Control Processes of IKEA - Essay Example

Control Processes of IKEA Introduction: Due to globalization, many companies are finding it hard to be innovative and cost effective at the same time but IKEA has managed to do it well as they have captured the market with their innovative products and services. There are several customer oriented processes which are being followed in IKEA. The major reason of IKEA’s success is the fact that they successfully translate customer requirement into products. Through total quality management, standardized production is ensured. Total Quality management and other control techniques have a direct impact on personal and professional life of the people who get used to this drill. Control processes of IKEA A business comprises of different processes which are involved in manufacturing the products and services. All these processes are easy to design but harder to control when it comes to a streamline them in order to reach the end product. For this reason, the domain of operations management has been introduced which deals with overseeing, designing and redesigning of business operations in the manufacturing of the services or products. The basic aim of the operations management is to ensure that every business process is using the resources efficiently along with meeting the needs of the customers. IKEA has launched the modern furniture line which has taken the market since 1948. Since then, they have expanded their business throughout the world with an excellent control on the processes worldwide (Sanders and Reid, 2009). Following are some of the most important fundamental manufacturing process of IKEA: Developing end products by establishing customer requirements: IKEA established customer requirements before developing a product. IKEA does not only rely on the surveys for establishing the customer requirements but it has developed a marketing department which extracts the opinions from customers to use in the development of the products. Two aspects are analyzed the marketing department of IKEA to develop the extract the customer requirements: 1) IKEA looks for the customer experience with a particular product. The time period for which the customer makes use of the certain product with certain attributes helps the customer requirements process. 2) IKEA also consider the opinions of people using different brands in the same industry as it helps in launching and producing something new for the customers. 3) Aggressive approach like direct selling is also being used which helps in attaining the spontaneous feedbacks. 4) Advertising is also being carried out which is again the job of marketing department (Sanders and Reid, 2009). Translation of customer requirements into products Along with establishing customer requirements, IKEA also translates the needs into actual products. By following innovation, IKEA has been able to launch a wide range of product line which might lead the company to drift from the actual requirements of the customers. For this sake, IKEA has prepared a product planning framework. Based on this framework, IKEA has developed a concept of IKEA Range which helps in producing low products with effective methods of production (Russell and Taylor, 2010). Four basic factors are considered in this translation process: 1) Profile 2) Design 3) Strategy 4)Functionality IKEA store design IKEA has taken the major furniture market due to its designer stores which are developed on the abstract of a real home. The real home and rooms inspires the customers that help them in choosing and purchasing the right products. The customers can check the drawers and other products to give a real feel. How to develop these control systems “The first step in organizational design is job design, the process by which managers decide how to divide into specific jobs the tasks that have to be performed to provide customers with goods and services” (Jones and George, 2010). Developing a process considering the requirements of customers is one aspect of the business operations. The second major aspect to develop and follow is the development of control systems in each of these processes. Streamlining the business process and controls is not very easy when a business has expanded like IKEA. IKEA uses several different concepts, methods and theories to develop the control systems in every business process (Russell and Taylor, 2010). Here are few of its approaches: Total quality management: Total Quality Management is by far a wide concept that does not only involve the production and manufacturing of good quality products but also ensures the delivery of these products to its customers on time with overcoming the shortage factor. under the TQM head, IKEA has a following approach: 1) Purchasing practices 2) Management and function coordination 3) Quality management 4) Inventory management 5) Transportation and logistics management 6) Configuration management, facilities management, and enterprise resource planning and distribution channels (Malhotra et al. 2009). In addition to Total Quality Management, IKEA has developed the centralized and decentralized processes as well: Centralize process: Centralize process is a situation in which different processes from different branches and stores of a company perform the processes consistently along with following the global processes. Decentralized process: Whereas in decentralized process, each branch performs the processes in its own autonomy and given capacity. However the branch will have to follow the main strategy of the company. If you see the structure of IKEA, it clearly indicates that is functioning in two parts comprising of franchising and operations. 1) The major functions and operations of IKEA that include the management of IKEA’s design, production factories, stores worldwide and supplies purchasing are managed and carried out by the mother company INGKA Holding. INGKA managed 265 stores in 36 countries with 30 stores being managed by franchises that are outside the INGKA Holdings. 2) INGKA itself is not only owned by single owners but it is owned by Stitching INGKA Foundation which is a non-profit organization and is being managed by 5 members (Malhotra et al. 2009). By these two distinctive segregations, the IKEA is managing its operations and processes globally. Impact of these controls on personal and professional life Our personal life is dominated by certain norms, rules and processes that are to be followed in any case. Same is the situation when it comes to an organization with certain processes, controls and norms. In the professional capacity, control like TQM helps in streamlining the processes and functions in a very comprehensive way. By following the total quality management techniques and tools, an employee or employer cannot miss on any function or tiny bit of input. Everything is right in front of you with detailed description and processes which makes it easier for both employee and employer to follow (Render and Heizer, 2010). Similar is the case with concept like JIT. Although it sounds and feels more mechanical but it can help the employee and employer to deal or avoid any urgent situation. The Just-in-Time helps in reducing the multiple activities and contributions which are only prolonging the processes and keeping the staff lingered on for no apparent reasons. Benchmarking is something which not only helps in the professional life but also personal. When you have certain benchmarks to achieve in your working capacity, you draw your time and resources available in a very calculated manner to get things done in the best possible way. This helps you continue your professional dealing without compromising on your personal life as you would be following a certain pattern to control things. This is workable for both employers and employees as they will know what has been achieved and what needs to be achieved in a certain project. You can also use the benchmarking aspect in your personal life to draw lines and limitations on your living and dealing with people around. Outsourcing is something extremely professional which can be manipulated in terms of delegating authorities to your subordinates. The subordinates will be able to manage things which need micromanaging when it comes to employer dealing with them. The micromanagement issues and other small activities can be delegated to the staff of the organization or outsourced. This will help the staff to focus on one thing at a time with more composure which will lead to more efficient performance in different business aspects (Render and Heizer, 2010). Centralization and decentralization are the concepts that work together ideally. By handling few unites of business and lending the others to franchise or companies could do wonders as it would shed the load and delegate the responsibilities in a distributed pattern. The personal life of staff will be much easier with distributed work pattern as it would shed the extra burden they are carrying. Quality management in operations When a company decides to expand its business, it automatically decides the enhancement of quality of its services and products. This will require the quality enhancement of its processes and operations as well. Maintaining a quality in the operations and processes include several factors like: 1) Strategic commitment 2) Technology 3) Employee involvement 4) Materials 5) Methods The management can use many tools and techniques regarding the quality management for improving and sustaining the long term quality. Among the various tools, following are the most common and popular which are being used by IKEA all around the world: 1) Value added analysis 2) Outsourcing 3) Benchmarking 4) Reducing time cycles 5) Statistical quality control 6) Six Sigma Value added analysis: Value added analysis is the comprehensive evaluation of materials flows, work activities and paperwork to analyze and predict the value which all these components are adding to the products. This analysis helps the organization to determine and reveal unnecessary and wasteful activities that once removed will not jeopardize the product and customer satisfaction. Outsourcing: Another popular method to increase the quality of the processes is outsourcing. Outsourcing is a method by which the company subcontracts the operations and services to other firms that can perform those particular functions in a better and cheaper way. If the organization is managing all the administrative and other business and service operations, it might be doing something inefficiently which will give a room for competitors to hit on. Benchmarking: Benchmarking is a process through which you can know how other firms are doing exceptionally well and in high quality manner. IKEA develops the benchmarks for every department and process which needs to be followed in the product development. The company then matches the actual performance with the benchmark to evaluate any gaps or inefficiencies. Reducing cycle time: Cycle time is the time required or taken by the company to make, develop and distribute the product to the end customers. The quality of the process is judged by its cycle time. If the cycle time is more than required, it indicates that some invaluable processes are being carried out which are adding to the cost and delay of the process. (Karshenas and Haber, 1990). Statistical quality control: Another quality control for processes is statistical quality control system. The statistical controls and techniques help in determining the process quality. The deviation from the certain stats will indicate that some problems are hindering the manufacturing and other processes. Six Sigma: Although Six Sigma are rarely adopted by companies but it holds the significance in process improvement as it provides many challenging targets. Six Sigma consists of a process of correctness until the errors disappear virtually. Conclusion: When it comes to different operation processes in IKEA, one this is pretty evident that they develop most of their processes around the customers and consider the demand and opinions of their customers pivotal to their business and its expansion. The concept of Total Quality Management has been introduced in every business process and department in IKEA. The TQM makes an important part of marketing and customer services aspects which are the major processes of IKEA. . In a big organization like IKEA, the controls over processes and other activities seem more like mechanical but following them not only helps the professional accomplishments but the personal life of the employees can be at peace due to a perfectly designed processes to be followed. Benchmarking, six sigma analysis and value added analysis are some of the Total Quality management tools used by IKEA. References: Jones, G. and George, J. (2010) Essentials of Contemporary Management, 4th Edition, 4th Edition. McGraw-Hill Primis Custom Publishing, Apr-10. p. 238 Karshenas, S. and Haber, D. (1990). Economic optimization of construction project scheduling. Const. Manage. Eco., 8, Malhotra, M., Ritzman, L. and Krajewski, L. (2009) Operations Management. Prentice Hall. 9th Edition. Render, B. and Heizer, J. (2010) Operations Management. Prentice Hall. 10th Edition. Russell, R. and Taylor, B. (2010) Operations Management: Creating Value around the Supply Chain. Wiley. Sanders, N. and Reid, R. (2009) Operations Management. Wiley Read More