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Ikea-ERP Management Information Systems - Essay Example

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This research will begin with the statement that Enterprise Resource Planning (ERP) has led to incredible efficiencies and advantages in the operations of businesses. IKEA implements ERP systems easily because it is a financially stable business organization…
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Ikea-ERP Management Information Systems
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Download file to see previous pages It is evidently clear from the discussion that IKEA leads in the world as a furniture retailer dealing with home appliances, ready-to-assemble furniture and accessories. The company has over 313 stores and operates in more than thirty-eight countries. IKEA launched a project aimed at introducing a Geographical Information System (GIS) into the wood sourcing system of the company in the year 2007. The problems that the GIS aimed to solve involved; availability of forest resource data on sub-country resource level, and region of origin in wood tracing. Using the GIS, the company could solve problems by getting the data, inputting into computers and storing them for reference and retrieval by the managers and other workers interested in using them. Implementation of the GIS by IKEA The company developed a forest tracing system for the regions of origin. According to IKEA, the region of origin referred to a unit of the territorial division of a country, which the company suppliers referenced in the declarations of wood origin. The territory, in this case, was a forest management unit or had an administrative status. The company failed in the implementation of the system in that there was no clear definition of boundaries of the territories. In addition, the company’s forestry policy implementation failed due to lack of clear characteristics of the territorial divisions chosen. There was not enough information about the forest resources of the territories leading to failure in the implementation of the system. If the units were smaller than they are, data management would have been easy. However, as we have seen, the company used large areas and thus the territories were large. This made reporting from such units irrelevant and reduction in the credibility of doing so. In this case, the suppliers had problems in using the division structure to separate wood flows. Furthermore, there was a large variation in territorial sizes in both territorial division units and territorial divisions of a country. The forest resource, data availability at regional levels should be according to tree species groups or tree species. However, the company failed to implement the system according to this criterion. There was a lack of crucial statistical information such as growing stock and cuttings in some cases. For example, Romania had no reliable data giving the growing stock in the region. These problems, therefore, lead to generalizations. For instance, the data on three groups rather than on individual tree species leads to complete uncertainty and thus difficulties in using GIS successfully. The GIS functionality According to the IKEA Company, there could be three users of the GIS. These users include the forestry staff, suppliers and buyers. The forest staff was to use the technology in the following ways: 1. Entering, visualizing and editing the data of forest tracing system and that of wood procurement planning 2. Performing risk assessment at the regional level defined for the purposes of audit planning 3. Obtaining summaries of the wood volume from wood procurement planning and forest tracing data 4. Exporting and saving tables, maps, wood procurement planning, and forest tracing data. ...Download file to see next pagesRead More
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