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Operations Management.

A. Knowledge and understanding:

1) Describe how Operations Management, in manufacturing, service, private, public and voluntary

sectors, fits within the overall organization and with other functions.

B. Intellectual skills:

1) Outline the strategic role of Operations Management.

2) Describe the main layout types and their alternatives within the operations function.
3) Understand the factors that contribute to good process design.

4) Understand the importance of materials and supply chain management to ensure effective

Operations Management.

5) Describe the development of quality management within an organizational context.
6) Appreciate the role of performance measurement and improvement within the operations


7) Apply operations concepts and techniques to address real operations problems.

C. Practical skills

1) Apply a number of decision-making tools to problems faced by managers of an operation
2) Apply operations concepts and techniques to address real operations problems.

D. Transferable skills and personal qualities.
1) Know how to access journal articles on-line.

Operations Management: 2

Processes in an organisation provide ways through which inputs are transformed into
outputs. Primarily, the outputs and inputs of organization’s process include people,
information, and materials. Processes also offer a way of carrying out an intermediate and
convenient level of analysis. Therefore, a process perspective provides important integration
which ensures that workplace realities are explicitly linked to an organisation’s overall
functioning. In this dimension, the work process perspective leads to various essential
insights for managers. A primary insight is the provision of useful frameworks for
confronting common organizational issues (David and Paul 2010). This could be the absence
of cross functional integration or fragmentation which could be solved by application of
appropriate managerial actions. Through process perspective approaches, organizations can
also identify new targets or sections for improvement. Therefore, managers can avoid
focusing entirely on roles and structures but they should address and solve any existing issues
with the underlying processes. However, despite the advantages of adopting process
perspective approaches in organization management, failure cloud also come by especially
when they is a great focus on process redesigning. There are perceptions on organisational
process perspective and many theories to it. However, this paper will evaluate the process at
IKEA with close reference to how operations management at the firm ensures efficient
application of various process at the company.
The Company
IKEA is a Swedish firm that makes furniture. The company is considered to be a giant
in the furniture industry because of the large market share it has as compared to its

Operations Management: 3
competitors (Didraga, 2012). Since its inception in 1943, IKEA has been able to grow
steadily in the furniture business in different settings and business environments. This success
has been attributed to the various processes and strategies that have been put in place by the
firm. Boasting of a presence in 43 countries and 155,000 employees, IKEA is indeed a large
organisations with strict strategic process.
The firm has various sections in which different processes are carried out. The
common processes carried out at the firm include communication processes, organizational
learning processes, work processes, and behavioural processes.

The primary way of ensuring that the processes are going as planned is through
monitoring and controlling (Engwall, 2012). The monitoring sections are composed in the
quality monitoring and assurance sections. As a matter of fact, their operations are closely
related to the quality assurance programs and are carried out using the same techniques. This
is because attainment of quality is the overall objective of the management team. Moreover,
quality products can only be achieved if the activities that lead to production are carried out
in an efficient way. Therefore, there are sections within each of IKEA’s departments that

Operations Management: 4
monitors the quality of operations carried out. Each sections has to ensure minimum
deviation from the accepted procedure. However, there is a difference in the activities
handled by each section: they are unique to itself. For instance, operations management
involves direct monitoring of the production process to ensure that the quantity of products
derived from specific raw materials is within the acceptable proportions while the quality is
not compromised (Whittington, Angwin and Regnér 2014). On the other hand, operations
management of sales related activities involves establishing factors that will lead to high
number of sales with minimum inventory so as to ensure high profitability. Moreover,
product prices and customer satisfaction are counterchecked.
Types of processes at IKEA

The organisation has an established reporting strategy that helps in achieving
efficient operations management. As per the strategy, individuals at a certain lower level

Operations Management: 5
regarding the organisational hierarchy are expected to report to those above them about the
daily operations of the company. This reporting forms an important source of information for
the firm’s administrators. It helps in understanding the way operations are occurring at the
company. The reports end up at the senior most management of the organisation. IKEA has a
management team that comprises of individuals from various sections who oversee the
executions of company strategies (Ali, et al. 2012). Individual company sections report to this
management team which evaluates and confirms if they are operating in line with the stated
procedures and if their operation standards are at the right level. In addition, the management
works closely with the quality assurance department which regulates if the quality of
operations is fine or if it needs modifications.
Roles of Operation Management as a Process Perspective Theory at IKEA
At IKEA, operation management is vital for the management. This is because it forms
the basis upon which various processes operate on. For instance, it dictates the size of
manufacturing plants that IKEA sets up. This can be exemplified by the situation of the
organisation in China; there the processes are not carried out on a large scale is it is expected
because of the large market in the country, however, IKEA China produces products which
they are sure to sell within a certain timeframe (Cloutier et.al 2015). Therefore, their
manufacturing capacity is dictated by the processes that are set to take place there and not the
size of market provide for (Nigel, Alistair & Robert 2013a). In addition to that, IKEA uses
operations management to establish efficient project management techniques. This occurs
because project managers are able to identify efficient processes from the experiences of the
operation mangers and adopt them. Operation management also helps in setting up the
structures for information technology networks. This is based on the efficiencies required
regarding communication and the level of technology to be adopted by the firm. Lastly,
IKEA uses operation management to solve various strategic issues. This issues mostly

Operations Management: 6
include monitoring of the levels of inventory and handling of matters related to quality
control (Engwall, 2012). Primarily, this is achieved through use of the economic order
quantity formulae. This an economic formulae that is used to evaluate the quantity of
inventory to hold on to or that to process.
Layout of operations management within IKEA’S Processes.
The firm has organised its operations around four important variable segments. These
are inbound logistics, services, operations, and sales and marketing. The management of
these segments is monitored through observation that is later recorded and reported.
Moreover the activities done are expected to follow certain set procedure and the deviation
from these procedures is interpreted as inefficiency. The firm has well established inbound
logistics which is tasked with managing approximately ten thousand products. These goods
are produced by over two thousand suppliers and then they are transferred to various IKEA
outlets. (Didraga, 2012). The firm has efficient reporting and recording systems that allows
employees in their 208 outlets to key in their daily business dealings. This information can
then be accessed from the mother outlet and the management which is situated in China. It is
then cross checked against the set standards. Moreover, deficit in operations is sorted out by
franchising. This helps save costs while increasing the number of sales.
Important features of IKEA process management.
There are specific features within IKEA operations management that make it efficient
in serving the company. The first factor is the level of knowledge and skills possessed by
IKEA operation managers. The firm has a recruitment policy that allows only individuals
who have nine years’ experience working for the company to become process managers.
This means that the team responsible for operations management has vast experience with the
operations of the company. Moreover, the individuals selected to be operation managers are

Operations Management: 7
not selected based on their working experience only, however, their productivity while
working for the company is also evaluated. This is in line with Theodore’s (2014) argument.
According to him, productivity and organisation are the most vital drivers for an operations
manager. Moreover, one has to be flexible and versatile. Therefore, the skill levels of the
operations mangers at IKEA gives them the ability to efficiently carry out the process of
coordinating activities effectively. In addition to that, they are able to develop new techniques
and processes by basing on the re-evaluation of the current IKEA structures (Suriyamathi,
Velavan & Radhiga 2013). For instance, the adoption of the focus generic strategy in the
Chinese market allows the firm to meet specific needs of particular portions of its clients.
This helps it to sell more than other Chinese retailers. This and other various strategies were
established by the operation management team and it demonstrates their ability in
understanding different IKEA business environments.
Operations management processes and production
Production is directly affected by supply chains and delivery management. Regarding
supply chain management, operations management processes serves a critical part of
managing the inventory. This is achieved through proper understanding of current business
environment trends, existing resources, and customer needs (Sunday Business Post 2011). In
this regard, IKEA operations management acquires materials for the firm and designs
methods by which the materials are converted into furniture in a cost effective way while still
being able to meet the exceptions of the customers. This also means that operations
management helps find venders who supply the firm, with the right goods at appropriate
prices whenever demand for them arises. Regarding delivery management, operation
management ensures that customers receive goods within the set time and that the quality of
the products is not affected by the delivery process (Huang 2010). IKEA has about 27 supply
chains through which the operation management team transports goods and follows up on

Operations Management: 8
customers to ensure that the products are received in good quality and meets all the customer
needs including functionality. Moreover, operations management does acquire feedback from
clients regarding their experience with IKEA. This feedback is then brought to the company
and used in process management by different departments.
Performance measurement of IKEA’s process perspectives
Performance measurement refers to the process of collecting, evaluating, and
analysing informs about an organisation (Nigel, Alistair & Robert 2013a). This means that
performance management helps ascertain the effectiveness of a process. Therefore, it can be
used to understand the efficiency at which process perspective approaches are being carried
out. At IKEA, performance measurement helps enhance the process’s being carried out
(Engwall 2012). This is achieved through evaluating the efficiency with which the
manufacturing processes are carried out and informing the operation managers if the process
will result in gains for the company or losses. Primarily, performance measurement is carried
out using models. This models evaluate various company features and ascertain their
effectiveness in achieving the set organisational targets. The performance model used by
IKEA is shown below.

Operations Management: 9

Source: Theodore, J 2014, the Importance of Imbedding the Concept of Continuous
Development in the Formulation of Global Strategies.
Quality is important for businesses as it ensures that the products produced suit the
needs of the customers. However, to ensure that an organisation produces products that are of
optimal quality, there are some systems that have to be in place to facilitate it. These are
programs referred to as quality management systems. At IKEA, quality is not managed at the
master apprentice level only, however it is applied to all individual process that lead to
production of goods and services (Jafari et.al 2015). To ensure that this is maintained, the
firm has established its own quality standards that have to be attained. The standards contain
structures, responsibilities, and processes that are needed so as to achieve effective quality
management. IKEA uses the lean quality management system (Didraga 2012). Therefore, the
firm relies on innovation adapting and knowledge enhancement. In this arrangement, the firm

Operations Management: 10
ensures that the established quality standards are followed and in addition to that, new
innovations are applied on products after a careful study and understanding (Jay & Barry
2013). Moreover, the firm has established research and development programs that are meant
to enhance the skills of the employees and be able to raise their effectiveness.
The discussions above shows how important process management is to a firm. The
use of IKEA shows how various organisational facets can be tackled in a process perspective
to help cut wastages and increase profits. However, it is important to note that adapting
process perspective such as variation in an operation management strategy should not involve
complete redesigning of the current systems as this could lead to failure. Therefore, a
company should carefully asses the areas that need to be improved and take a better approach
of enhancing it in the best way possible. Also, it is apparent that process perspective
management is closely related to quality. Therefore, development of quality management
systems should be based on the established process standards.

Operations Management: 11

References List

Ali, M et al. 2012, Developing environmental impact statement (EIS) guidelines for the
management of environmental quality at major projects in Kuwait,

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