I am taking Business Management at Strayer University and working on Assignment 2. I have almost completed the paper and am working on problem 5 of the paper. I have attached the directions of the pap

The IKEA Group, A New Operations Strategy Part Two

Jonathan P. Lego

Course: Operations Management– MAT 510

Professor: Dr. Phyllis Parise

Strayer University

The IKEA Product Life Cycle

The IKEA Group brand has been in existence for many years and many improvements have been developed since the inception of the company. However, issues continue to be present within the IKEA Group’s product life cycle. Three such issues that should be addressed within the organization are product quality, client consultation and product trouble shooting. The IKEA Group has consistently had quality issues since the company was founded.

The IKEA Group boast about their recycling efforts, nevertheless, they produce products that last a short time and need to be replaced causing a greater carbon deficit in the long run. Client consultation is another issue that needs to be addressed within the IKEA Group. Due to the IKEA Group’s unique and socially responsible business plan, many clients who are involved in the product life cycle are not considered for consultation when making improvements. A separate yet indirectly connected issue to client consultation is trouble shooting. The IKEA Group has a deficient method for handling product life cycle crisis situations. Often the customer in not notified till late in the process and the organization scrambles to rectify a deviation in the product’s life cycle plan.

In order to implement a new product design, a common theme of customer dissatisfaction must be identified. Three major complaints in relation to The IKEA Group’s life cycle is the inconvenience of assembling much of the furniture, the lack of quality and lack of customer service during the purchasing process. With these three issues in mind, a new product design can be implemented. The new product design will have a new department handling product’s life cycle crisis situations and a greater emphasis on product quality. The new product selection will emphasize a stronger customer service/assistance presence.

Product Design:

• Idea Development – Stronger quality with slight increase in purchase price of selected items.

• Product Screening – Contacting customers and clients for input contributing to greater customer satisfaction, as well as constructing a system for plan deviation.

• Preliminary Design and Testing – Build a prototype of a product using greater quality products which is tested and refined.

• Final Design – Implementing all factors including greater quality products, a deviation plan and a stronger customer service/assistance presence.

Product Selection:

• A more vibrant packaging plan will be implemented to attract customers to the products which have a greater Return on Investment (ROI).

• Products will be constructed in a packaging system that will be easier to assemble and transport.

Supply Chain Management

The IKEA Group has one of the most efficient and best supply chains in the world. However, potential products need to be assessed for affordability, sustainability and function. Systems already in place use products which will be designed for maximum efficiency using science and technology. Trees harvested from local forest are brought to the factory and made into products. Next, products are taken to test labs to make sure they meet required specifications. Finally, products are globally shipped to stores.

There are major issues that could affect the structuring, sourcing, purchasing and the supply chain of The IKEA Group. Issues that affect the structuring of the organizations are factors such as crisis situations and deviation from the product cycle. These deviations can be catastrophic to the structural integrity of the company. Deviations consist of products getting lost, stolen or damaged during transport and no system in place to correct it. Often times a company simply starts a new order without diagnosing the problem.

Having sustainable products is crucial to renewable sourcing. Having forests that are also sustainable is imperative to the wellbeing of The IKEA Group. The majority of The IKEA Group’s product are made from the lumber it derives from various forest. Drought, disease and over harvesting can devastate the life blood of this furniture retailer. Careful attention to forest maintenance and giving appropriate usage measurements is paramount to suppliers and a healthy relationship.

The IKEA Group total quality management enforces suppliers to comply with set IKEA quality standards. These quality standards are imperative to the integrity of the product, brand name, target market and the general reputation of the company. A code of conduct is designed to evaluate and check regulation of suppliers. Suppliers are known to cut corners at times causing a sacrifice of quality and performance of the product. It is imperative to have a clear vision of having a positive impact on clients, employees and the IKEA Group environment. The production method will be that of a flat pack design to accommodate customers. It is crucial to have a focus on eliminating waste through design and recycling.

Total Quality Management Tool

By developing a flow chart, future issues will be identified and analyzed to avoid problematic situations. This flow chart will show the overall picture of the operations process and give a detailed look at key factors that are possible causing issues. A flow chart was selected from the other total quality tools due to its broad perspective and general usability.

Consumer

Retailer

Distribution

Manufacturing

Raw Materials

Uses raw materials like oils, lumber and minerals from forest and various suppliers

Consumer receives final product

All services needed for end of the road systems including retailing, online ordering, distribution and customer service

Builds goods from raw materials to develop products for customers

This flow chart shows that The IKEA Group may have future room for opportunity in regards to having a more comprehensive system dealing with distribution and retail development. Furthermore, these systems may need additional boxes within the flow chart to accommodate issues that may develop.

The current Just in Time philosophy at the IKEA Group states that all products are not stored at the store level and multiple warehouses ship products directly to customer homes. The philosophy also states that all facets work together to cut cost and shorten time frames. Lastly, Information Technology plays a crucial role in its development and operation. Three advantages of continuing this philosophy within The IKEA Group are as follows:

1. It provides timely delivery of products

2. The system improves as time passes and becomes more efficient

3. The system cuts cost in areas of transport, storage and packaging

4. The operation promotes efficiency and a recycle/green environment

References

IKEA Group. (2015). IKEA Group, 1-18.

The IKEA Group. (2018, January 22). IKEA.com - International homepage. Retrieved from http://www.ikea.com

IKEA. (2012). Ten Consecutive Years of Revenue Growth. IKEA Case Study, 1-13.

IKEA. (2018). IKEA Continues to Strengthen Distribution Network with New Facility in Staten Island, NY.

Mangla, I. S. (2008). An IKEA Field Guide. Money, 37(8), 136-137.

SWOT Analysis. (2010). IKEA Group SWOT Analysis, 1-9.