Introduction Logistic and operation management
Logistic and operation management is one of the important field for an organization for the purpose of product development, quality management, and logistic information system and personnel management. There are number of tools and techniques which can be used by operation manager of an organization for attaining performance objectives of the company (Dekker, Bloemhof and Mallidis, 2012). The current research project is based on logistic and operation management of an international organization of UK. Regarding this, research has been chosen IKEA which is a multinational group of companies that design and sell ready and assembled furniture in all over the world. This organization also focuses on logistic and operation management at the time of manufacturing different products and services and managing quality as well (Fitzsimmons and Fitzsimmons, 2013). The current report will focus on planning and control activities of the organization which play important role in attaining performance objectives. Study will recommend appropriate strategies for aligning planning and control activities with performance objectives.
Evaluation of The Planning and Control Activities of Ikea
IKEA wants to improve its performance by developing effective plan and control. Regarding this organization need to focus on different types of planning and control activities such as long term, medium term and short term (Bozarth and Handfield, 2016). Evaluation of the planning and control activities of IKEA for attaining all performance objectives is described as under:
Long term planning and control
Long term planning and control activities are based on mission, vision and long term objectives on IKEA. These objectives are described as follows:
- To increase the profitability of the organization by 30% in coming three years.
- To be a market leader of furniture industry and attain competitive advantages in effective manner (Schönsleben, 2016).
- To maintain sustainability in different activities of operation and logistics management.
For attaining these objectives in effective manner IKEA focuses on appropriate activities of planning and control. To increase the profitability by 30% organization needs to develop plans for reducing extra cost and wastages of raw material. Along with this IKEA needs to control the progress of production process in effective manner (Fernie and Sparks, 2014). For reducing the extra cost company is using activity based costing which helps in allocating all resources in optimum manner which plays important role in reducing operating cost of the organization. It is a long term planning process so, IKEA focuses on monitoring and controlling of each and every activity of the plan. Reduction of extra cost increase the net income which leads high profitability. To be a market leader organization has developed a plan to introduce new furniture product in the market. Regarding this, IKEA focuses on the new product development process and differentiation strategy. These strategies will play important role in making different product from existing competitors and it will also help in attaining competitive advantages and market shares. Regarding this, IKEA will focus on controlling each and every stage of the new product development process (Objectives of Performance Management, 2016). Another performance objective focuses on sustainable development of IKEA and regarding this, organization will focus on economic, environment and social development of the organization. Therefore, all these activities will help in attaining sustainable development of the organization.
Medium term planning and control
For attaining long term goals and objectives IKEA needs to focus on medium term planning and control activities also. Medium term objectives can be attained in coming one year (Dyckhoff, Lackes and Reese, 2013). These objectives focuses on the annual objectives of IKEA. Medium term performance objectives of this organization are described as under:
- To increase the sales revenue of the company in coming one year.
- To enable employees to achieve superior standards of work performance.
- To help employees in identifying knowledge and skills required and make necessary arrangement of training and development programme for increasing their knowledge and skills in effective manner.
Increasing the sales revenue of organization is one of the major objective of IKEA and for attaining this objective planning and control activities of this organization focuses on promotion of the new products of the organization. Regarding this, company will use digital marketing activities which will help in increasing the awareness of customers about the products and services of IKEA which will augment the number of customers of the organization (Rushton, Croucher and Baker, 2014). Therefore, it will increase the overall sales revenue of the organization. Another performance objective of IKEA is to enable employees to achieve superior standards of work performance and regarding this organization provides appropriate working environment and technologies which help employees of IKEA in improving their performance with superior standards of work performance. Including this, making necessary arrangement of training and development is also important activities for managing planning and control (Coyle, Langley, Novack and Gibson, 2016). So, IKEA makes necessary arrangement of training and development programme as per the needs and requirements of employees. It helps in augmenting the skills and knowledge of personnel which plays important role in attaining medium objective of the organization. Therefore, planning and control activities of IKEA are based on medium term objectives of the company.
Short term planning and control
These activities focus on the day to day operations and short term objectives of IKEA which are described as under:
- To improve the performance of the employees.
- To complete daily activities as per the operation and production planning.
- To make effective communication between employees and team members.
- To motivate employees for giving their best performance.
Planning and control activities of organization focuses on increasing the performance of employees. Regarding this IKEA makes appropriate arrangements of supervising and guiding each and every team members in effective manner which helps in completing every activities in appropriate way. Along with this, for managing day to day performance organization will focus on appropriate communication management (Stadtler, 2015). Regarding this, IKEA uses appropriate technologies such as telephones, email, mobiles, video conferencing and internet, etc. these technologies help in making effective coordination between team members. Therefore, all these planning and control activities will help in attaining short term performance objectives of IKEA.
Organization’s Planning and Control Activities Stages
Planning and control activities of IKEA focuses on long term, medium and short term objectives of company. These are the following stages of planning and control
For attaining performance objectives IKEA focuses on different planning and control activities. But deciding these activities is not only necessary because organization needs to decide priority of these activities also which is called sequencing process (Christopher, Magrill and Wills, 2013). This stage is based on some specific principles. These principles include customer priority, Physical constraints, Due date (DD), Last-in first-out (LIFO), First-in first-out (FIFO), Longest operation time (LOT) and Shortest operation time first (SOT ). IKEA can decide sequence of activities as per the needs and requirements of customers. So, customer’s priority can also be considered as important method for sequencing planning and control activities. On the other hand, there are some physical constraints for the furniture products such as organization needs to do lighter paints on furniture before doing the darker shades. So, this also decides the sequence of activities. Along with this, LIFO is an important model which focuses on the last in first out concept which can also be one of the important tool for deciding sequence. Similarly, organization can complete each activity in the sequence of first in last out (Toth and Vigo, 2014). Sometimes, organizations needs to complete that activities in first which require longest operation time else these activities can affect the total time of the project. On the other hand, sometimes company can finished all the short term tasks which will reduce the extra burden on employees and help in completing project in effective manner. Therefore, all these tools can be used by IKEA for sequencing activities of planning and control (Christopher, 2016).
This stage focuses on the allocation of work on each and every activity. In other words loading is a process of allocating of work to a part of planning and control operations. It is based on available working time and capacity of every machinery, team members and theory capacity of working and skills and knowledge. Overloading can reduce the quality of the products and under loading can affect the speed of planning and control operations (Planning and control, 2016). Overall, IKEA should use appropriate tools and techniques for allocating time and cost. Sometimes, waiting time, lead time and extra time can increase the total time of task so, IKEA needs to take some safety time for managing each and every task in effective manner. At the time of loading organization needs to take into accounts some rest breaks, idle time, changing from one activity to another, etc. Therefore, all these considerations will improve the overall loading of work on each and every planning and control activities (Logistics & Operations Management, 2016).
It is also one of the important stage which helps in determining the time table of each and every activity. Using this stage IKEA can decide schedule of each and every activity which helps in completing activities on time. There are number of tools and techniques which can be used by IKEA for scheduling each and every activity and these include Gantt chart and Project evaluation and review technique, etc. In addition, forward and backward scheduling is also very important for deciding total time for deciding the most appropriate path for completing project. Therefore, these are considered as important tool for scheduling activities in effective manner (Schönsleben, 2016).
Monitoring and control
Monitoring and controlling is one of the important stage for determining progress of entire operation. It plays important role in assuring quality of the furniture product as well as help in determining the required changes for improving the finished products and services. Along with this, for completing planning and control activities in effective manner IKEA needs to monitor sequencing, loading and scheduling stages in appropriate way. Push and pull control system is also an important tool which can be used by IKEA for intervention of input and monitoring the output of the company by which organization and compare and re-plan the entire plans in effective manner. Including this, Gantt chart and work breakdown structure can also be used by organization for monitoring and controlling each and every activity in effective manner (Rushton, Croucher and Baker, 2014).
Discussion of Planning and Control Activities And Recommendation
As per the above discussion each and every planning and control activities of IKEA help in attaining performance objectives in effective manner. Along with this, all these activities are effective for attaining long, medium and short term goals in effective manner. But sometimes inappropriate planning and control activities can affect the quality of the products and services which can affect the overall sales and profitability of the organization. So, for resolving these issues IKEA should focus on needs and requirements of customers (Coyle, Langley, Novack and Gibson, 2016). Along with this, organization needs to use electronic customer relationship management system which help in making strong communication with customers which plays important role in determining customer’s issues towards the products and services. It also plays important role in developing appropriate strategies for managing each and everything in effective manner. Further, IKEA should use different tools and techniques for developing planning and control activities. For instance company should use Gantt chart, PERT chart, push and pull system for loading, sequencing, scheduling and monitoring and control activities in effective manner. Therefore, all these recommended strategies will help in managing planning and control activities in appropriate manner by which organization can attain performance objectives in more effective way (Christopher, Magrill and Wills, 2013).
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Along with this, for sequencing activities organization needs to focus on customer priority, LIFO and FIFO methods. Further, PERT and Gantt chart are appropriate tool for loading, scheduling and monitoring and control of every activity in effective way. Therefore, report has recommended that IKEA should use operation management tool for deciding planning and control activities for attaining performance objectives (Dyckhoff, Lackes and Reese, 2013).
- Bozarth, C. B. and Handfield, R. B., 2016. Introduction to operations and supply chain management. Pearson Higher Ed.
- Christopher, M., 2016. Logistics & supply chain management. Pearson Higher Ed.
- Christopher, M., Magrill, L. and Wills, G., 2013. Educational development for marketing logistics. International Journal of Physical Distribution & Logistics Management.
- Coyle, J.J., Langley, C.J., Novack, R.A. and Gibson, B., 2016. Supply chain management: a logistics perspective. Nelson Education.
- Dekker, R., Bloemhof, J. and Mallidis, I., 2012. Operations Research for green logistics–An overview of aspects, issues, contributions and challenges. European Journal of Operational Research, 219(3), pp.671-679.
- Dyckhoff, H., Lackes, R. and Reese, J. eds., 2013. Supply chain management and reverse logistics. Springer Science & Business Media.
- Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
- Fitzsimmons, J. and Fitzsimmons, M., 2013. Service management: Operations, strategy, information technology. McGraw-Hill Higher Education.