Introduction to IE project (1)

Company: Ikea

Tala Al-Jobori
Serena Haddad
Ahmad Obedat
 Ikea

IKEA is a Swedish-Dutch
multinational conglomerate based
in the Netherlands that designs
and sells ready-to-assemble
furniture, kitchen appliances,
decoration, home accessories, and
various other goods and home
services. ~
As industrial engineers we can
implement processes to make
products and provide services, and
as Ikea makes products and
provide services, there are many
ways we can improve the chain,
increase their profits, eliminate
wastefulness in production
processes and much more.

PAGE 2
 Products Flow

What is a process flow?

A process flow is a sequential representation of a process and its

components, including operations, timelines, people involved, and
resources needed.

Process flow of Ikea

Ikeas process flow starts by ordering the required raw materials

from suppliers then distributing the resources for manufacturing,
here the product is achieved (while adhering to its quality
requirements). Then the final products are delivered to storage
facilities and distributed to stores, and eventually, customers.

Here is Ikeas process flow:

raw material

costumer manufacturing

store warehouse

PAGE 3
 Products Flow

Process flow of costumers

The costumer enters Ikea and starts looking for the product they
need, after finding the products, Ikea employees help and assist the
customers with information they need such as quality traits, price,
appearance etc... The process then shows customers checking out and
paying, then the product being delivered to the customer by Ikeas
employees. Then the customer can provide feedback.
To maximize the efficiency of customers flow, Ikea has two options
for purchasing their products:
1) By going to the store
2) Purchasing via the online store

costumer
enters
open app

searches for
products
search for
product
employee
assissts

costumer costumer not

inventory satisfied satisfied
availability

not available available proceeds to costumer asks

check out for help

costumer
backorder not satisfied
satistfied add type of check
payment availability
proceeds to costumer gives
checkout feedback
add type of costumer gives
delivery feedback
delivery
system

confirm order
ikeas delivery delivered alone by
the cosutmer

costumer costumer gives

gives feedback feedback
costumer gives
feedback
PAGE 4
 Input Variables and Analysis Requirements

Input variables

Ikea inputs raw material, staff, technology, distribution centers,

material transportation, packaging etc...
Here are the main inputs and outputs of Ikea:

• Raw materials
• Staff
In the transformation process all the Inputs • Working place
• warehouses
input variables are put to work to • machines

give off the output variables (finished

product). Which means the raw
materials will be transformed by staff Transformation
Process
and machines into the desired
product. Raw materials come from
suppliers, warehouses are used to
put all the materials and products in Outputs
• Finished products
• Satisfied Costumer

one place. These inputs then give us • Delivery of products

the finished product which is the

output.

PAGE 5
 Input Variables and Analysis Requirements

Analysis Requirements

Firstly, identifying the stakeholders of Ikea:

-Co-workers
-Communities
-Suppliers
-Customers
-Partners and Collaborations
Then ask each of the stakeholders and end-users their requirements
for the new product.

 Functional Requirements - Functions the product is required to

perform.

 Technical Requirements - Technical issues to be considered for

the successful implementation of the product.

 Transitional Requirements - Steps required to implement a new

product smoothly.

 Operational Requirements - Operations to be carried out in the

backend for proper functioning of the product.

 How frequent are customers purchasing products from Ikea?

Researching about the reason why customers at Ikea tend to purchase

more stuff than what they needed, we came across The Gruen Effect
(also called the Gruen Transfer)

PAGE 6
It describes the moment people enter a store and are engrossed in an
intentionally overwhelming experience. This causes them to forget
their original reason for going to the shop, so they tend to make more
impulse purchases.

 What is the feature or condition required for the product?

Long- lasting and good quality products are what people look for
when purchasing from Ikea, therefore the quality must be tested
before selling and the it must contain an instruction paper in order to
keep the process of maintaining the product perfect for all conditions,
as well as offering products for all types of conditions; such as,
furniture for outdoor environment, furniture for all ages, products for
decorations etc..

 Technical issues to be considered?

-Market viability; the audience targeted shows what is needed the

most in the market, for Ikea, the audience targeted are of all ages
therefore, market viability would now concern the competition
found in the area, which means Ikea must produce a product that
is not found in any other market

PAGE 7
 System Analysis

Roadmap to utilize the Industrial Engineering fields of

knowledge/discipline:

Operations
Management Manufacturing Work
-Pricing
and Supply policy, which contains: Hiring expenses, Marketing
& Materials Measurement
Science
Chainexpenses, Product realization costs & Ergonomics
Management

 What are the steps required to implement a new product

smoothly?
Product Work
Production Manufacturing
development and Ergonomics Measurement
Planning Processes
IKEA's Entrepreneurship
process for developing a new product contains the following
and standards

steps: pick a price, choose a manufacturer, design the product, ship

it, and sell it.

PAGE 8
 Economics &
Project Industrial Cost
Management analysis
Managements

 After talking with some people who work in the Ikea company, these were the
most important things that we can utilize in the company.

 The study of all these processes helps the company analyze the current position
in the market, and according to the analysis, the company designs strategies and
policies in the areas that are required to improve for enhanced sustainability and
market value.

PAGE 9
 System Analysis

Table that includes:

a. Field of knowledge /discipline
b. What will you utilize from this discipline in this company:

Fields of Discipline How to utilize it

With the help of operations management, Ikea can

1.Operations Management and enhance its key aspect, which is to provide services or
Supply Chain Management products in accordance with the demands and needs
of the customers.

The company identifies the production requirements

of each item, then they order the required raw
2.Manufacturing & Materials
materials from suppliers then the manufactured
Science
products are delivered to storage facilities and
distributed to stores.

Ikea took in consideration the long time that the

3.Work Measurement & workers or the customers might take assembling their
Ergonomics furniture, so they came with the idea of building your
furniture like Lego instead of drilling and welding.

When the company identifies the production

requirements of each item, they determine the
4.Economics & Management
process and techniques to make the best possible
decisions for any scenario.

PAGE 10
 Output analysis and improvements

Ineffectiveness/ wasteful/ non-value-add activities

 Time wasted:
Customer waits to place order (either in store or delivery)
Customer waits to receive the order
Customer waits to receive the change and receipt
Delivery time
 Overproduction
Product was in demand for a while then stopped
Ordering more supplies than necessary
Expecting disrupted production flows/ expecting what the customer might need
in the future, creating false demand.
Overstaffed

What we want to achieve:

 Less waste

 Less inventory

 Increased productivity

 Better quality

 Happier customers

 Fewer costs

 More profits

PAGE 11
How to minimize waste/ increase profit

After highlighting the non-value-added activities, we can now use the following to
minimize this waste:

 Lean management - optimizes processes by reducing time spent on non-value-

added tasks
 Operations research - analytical method of problem-solving and decision-making
that is useful in the management of organizations.
 Production planning - helps organizations make the production process as
efficient as possible.
 Economics - studies the production, distribution, and consumption of goods and
services.
 Work measurements and Ergonomics - work methods and production processes
to improve operator effectiveness and reduce production costs.

1) Highlight the non-value-added activities

2) Find the best solution for each.
After studying the non-value-added activities and how they can be minimized we came
up with an idea to reduce the time wasted, reduce number of staff, and reduce chances
of staff getting injured in Ikea.
Our idea is to use Industrial Automation and build a machine that is processed to take
the customers order and bring the product to the customer. Each product will be
displayed in the display area with a machine/screen next to it, the costumer can then
order the product with the desired color and size while getting to see the price of it.
After ordering the machine will transfer this order into the storage area and get the
product from where it is stored to the customer. To minimize chances of losing the
product, each customer will receive a paper with a number on it after placing their
order. Then they will proceed to the cash and provide the employee with the number
they received, that way each customer will get the product they asked for without
mixing up any orders.

We can see with this idea we minimized the time wasted on waiting for the product, and
we reduced chances of having over-staff.

The data that this machines stores will be a helpful and more effective way to see what
the most demanded products are and what are the least. Then we can use economics to
study this data. Then we will be able to minimize overproduction.

PAGE 12
 costumer
enters

Orders
through
machine

inventory  Inventory Availability can be checked using

availability the machine which will reduce time

not available available

costumer
backorder not satisfied
satistfied

proceeds to costumer gives

checkout feedback

delivery
system

ikeas delivery delivered alone by

the cosutmer

costumer gives
feedback
costumer gives
feedback

PAGE 13