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Task 1: Input- Process - Output

Input Process Output

Transformed resources Staff Happy customers?!?

All items of Restock warehouse and Flat packs/assembled furniture

furniture/ home visual displays taken to customer home
ware: small basket
items; flat pack Display of furniture and
items in the self- development of good visual
service displays
warehouse; Answer queries
special items
Process financial
Customers transactions

Transforming Resources
Selection of furniture
Visual displays
Design of configuration (e.g.
Warehouses a shelving system)

Trolleys and Picking of items from the

equipment warehouse

Checkout Transportation of items

equipment through the store

Customers Loading of items into car

Check out staff Delivery of items

Staff on Assembly of items

information points
Task 3: 4Vs

HIGH VOLUME - IKEAs operations are very large and purpose-built. They feature very large car parks
and are located close to major motorway intersections. In fact, everything about the design of IKEAs
operations encourage high volume of throughput. This high volume means that many of the fixed
costs of running the IKEA operation such as local taxes, administrative costs and some energy costs
are spread over a high volume of individual sales transactions. This reduces the overall cost of
making a sale, part of IKEAs strategy of offering good value for money.

store is relatively large compared with many furniture retail operations. For example, it includes
small items such as glassware and kitchenware as well as very large items such as sofas, tables and
shelving systems. Modular design of some products such as shelving systems allows variety to be
extended even further from a few basic component parts. These components can be assembled
together (by the customers) in different ways to offer an almost infinite variety of combinations.
However, as far as the variety of service is concerned it is relatively narrow. Most products are sold
in cartons, customers are left to make decisions by themselves without interference from sales staff
(though advice is available if requested) and even when ordering special products the order is taken
down by staff in a standardized form. The check-out operation, where customers pay for the goods,
is also highly standardized with everyone going through exactly the same sequence of activities.
Even delivery to the customers home is largely a matter of the customer carrying the goods
themselves in their own cars (though a delivery service is also available).

HIGH VARIATION OF DEMAND BUT PREDICTABLE - Weekends and public holidays are much busier
than working week days, therefore variation is relatively high. However, from IKEAs experience,
demand is relatively predictable. Because of this predictability they can plan to have more staff
available at busy periods. However, also because customers are encouraged to perform much of the
service themselves, the need to fluctuate staff is less than it would be in a conventional store. Also,
in conventional stores, because of the high level of expertise and customer contact required, it is
much more difficult to obtain the services of part-time staff during peak demands. The relatively
standardized and simplified service given by IKEA makes it easier to schedule part-time staff in busy


Finally, customer contact is, in some parts of the operation, high, but overall it is lower than most
furniture retail operations. Consider: customers are responsible for choosing which types of
furniture they require, working out whether this furniture would fit together in their own home
(special sheets and tape measures are provided by IKEA to help customers do this), filling in order
forms when special furniture has to be delivered, serving themselves to smaller items into trolleys,
entering the warehouse area and picking out from the warehouse shelves the cartoned larger items,
transporting the goods through to the checkout, and finally loading the goods on to their own car.
Most of this occurs with very little customer contact. In many instances the only point at which
interaction takes place between customer and service staff is at the point of payment. In effect, the
customer is trained to perform much of the value adding part of the service themselves. Clearly,
this cuts down the costs of the transaction as far as IKEA is concerned. These savings can then be
passed on to the customer.
Workshop 2

Task 2:

Level of decision-making Types of Decision Made

Strategic Expansion plan

Boutique or chain?


Long-term strategy

Tactical Room design

Menu design

Layout of hotel

Marketing plan for hotel


Operational Room reservations

Rates the customer should pay

Table reservations


Order supplies (food; beverages; linen etc.)

Maintenance Rota

Task 3:

Order winners

Quality, more specifically, the style and feeling of luxury of the hotel

Quality of the food on offer

Order qualifiers

Service level, customers seem to be able to tolerate the delay in service however,
this is the key aspect that Hotel Nouveau have to watch this. If there service does
not meet the qualifying level, they may lose customers.

Less competitive factors

Price Hotel Plaza Nouveau are choosing not to compete on price. They do charge a
bit more and their customers are prepared to pay it, but if they lower it it could have
an impact on demand.
Workshop 4

Task 1

Average time Cumulative

Average taken to %
frequency per perform service % Frequency frequency
shift (minutes) per shift per shift

Making photocopies 8 5 21% 21%

Providing drinks 6 2 16% 37%

Faxing documents 5 4 13% 50%

Locking/unlocking meeting 4 4 11% 61%


Relaying messages to 4 8 11% 71%

meeting rooms

Providing extra keys 3 2 8% 79%

Showing guests to rooms 2.5 4 7% 86%

Arranging computer 2 10 5% 91%

wireless connections

Providing medication 1.7 3 4% 95%

Providing extra linen 1.5 4 4% 99%

Arranging rooms 0.3 15 1% 100%

Total: 38 61
Task 2

Task 3

Use Paretos Diagram to Identify Areas for Improvement

Do you think it was wise to spend time examining this particular issue?

Yes, it works out that the desk is left unattended for 2 hours, 51 mins per shift

Customers would be frequently left waiting for help

It may also mean that queries need to be handled better.

How can the Pareto diagram be used to improve their processes?

The diagram indicates that the majority of times the desk is left unattended is for
photocopying the machine could be located at the reception desk, this would save
40 minutes.

Furthermore, it seems that the some of the processes need to be organised better
with other personnel in the hotel, e.g. waiting staff and other assistants.
Workshop 5

Task 2

No. Task Description Chart symbols Distance (approx) time
1. Concept and design in US - Not known

2. Send design (from 1) to Taiwan 6562 miles Not known

3. Engineering design in Taiwan - Not known

4. Send design (from 1) to Canada 824 miles Not known

5. Design of Graphic processors in - Not known


6. Send design of graphic processors to 5946 miles Not known

7. Graphic processors manufacturing in - Not known

8. Graphic processors stored in Taiwan - Not known

9. Graphic processors shipped to China 1336 miles Not known

10. LCD screens manufactured in Taiwan - Not known

11. LCD screens stored in Taiwan - Not known

12. LCD screen shipped to China 1336 miles Not known

13. Memory chips manufactured in South - Not known


14. Memory chips stored in South Korea - Not known

15. Memory chips shipped to China 540 miles Not known

16. Hard drives made in Japan - Not known

17. Hard drives stored in Japan - Not known

18. Hard drives shipped to China 4089 miles Not known

19. Other components manufactured in - Not known


20. Other components stored in China - Not known

21. Other components moved to assembly unknown Not known

facility in China

22. Other components manufactured in - Not known


23. Other components stored in Japan - Not known

24. Other components shipped to China 4089 miles Not known

25. Other components manufactured in - Not known


26. Other components stored in Singapore - Not known

27. Other components shipped to China 2361 miles Not known

28. Other components made in South - Not known


29. Other components stored in South - Not known


30. Other components shipped to China 540 miles Not known

31. Other components manufactured in - Not known

the US

32. Other components stored in the US - Not known

33. Other components shipped to China 8,954 miles Not known

34. Assembly of the laptop in China - Not known

35. Storage of laptops in China - Not known

36. Ship to customers various Not known

Task 3: Evaluate the Supply Chain

What other supply chain processes would be managed?

Supplier selection and evaluation

Inventory management

Time management

Quality testing and assurance


What are the advantages and disadvantages of locating across the globe?


Locate the best supplier for the different components

Identify skill sets in the particular areas of the design of the product

Cost effective



Difficult to co-ordinate

Time lags and delays between the different facilities

In transit inventory will have to be managed

Slow time to market


Do you think this is a physically efficient supply chain or ancustomer responsive agile one?

HP has focused on cost-effectiveness rather than quick customer response.

Inventory will be located more densely upstream (away from customers) rather than
a quick response to customers