahani, P. and Grunow, M., 2010. Quality, safety and sustainability in food distribution: a review of quantitative operations management approaches and challenges. Or Spectrum, 32(4), pp.863-904.
Anderson, D.R., Sweeney, D.J., Williams, T.A., Camm, J.D. and Cochran, J.J., 2015. An introduction to management science: quantitative approaches to decision making. Cengage learning.
Berger-Walliser, G. and Shrivastava, P., 2014. Beyond Compliance: Sustainable Development, Business, and Proactive Law. Geo. J. Int'l L., 46, p.417.
Edvardsson, B. and Enquist, B., 2011. The service excellence and innovation model: lessons from IKEA and other service frontiers. Total Quality Management & Business Excellence, 22(5), pp.535-551.
Hill, A. and Hill, T., 2012. Operations management. Palgrave Macmillan.
Hirschey, M., 2016. Managerial Economics. Cengage Learning.
Ho, W., Xu, X. and Dey, P.K., 2010. Multi-criteria decision making approaches for supplier evaluation and selection: A literature review.European Journal of Operational Research, 202(1), pp.16-24.
Ipeirotis, P.G., Provost, F. and Wang, J., 2010, July. Quality management on amazon mechanical turk. In Proceedings of the ACM SIGKDD workshop on human computation (pp. 64-67). ACM.
Ivarsson, I. and Alvstam, C.G., 2010. Supplier upgrading in the home-furnishing value chain: an empirical study of IKEA’s sourcing in China and South East Asia. World Development, 38(11), pp.1575-1587.
The Unit 16 Operations and Project Management Assignment IKEA will explain the importance of operation management for leading furniture company IKEA that is offering the high quality goods in wide range, We are posting Locus units solutions so scholars can explore the our Assignment Help in UK and get review the quality of our work.