Lund 2009-11-05
Department of Industrial Management & Logistics Production Management
Coordinated inventory control
- A case study on its performance compared to the current system at IKEA
Master’s Thesis project 1002
Silvia Rasmusson and Björn Sunesson
Acknowledgement This master’s thesis is written as a final part of the Master of Science program in Industrial Engineering and Management at Lund University, Lund Institute of Technology. The project corresponds to 30 ECT credits and was performed during a period of 20 weeks in the summer and fall of 2009. The idea to perform a study on inventory control on IKEA came from Paul Björnsson, Process Leader for “Plan and Secure Capacity” at IKEA of Sweden. The suggestion to
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7 2.1 2.2 2.3 2.4 Objectives .................................................................................................. 8 Delimitations ............................................................................................. 9 Target group .............................................................................................. 9 Report outline ......................................................................................... 10
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Methodology ................................................................................................. 11 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Procedure ................................................................................................ 11 Research approach .................................................................................. 13 Methodology ........................................................................................... 15 Method of analysis .................................................................................. 17 Sources .................................................................................................... 19 Tools ........................................................................................................ 23 Credibility ................................................................................................ 23
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Theoretical Frame of
Student instructions: Follow the step-by-step instructions for this exercise found on the worksheet below and in the virtual lab and record your answers in the spaces below. Submit this completed document by the assignment due date found in the Syllabus.
This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.
On your own and without assistance, complete this Lab 4 Answer Sheet electronically and submit it via the Assignments Folder by the date listed in the Course Schedule (under Syllabus).
During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand
able to answer this lab. Please submit queries as download the results in a CSV file
This procedure should be typed and handed into the Moodle pre lab assignment by 0700 on
The services and products offered by IKEA provide value to its customers in various ways. For one, the products and services are very affordable. The products and services are not priced highly and therefore, the average customer can enjoy them. At the same time, the products are of high quality. From IKEA’s slogan “low prices but not at any price”, it is clear that the company prices its products lowly but that does not mean that the quality is compromised. IKEA satisfying its customer’s needs through providing them value for their money as they provide quality products that will last for a long time, and at affordable costs. The fact that the company has set the minimum acceptable standards for its wood, implies that it is also keen on quality and on the environmental impact of its action of making furniture ( Edvardsson, Enquist & Hay, 2006).
IKEA is one of the largest multinational companies in the world dealing with several products. The company sells and designs furniture appliances and home accessories at an affordable price. Ikea has over three hundred stores worldwide enjoying the good name it has created for itself. While they are one of the most profitable furniture companies in the world there are significant challenges and threats that have been overcome and are still needed to be tackled.
Managing what's in a warehouse or on the shop floor can be extremely complex if you're looking for optimal cost and supply chain management capabilities( Needleman, 2017 ). Inventory estimation and control is directly impacted a company’s profitability.
The stores have restaurant, childcare facilities and plenty of parking. Customers can drop off their kids at the playroom and have delicious meal when they are tired. All of these not only provide customer with a comfortable shopping environment but also let them make an ‘IKEA trip’ and enjoy the fun of buying. Besides, IKEA’s distinctive show rooms help creating differentiation. Products are strategically placed in different small spaces like rooms which allow customers imaging this furniture in their own home. This makes everything looks more attractive.
Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
In PEST analysis, we will look into what will be affect by the business environment. It includes political environment, economical environment, social environment and technological environment.
IKEA’s BUSINESS IDEA (www.ikea.com): “We shall offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them."
These value adding activities generate numbers of benefit to the organization. They help in saving relevant cost and improve efficiency. Once the company successfully transfer product to customers, it will attain the revenue. If these cannot be done effectively, it will not generate and profitability to the organization.
Scope and Delimitation of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12