Aurelia Obuchowska
N0793511
Words 1998
BUSI22640
IKEA
Table of contents
Introduction Page 1
Main body Question 1 Page 1
Question 2 Page 3
Question 3 Page 5
Question 4 Page 6
Conclusion Page 7
Recommendations Page 8
References Page 8
Appendix Page 11
Introduction
This report will present a structured House of Quality and Supply Chain Map for Ikea
whilst explaining how it contributes to customer value. The Supply Chains stages will
be identified as well as how the organisation is involved at each stage and the
functions they perform. Furthermore, concepts of variation, uncertainty, buffering
mechanisms and postponement will be discussed in regard to Ikeas Supply Chain.
Lastly, Ikea will be compared to their competitors through the House of Quality Map
and suggestions will be made how to improve performance and competitiveness.
IKEA is the world’s largest furniture seller due to its unique concept of being
sustainable and selling their items in flat pack packaging which makes it very
affordable and easy to construct at home by customers (Wang, 2017). Ikea operates
in 25 countries within those countries there are 276 stores (Ikea.com, 2020). Each
year IKEA expands, and this leads to new stores, suppliers as well as manufacturers.
Main body Question 1
1
, Aurelia Obuchowska
N0793511
Words 1998
House of quality is defined as a product planning matrix model used as a way
represent how customer requirements relate to the way IKEA functions and the
methods that are used (Hauser, 1998). Ikea produces products for customers needs
and desires rather their own. This model is often used to compare and correlate the
relationship between the specification of an item based on a variety of viewpoints
(Turan, 2013). Furthermore, the matrix also takes into consideration the order
qualifiers and winners. The different between these two is that order qualifiers are
the competitive standards that IKEA’s products viewed as fit for purchase by a
customer (Study.com. 2020). Whereas order winners are a characteristic that will
ensure that a consumer need or purchase is secured for a service or product
(Study.com. 2020). An example of an order qualifier would be flexibility, good
quality and service levels. Whereas an order winner would be brand name, price and
product design (Study.com. 2020).
House of Quality contributes to customer value through the Supply Chain by
ensuring that customers are satisfied with their purchases. This means that IKEA will
buy capacity from their suppliers so that enough products will be able to be sold to
customers without getting out of stock. By IKEA doing this they are saving money
and not being wasteful this results in Ikea being more agile even though they
operate in a lean way. Moreover, by IKEA making sure they have capacity that
means they will be able to see what the highest demand is and then use it for that
product. Once that decision has been made the manufacturer will then send the
items to IKEA’s stores which means that speed and lead time will be fast as it was
rated as a high 5 in the model that can be seen in appendix 1. The reason it’s been
rated a 5 is because IKEA operate a push forecast and the forecast is IKEA’s best
prediction. This means that items will be ordered straight away so that the
manufacturer can supply the goods to IKEA so it can be on shelfs where customers
will be able to buy what they came for. Due to IKEA being very flexible in designing
their items that means there many designs to choose from as they are produced on
a high mass rapidly where it contributes to having a sufficient lead/time which then
results in customer satisfaction and adds to the customer value as IKEA is always on
top of every trend. Lastly, because IKEA is always on top of every trend that gives
them a competitive advantage because they sell quality goods for a lower price
compared to competitors meaning IKEA will make more sales as people will want to
2
N0793511
Words 1998
BUSI22640
IKEA
Table of contents
Introduction Page 1
Main body Question 1 Page 1
Question 2 Page 3
Question 3 Page 5
Question 4 Page 6
Conclusion Page 7
Recommendations Page 8
References Page 8
Appendix Page 11
Introduction
This report will present a structured House of Quality and Supply Chain Map for Ikea
whilst explaining how it contributes to customer value. The Supply Chains stages will
be identified as well as how the organisation is involved at each stage and the
functions they perform. Furthermore, concepts of variation, uncertainty, buffering
mechanisms and postponement will be discussed in regard to Ikeas Supply Chain.
Lastly, Ikea will be compared to their competitors through the House of Quality Map
and suggestions will be made how to improve performance and competitiveness.
IKEA is the world’s largest furniture seller due to its unique concept of being
sustainable and selling their items in flat pack packaging which makes it very
affordable and easy to construct at home by customers (Wang, 2017). Ikea operates
in 25 countries within those countries there are 276 stores (Ikea.com, 2020). Each
year IKEA expands, and this leads to new stores, suppliers as well as manufacturers.
Main body Question 1
1
, Aurelia Obuchowska
N0793511
Words 1998
House of quality is defined as a product planning matrix model used as a way
represent how customer requirements relate to the way IKEA functions and the
methods that are used (Hauser, 1998). Ikea produces products for customers needs
and desires rather their own. This model is often used to compare and correlate the
relationship between the specification of an item based on a variety of viewpoints
(Turan, 2013). Furthermore, the matrix also takes into consideration the order
qualifiers and winners. The different between these two is that order qualifiers are
the competitive standards that IKEA’s products viewed as fit for purchase by a
customer (Study.com. 2020). Whereas order winners are a characteristic that will
ensure that a consumer need or purchase is secured for a service or product
(Study.com. 2020). An example of an order qualifier would be flexibility, good
quality and service levels. Whereas an order winner would be brand name, price and
product design (Study.com. 2020).
House of Quality contributes to customer value through the Supply Chain by
ensuring that customers are satisfied with their purchases. This means that IKEA will
buy capacity from their suppliers so that enough products will be able to be sold to
customers without getting out of stock. By IKEA doing this they are saving money
and not being wasteful this results in Ikea being more agile even though they
operate in a lean way. Moreover, by IKEA making sure they have capacity that
means they will be able to see what the highest demand is and then use it for that
product. Once that decision has been made the manufacturer will then send the
items to IKEA’s stores which means that speed and lead time will be fast as it was
rated as a high 5 in the model that can be seen in appendix 1. The reason it’s been
rated a 5 is because IKEA operate a push forecast and the forecast is IKEA’s best
prediction. This means that items will be ordered straight away so that the
manufacturer can supply the goods to IKEA so it can be on shelfs where customers
will be able to buy what they came for. Due to IKEA being very flexible in designing
their items that means there many designs to choose from as they are produced on
a high mass rapidly where it contributes to having a sufficient lead/time which then
results in customer satisfaction and adds to the customer value as IKEA is always on
top of every trend. Lastly, because IKEA is always on top of every trend that gives
them a competitive advantage because they sell quality goods for a lower price
compared to competitors meaning IKEA will make more sales as people will want to
2
