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IKEA PRESENTATION FOR OPERATIONS MANAGEMENT

About the furniture company
by

Dian Pertiwi Sulistianingtyas

on 13 November 2014

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Transcript of IKEA PRESENTATION FOR OPERATIONS MANAGEMENT

1. Brian Krisna Yanrizky Rino
2. Dian Pertiwi Sulistianingtyas
3. Dewi Ristiassari
4. Emilija Narbuntaite

Presented By :
Ingvar Kamprad
1943
IKEA
I
ngvar
K
amprad
E
lmtaryd
A
gunnaryd
BED
$200
$79.99
IKEA Group
Stores Worldwide
The IKEA Group had a total
of 340
stores
in all over the world
Top 5 purchasing countries:
China 22%
Poland 18%
Italy 8%
Sweden 5%
Germany 4%
Company Background
Operation Management
Supply Chain Management
IKEA
target
Global middle class
Urbanities
Young Adults
Young married couples
A Swedish company
At first it only sells stationary, photo frames and small stuffs
After years of development, IKEA became a huge company selling furniture, housewares and food world wild
Has 312 stores in more than 40 countries
pioneered flat-pack design furniture

1950s
Furniture showroom opens in 1953

Designing flat pack furniture and self-assembly in 1956




The first IKEA store opens in Sweden in 1958
IKEA HISTORY
1920s-30s
Ingvar Kamprad was born in 1926
He start selling matches
and second-hand items.
(When he was 5 years old)
1940s
Founded in Sweden in 1943

Furniture is introduced into the IKEA range in 1948
1960s

The first IKEA restaurant opens in 1960

The first IKEA store outside Sweden in Norway in 1963

The largest IKEA store opens in 1965
1970s
IKEA arrives in Australia in 1975
in Austria in 1977
in Netherlands in 1979



1980s

IKEA FAMILY(Loyalty card) is launched
in 1984

A new president and CEO in 1986.
retires
New CEO
Anders Moberg
Ingvar Kamprad
adviser
1990s
The first environmental policy at IKEA in 1990
Swedwood – the industrial group of IKEA is founded in 1991

The IKEA web site is launched in 1997
IKEA forest projects is carried out in 1998



A new president and CEO in 1999
Anders Moberg
Anders Dahlvig
2000s
IKEA online shop is launched in 2000
IKEA Rail begins in 2001


The IKEA headquarters moves form Denmark to Netherlands
A new president and CEO in 2009
Mikael Ohlsson
Anders Dahlvig
BUSINESS PROCESS
(generating product availability data)
SALES & MARKETING
(AVAILABILITY OF PRODUCT)
SUPPLY CHAIN MANAGEMENT
(DO AVAILABILITY QUOTE)
PRODUCT AVAILABILITY DATA
GENERATED
CUSTOMERS
(PURCHASE GOODS)
SALES & MARKETING
(DO SALES ORDER)
SALES ORDER GENERATED
BUSINESS PROCESS
(order fulfillment process)
SUPPLY CHAIN MANAGEMENT
(REQUEST FOR GOODS)
SUPPLIER
(SHIPPING & DELIVERY)
IKEA RECEIVES
PRODUCTS
SALES & MARKETING
(FULFILLMENT OF ORDER)
SALES & MARKETING
(CONFIRMATION OF PAYMENT
DETAILS)
CUSTOMER RECEIVES
PRODUCT & RECEIPT
BUSINESS PROCESS
(generating inventory order)
Inventory order generated
Customer Purchases goods
Supply Chain Management
(Purchases inventory)
Sales and Marketing (do Sales order)
Sales order Generated
Ikea needs to restock on goods
Acquires data from different functional areas to provides information of their product and maintains inventory levels so as to incur as little costs as possible
Generates inventory orders to send it to Accounting and Finance
Information Systems
Decision Supporting System (DSS)
use DSS to help out its
Supply Chain Management in stocking issues
With DSS:
Number of forecasting reduced
Forecasting accuracy increase
Reducing stock levels and improves services
Cost benefits and offer reduced prices to its customers
Management Information System (MIS)
Bangkok
Singapore
China
Inter IKEA System
Using MIS:
Cost reduction in staff
and easy compilation of reports
Increase in productivity
&
New ideas and products
Leads to
Supply Chain Management System (SCMS)
SCMS shows:
Lead time from distribution center to retail stores
Which can
influence
Services level provided to the customers
The optimal inventory level of stock to help maximize cost efficiency
and its benefits to the business processes
One Distribution Center
A number of retail stores
Delivers to
Multi-Echelon Inventory System
Advanced Planning System
"Inter IKEA System"
College student
Six Sigma
Being the “IKEA Group and SSD Global, Inc Lean Six Sigma Project”, which was implemented during September 15, 2010, which was undertaken with the main objective of improving the process of online customer experience

People within the organization have been grouped as champions, yellow belts and green belts

Product improvement and development that is consumer driven

Optimization of the manufacturing and design goals, using technical innovation for price innovation

A series of lean six sigma projects, emphasis on shorter lead times achieved through reduced product development cycles and product life cycle management

Lean Operations at IKEA
Taking into consideration the variables for manufacturability, product function, and the convenience of product assembly, transport and packaging; in design for manufacturability (DFM) and design for logistics (DFL)

The concept of customer self-service, whereby the customers themselves are engaged in the collection, transportation and assembly of the furniture bought.

Working with cheapest suppliers of raw materials

Uses a flat organizational structure

IKEA Core Competencies and Competitiveness
IKEA
has a number of core competencies including low pricing, flat packaging, excellent quality and diverse functionality. The low cost business model used by IKEA provides it with a competitive advantage since it enables the firm to offer flat packaged furniture at relatively lower prices when compared to its competitors.

IKEA
Layout
Inside the store
free daycare centers with playgrounds and beepers
modern display technologies
furniture testing
large stores
characteristic yellow-blue logo
huge car parking
situated in the town
showroom entrance
Inside the store
restaurants
long natural way
Overall Assessment of IKEA’s use of Operational Management Concepts
It is evident from the above discussion that IKEA places a lot of emphasis on efficiency and effectiveness of business operations; as a result, the company has integrated operations management concepts in almost every business process and operation in order to sustain the low cost model.
Full transcript