ANALYSIS AND RECOMMENDATORY ACTIONS

OF IKEA
Raefah Amerol, Nathaniel Dela Cruz, Jonaima Hadji Azis, Nahara Omar, Mohammad Shuraim Mamainte
BS Accountancy
Masters Technological Institute of Mindanao

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1.0 Introduction the organisation to achieve small and incremental changes for the
IKEA Group is a Swedish based multi-national group of improvement of efficiency and quality of the organisation. The concept
companies that designs and sells ready to assemble furniture, home of lean management is mainly focused on the manufacturing companies
accessories and appliances. IKEA’s philosophy goes back to the original
that contribute to the lean production of the company. The lean
business, started in the 1950’s in Sweden by Ingvar Kamprad. IKEA is
known as one of the most successful furniture retailer in the world that production is the systematic method that contributes to the minimisation
owns and operates 276 stores in 36 countries . The Swedish company of waste within the manufacturing companies without affecting the
applied Operations Management as its part of success. Operation productivity of the company. The lean methodology used realistic and
Management is one of consider as central to the organization to be able proven tools and techniques that help in systematically identifying the
to make good use of its resources and to improve the overall varied types of wastes involved in the business and eliminate the wastes
productivity. to increase the productivity of the manufacturing companies (Bortolotti,
Boscari and Danese, 2015).
IKEA Operation Management reflect with its relationship with
its corporate strategy by exhibiting strategic operations management,
processes ,supply chain planning, and control. IKEA definitely 5.0 Corrective Actions in the Present
transformed and developed with innovation turns into a profitable and
successful. IKEA shows their creativity and operations including the idea Although the company incorporates lean management practices in its
of selling, stores designs and providing entertainment such supervised
organisational management, some significant steps are recommended for
children’s playing area, small cinema, parent and baby room and many
more to ensure the customers satisfaction. IKEA was being responsive to the company to further improve the lean management process in the
regarding with the management problems through launched a manufacturing process of the company. The recommendations included
programmed ‘designing out’ the bottlenecks. in the lean management involves focusing of long term results of the
lean practices in the manufacturing industries. The company must
Their Passion combines designs, low prices economical use of involve proper rules, techniques and principles to achieve the economic
resources and responsible for people for doing good business. Anyone
growth of the company. Moreover, the company should also provide the
can make their own good quality product but to make a good product
needs to develop methods ,innovation, quality management. The success tools and equipments that are beneficial for the company to increase the
of IKEA is because satisfying market is their top priority and Operations rate of productivity of manufacturing. In order to develop the market
management is a vital part of IKEA’s success that is one of the reasons growth of the company, IKEA should involve the contribution of the
why IKEA well know global brand with hundred stores across the world. employees in every aspects of the manufacturing process and also in the
decision making of the company (Panwar et al, 2015).
2. 0 Symptoms of the Problem
6.0 Conclusion
Symptom 1 Overseas Operaions. Since IKEA is continuously expanding IKEA tries to find effective ways to manufacture its products
overseas, operations entails greater costs particularly on the shipment of by making more products by using less material. Lean management is an
products from their factories. Prices of their products will increase organisational approach that contributes to the continuous improvement
compared to the prices in their head office. Costs incurred to operate
of IKEA. The benefits of practising lean management in IKEA are the
will be added to the product pricing which will be costly.
reduction in cost, increase in efficiency, reduction of Manpower, the
Symptom 2 Organizational Issues. IKEA is facing many organisational total involvement of the company, improvement in the morale of the
issues in last couple of years. The most important of all is in offering employees, increase in productivity, increase in customer satisfaction
technological support to the entire structure of globally spread supply and environmentally friendly
chain of the company (IKEA (2015 c). Albarrak (2011) noted that issues
of price gouging, as in Canada, and various labour issues noted against
IKEA are actually the result of lack of transparency within the
organisational setup. This element of transparency remained limited for
IKEA, as it is yet to accept worldwide technological support for better
functioning of the corporation. Business Case Studies (2015) too notes
specifically that though IKEA is already using many kinds of
technological supports to its organisational functionalities, yet the
company actually need to upgrade the same as per current advancement.
Lack of technological advances is creating hurdles in the supply chain
management of the company and thus the issues related to pricing, and
quality delivery is getting at stake.

3.0 Problem
With the current stand point of the organization, it implies the
organizational issues affects the operations of the business. It is
important there is transparency within the organizational set up

4.0 Corrective Actions in the Past

Lean management is an organisational approach that contributes to the

continuous improvement of the organisation. Moreover, the practices of
lean management also support a long-term approach for the working of

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