Applied Management Research Report

Applied Management Research Report

            IKEA is a privately owned organization that has stores in various countries across the world. The firm’s focus on innovation and customer experience has enabled it to grow gradually over the years and become the largest retailer worldwide. IKEA’s vision is “to create a better everyday life for many people” (IKEA, n.d.). Thus, implementing quality improvement strategies aligns with the organization’s vision. As discussed in this report, the scan & go system, the coupling of processes, and the online ordering system will enable IKEA to eliminate delays and reduce customer’s waiting time.

Description of the Activities and the Problem

IKEA has a competent management team that handles all operational procedures and engage with customers to obtain their feedback and understand their needs. According to Caldwell 2012), effective leadership builds a shared vision and culture of quality improvement. Various initiatives can be attributed to the organization’s success, such as the development of self-service checkouts for consumers and the redesigning of car parts to ensure easy navigation and collection of commodities. From the process map, it is clear that IKEA’s management has played a significant role in its success. The process has been designed in a manner such that the average waiting time for customers in the store is less than two hours. The stores of this organization have come up with ways of facilitating a more fluid shopping experience for consumers. When customers enter the showrooms, they find domestic style layout plans that include living rooms, bathrooms, bedrooms, kitchens, and study places. When customers select a commodity, they can easily possess from the self-service furniture section. The unit contains an activity access point that allows them to pay for the item immediately. In the event that customers require additional furniture, they will be forced to go through the main checkouts. Members of staff can also assist consumers who need more extensive commodities. After payment, the workers carry the items and deliver them to consumers.

IKEA utilizes a functional layout that allows products, needs, or activities to be located in one place. The functional layout will enable customers to benefit from a wide variety of products, exceptional customer service, and product flexibility. The customers can easily navigate through the showroom and furniture area to identify their preferred commodities. From the process map, it is clear that IKEA faces two operational issues that include a delay in warehouse logistics and an interruption in the point of sale. Although consumers believe that the organization provides them with stylish furniture at reasonable prices, they become exhausted from ordering items and receiving them. The exhaustion comes from the extremely long waiting time at the checkouts and collection from the warehouse. If the company is committed to maintaining its competitive edge, it must find ways of reducing the waiting time.

Analysis of the Process Map

Through feedback, customers have raised concerns about the long waiting time they experience at the checkout points. Although the time they spend before obtaining their products is below that of rivals, the company should find ways of enhancing customer experiences. According to Griffin, Gleason, Preiss, and Shevenaugh (2012), the constant changes in the business environment make it challenging for organizations to maintain sales and profitability growth. Companies must find innovative ways to improve the quality of their products and services. Quality improvement principles encourage organizations to effectively utilize their human and financial resources in the production of goods and services that meet customers’ needs and requirements. One of the essential aspects of quality is ensuring that customers obtain products matching their specifications at the right time (Witell, Johnson, & Gustafsson, 2001). The company should eliminate delays in the processes and waste.

Quality is a measure of the extent to which an item or service complies with the agreed requirements. According to Oakland (2014), organizations can measure quality performance by evaluating the processes and procedures. A business such as IKEA employs various inputs to ensure the satisfaction of customers. Companies should put in place planned and systematic activities to monitor, identify, and eliminate problems to ensure continuous satisfaction of customers’ needs. IKEA should employ quality improvement techniques that would assist in offering products and services meeting customers’ needs. According to Pulakanam (2012), Six Sigma is an effective approach for reducing defects and solving problems in organizational processes and systems. The method provides opportunities for businesses to save money and other resources.

Organizations should also consider lean manufacturing. Lean manufacturing is a quality improvement methodology that aims at making businesses more responsive and efficient to market needs. As demonstrated by Seddon and Caulkin (2008), lean manufacturing offers management and employees the opportunity to learn and improve. The managers and workers join their efforts to implement initiatives for reducing waste and lowering costs. Quality improvement is a continuous process. Auditing should be performed periodically to ensure the organization processes and procedures comply with quality standards (Barnes & Barnes, 2012). In the long run, employees will develop a culture that influences them to have positive behavior and attitudes towards quality improvement activities.

Waste has adverse consequences on businesses and customers. According to Van-Rooij (2017), waste is any of the additional amounts of space, parts, worker’s time, materials, and equipment that are used in the production process. As detailed in the IKEA process map in Appendix 1, two interruptions occur at the point of sale. First, when customers select an item and retrieve it from the furniture area, they are required to go through the main checkouts when in need of additional commodities. The second delay comes from the procedure that customers must follow the entire process map through long waiting queues. The long waiting lines are due to logistic issues. The operational evaluation of these delays shows that customers waste their time in the process, which adversely affects their shopping experiences at the organization. Besides, consumers engage in unnecessary movements due to the requirement to pay for furniture in separate areas. The delays counter the quality improvement principles since customers fail to obtain their furniture when required at the place of their choosing. For the organization to improve quality, it should ensure the smooth flow of operations and supply networks without interruptions.

Apart from waste elimination, IKEA has underutilized the just in time (JIT) philosophy. JIT is an inventory management methodology that is designed to enhance efficiency, decrease waste, and cut costs by receiving products only as they are needed. Thus, the technique leads to reduced lead times and eliminates any challenges that could interfere with the operational processes. JIT also assists organizations in preventing an overload of orders within a short duration. Currently, IKEA follows a procedure whereby employees start retrieving furniture when customers reach the check out points in different areas and have made payments. The process extends the point of sale further since clients face long waiting times when queueing to order their products, receiving them from the warehouse, and making payments. For the firm to effectively implement the just in time methodology, the process of product retrieval should start when consumers make orders in the showroom.

During my visit to an IKEA store located in New York, I gave questionnaires to both regular service customers and self-service consumers. I found that customers who had an average waiting time of 20 minutes waiting to be served by staff members. The consumers also spend 5 minutes in the queue for self-service terminals. The information was estimated from the purchase of smaller items that did not require retrieval from the warehouse. From observations for 45 minutes, I found that the ratio of regular service customers and self-service consumers was 25:40. The results demonstrate that many customers utilize staffed checkouts every day. From the questionnaire results, it is clear that customers were dissatisfied with the services they obtained from the organization. Thus, IKEA needs to improve waiting times to ensure quality customer experiences.

From the analysis of delays in the point of sale, it can be deduced that IKEA suffers from inefficiency in its processes. The organization has, in the past years, focused on innovation and creativity to maintain a competitive edge. However, the time has come for the company to consider automating its systems and processes.

Apart from the point of sale, delays also occur at the warehouse due to logistic problems. When customers order for products at the room, warehouse staff remain unnotified until payments have been made. The lack of coordination causes time inefficiency, whereby workers have to wait for a substantial period for payments to be processed. Besides, the notification of item retrieval is sent at the checkout. As a result, staff members obtain numerals requests that would cause them to work under pressure as customers wait in the line. Imposing burdens on staff members increases the chances of human error. On the other hand, long waiting times diminish the value to customers. Consumers might become frustrated and seek a refund from the customer service before receiving the items. The logistical issues lead to higher inefficiency, time wastage, and operational costs.

Improvements

IKEA management should understand that point-of-sale systems are essential in tracking orders, managing stock, and recording buyer information to enhance worker performance and customer service. The organization should adopt recent technologies to automate the point-of-sale systems. Technology enables individuals to work more efficiently and faster (Baumers, M., Dickens, Tuck, & Hague, 2016). The management should be concerned that any delay in service provision might trigger consumers to cancel their purchases and seek assistance from competitors. The following are some of the initiatives to enhance the efficiency of the point-of-sale systems.

Scan and Go

Technology plays a significant role in the retail industry. According to Attaran and Gunasekaran (2019), technology can enhance the efficiency of systems and activities in retail businesses. Many businesses in the retail sector have invested in the scan & go system to improve customer experiences. The system enables customers to scan every item they select on a handheld gadget and simultaneously put the commodities in their bags (Perez, 2019). After completion, they proceed to the scan & go check out where they make payments and exit the store.

The scan & go system can help IKEA to reduce interruptions at the point of sale. The implementation of this system will lead to a significant reduction of the waiting times and length of checkout lines. The strategy the organization will implement involves using IKEA’s mobile app to scan the barcode of items that customers intend to purchase. The app also gives them the option to make payments instead of queuing at the checkout. The implementation of this initiation reduces the need for staff members at the checkout centers. The checkout staff can be used in the showroom and other areas to assist customers when they encounter challenges.

Coupling of Processes

IKEA should consider coupling processes to eliminate unnecessary movement from the showroom to furniture checkout. In the current operation procedure, buyers who require additional products pay for them at a checkout in a different area. Coupling of processes will allow customers to pay for all of their items at one checkout. The strategy will reduce queuing times for consumers and ease congestion at the checkouts.

Online Ordering System

The online ordering system depends on technologies to facilitate buyers to place their orders without their physical presence in the stores. According to Qin, Xu, and Wang (2019), lengthy queuing time in businesses is one of the substantial causes of customer dissatisfaction. IKEA should develop an online ordering system to solve this problem. Customers will use their phones or laptops to select and order items while at the comfort of their homes. After placing orders, they can collect them from the stores or request for delivery at a destination of their choice. Therefore, the online ordering system will be beneficial to IKEA since it will reduce lead times and improve customer satisfaction.

Improving Warehouse Logistics

The current procedure in IKEA is that staff members retrieve commodities from the warehouse when buyers have made payments at the checkouts instead of when an order is placed at the showroom. The management should change this approach since logistic problems cause customer dissatisfaction (Getachew, 2018). Once customers have requested items at the showroom, staff members should start retrieving them. By so doing, buyers will find their commodities ready when they reach the checkout to make payments. The current process made them wait a long time to receive their items after paying due to delays. The strategy can be coordinated with the scan & go system. After customers scan products, warehouse staff receives a notification to start the process of retrieval.

Limitations

The innovative systems discussed above have some limitations. First, the organization will incur high costs to purchase, install, implement, and maintain these technological systems. Although the company will incur additional costs, it is difficult to estimate the improvement in customer satisfaction. Further, the organization will incur expenses to educate workers about the new systems. Secondly, the new strategies might cause technical problems that lead to further delays in the operational processes.

References

africa/—ro-addis_ababa/—sro-cairo/documents/publication/wcms_621441.pdf

Attaran, M., & Gunasekaran, A. (2019). Consumer Goods and Retail Industry. In Applications of Blockchain Technology in Business (pp. 59-

Barnes, N., & Barnes, N. (2012). Driving quality improvement through audits. Information Management Journal, 40(1), 40-47.

Baumers, M., Dickens, P., Tuck, C., & Hague, R. (2016). The cost of additive manufacturing: machine productivity, economies of scale and technology-push. Technological Forecasting and Social Change, 102, 193-201.

Caldwell, R. (2012). Leadership and learning: a critical reexamination of Senge’s learning organization. Systemic Practice and Action Research, 25(1), pp39-55.

Getachew, T. (2018). Factors Affecting Customer Satisfaction of Customs Services of Bonded Warehouse Operation: The case of Addis Ababa Kality Customs Branch Office (Doctoral dissertation, aau).

Griffin, A., Gleason, G., Preiss, R., & Shevenaugh, D. (2012). Best practice for customer satisfaction in manufacturing firms. Sloan Management Review, 36(2).

IKEA. (n.d.). About the IKEA group. Retrieved from https://www.ikea.com/ms/en_KR/about-the-ikea-group/company-information/index.html

Labour Organisation. Retrieved from https://www.ilo.org/wcmsp5/groups/public/—

Liker, J. K.; Choi, T. Y. (2004). Building deep supplier relationship. Harvard Business Review, 82(12), 104-113.

Oakland, J. S (2014) Total Quality Management and Operational Excellence: Text with Cases. Routledge: London (4th Ed.

Perez, S. (2019). Sam’s Club to test new Scan & Go system that uses computer vision instead of barcodes. Retrieved from https://techcrunch.com/2019/03/04/sams-club-to-test-new-scan-go-system-that-uses-computer-vision-instead-of-barcodes/

Pulakanam, V. (2012). Costs and savings of six sigma programs: An empirical study. The Quality Management Journal, 19(4), 39-54.

Qin, J., Xu, F., & Wang, R. (2019). Pre-service recovery: impact on customer satisfaction and acceptable waiting time. The Service Industries Journal, 1-21.

Seddon, J., & Caulkin, S. (2007). Systems thinking, lean production and action learning. Action Learning: Research and Practice, 4(1), 9-24.

Van-Rooij, P. (2017) Lean manufacturing techniques. International

Witell, L., Johnson, M., & Gustafsson, A. (2001). The impact of quality practices on customer satisfaction and business results: Product versus service organizations. Journal of Quality Management, 6(1), 5-27.