Why IKEAs Operations Model Is So Successful

Operations management is an essential part of the Swedish furniture company IKEAs success. Its management systems have enabled the company to offer more than 9,500 products at competitive prices as it has grown over nearly eight decades. IKEAs reputation has rested on its efficient and effective management of: Product and process design, Inventory, Quality assurance, Supply chain networks and Back-end operations. These management systems have made the company the highest-valued retail furniture brand that has been exemplary in management and business textbooks worldwide. As an innovative leader of successful management practices, IKEA represents what effective operations management can do for a business or organization. IKEAs Operational Model Since its inception in Sweden in 1943, IKEA has offered affordable, high-quality furniture to the masses. Today, IKEA is the largest and most valuable furniture retail chain globally, with over 400 locations operating in 52 countries. From the comfortable showrooms navigating customers through a labyrinth of product displays to the innovative thinking that created flat packing and ready-to-assemble furniture, IKEAs success relies on efficient and effective operational management solutions. Through tight control over operational efficiencies in the design, production, supply chain, anddistribution processes, IKEA has been able to keep consumer and manufacturing costs low while growing the company on a world stage. IKEA perfectly demonstrates the power and significance of operational management systems to elevate a business and optimize its workflows.

Q.2.1 Provide a brief description of the organisation IKEA. (5)

Q.2.2 There are 10 strategic operations management decisions that must be communicated throughout the organisation. Critically examine the importance of managing quality and inventory management for IKEA. (10)

Q.2.3 Argue how globalisation and the fourth industrial revolution could pose to be a challenge in operations management for IKEA. (10)