Operation Management

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IKEA’s store layout

IKEA’s store layout, from parking area to exit area, provides a smooth and effective flow to customer. It designs as a “one way” layout, encourage customer to walk around all areas. There is a children’s play area, which allows the parents leave their children in this area for a time and children are being supervised, so they can enjoy the shopping. The store layout is different from other tradition furniture store, IKEA set up many different style showroom, provide idea for customer to design their room. IKEA provides pencil and paper at the store entrance, so the customer can write down the details and the item code of the product which they want to buy. According to the code, customer can pick up their product which in flat pack form in the warehouse directly. The warehouse is always next to or nearby by the store, customer can self-serve themselves, so reduce the retailing cost.

Product design

IKEA provide a wide range of product and services. The range of product is wide from home furniture to office furniture and accessories, from childcare, to self-service restaurant. Most of the products in IKEA are designed to be assembled by customer themselves, the flat-packed design let customer and staff to carry them more convenient and efficient, also can reduce the transportation cost as this package method can take up less room in truck and container, to release more space so allow to load more product. The flat-packed design can also take less space in warehouse, reduce the stocking cost. All the saving cost will finally return to customers.

Job design

Staff in IKEA will not brother customer when they selecting products. But if customer need help, they can go to the information point to ask for help.

Inventory management

IKEA’s proportion of goods out of stock is kept to minimum by the simple reorder system. IKEA keep merchandise difference kind of product, try to speed up the arrival of new product if stock-out occur. IKEA will avoid running out of product for sale.

Quality management

IKEA not only provide quality product, but also service quality. Service quality including the availability and accessibility of the service, the ability to perform a service dependably, consistently and accurately, the willingness of service provider to help customer in usual situation and to deal with problem, the speed of services is delivered. IKEA can achieve these dimensions through the above operation activities. It keeps monitoring and enhancing quality of service to customer.

Question 3

Before determine which award is recommending to a local firm, I will first introduce the four awards, their background, objective, criteria of each awards.

Deming Prize

Deming Prize was established in Japan by the Union of Japanese Scientists and Engineers in 1951. It was named in honor of the father of the worldwide quality movement W. Edwards Deming. Deming Prize aims to evaluate and recognize methods of companywide quality control for Japanese businesses. The prize has three award categories which is Individual person, the Deming Application Prizes, and the Quality Control Award for factory. The Deming Application prizes are awarded to private or public organizations and are subdivided into small enterprises, divisions of large corporations, and overseas companies. There are 10 criteria which are designed to achieve quality assurance in an organization and that each applicant must address, including policies and objectives, organization and its operation, assembling and disseminating of information, standardization, human resources, quality assurance, maintenance, improvement, effects and future plans ; The applicants are required to submit a detailed description of quality practices. In Deming Prize customer satisfaction are more important that business results.

Malcolm Baldrige National Quality Award

Malcolm Baldrige National Quality Award was awarded in America. It created to promote quality awareness for U.S. firm. Malcolm Baldrige National Quality Award is purpose to help American companies to improve quality and productivity, to simulate communication and sharing of best practices among organization. Also, it serves as a working tool for understanding and managing, planning, training and assessment, to achieve performance excellence in organizations; The main examination categories are leadership; strategic quality planning; customer and market focus; information and analysis; human resource focus; quality assurance of product and services and business result. Business result which means market share, revenue, sales, customer satisfaction, employee productivity and the increased return on assets. Nowadays, business result, customer and market focus account for more than 50% of the weighting.

European Quality Award

European Quality Award is awarded to the most successful exponent of total quality management in Europe each year. The award aims to facilitate and help European organizations in improving customer and employee satisfaction, impact on business result. To get this award, firms must demonstrate that their approach to TQM has contributed significantly to satisfying the expectations of customer, employee, and others who have interest in the firm for the past few years. The criteria included leadership, policy and strategy, how the firms develop and manage its people and resources, the way it organizes its processes, people satisfaction, impact on society and business result.

ISO9000 Series

ISO 9000 Series is not an award, it is a set of worldwide standard that established the requirement for companies’ quality management systems and it aims to ensure the basic quality systems are in place of the organization. ISO 9000 provides guidance and tools , to help a company satisfy its customers, meet regulatory requirements, and achieve continual improvement. ISO 9000 standards includes 5 categories – 1. System requirement; 2. Management requirement 3. Resource requirement; 4. Realization of requirement; 5. Remedial requirement.

All awards have similar criteria – leadership, planning, customer, employees, processes, suppliers and results. Leadership refer to how senior leaders and the leadership system applied values, company and performance direction, customer focus, learning and innovation. Strategic planning