Supply chain management - IKEA Essay Example | Topics and Well Written Essays - 1500 words

Supply chain management - IKEA - Essay Example This means that from management, everyone in the company is motivated to do their best in their department to ensure that the company produces the best products possible. For example, the company makes sure that it employs the best people who will ensure quality in the company’s products. Irrespective of the position being hired, the company ensures that it hires people with the best qualification and credentials. The human resource department ensures that it does back ground checks before hiring any employee to make sure that the credentials and qualifications they use to apply for job vacancies are true, and they possess the skills that they claim they have. This ensures that everyone in the supply chain of the IKEA company is a professional hence they will go about their duties as professionals which results in the success that the company experiences. Another supply chain management strategy that should be used in order for a company to maximize its profits is the Just in Time manufacturing (JIT) supply chain management concept. This is a strategy whereby a business establishment tries to increase their return on investment of the company (Inter IKEA Systems, 2012). The business organization does this by minimizing in processes associated with carrying cost and inventory. Carrying cost is the whole cost a business establishment incurs in its attempt of holding inventory. This cost includes rent salaries and other financial costs such as opportunity cost. Inventory is a term used to refer to any good or service that a company has (Cousins & Lawson, 2008). These goods and services are specifically stored for the purpose of reselling them. When one considers the two definitions and considers the IKEA... Another supply chain management strategy that should be used in order for a company to maximize its profits is the Just in Time manufacturing (JIT) supply chain management concept. This is a strategy whereby a business establishment tries to increase their return on investment of the company (Inter IKEA Systems, 2012). The business organization does this by minimizing in processes associated with carrying cost and inventory. Carrying cost is the whole cost a business establishment incurs in its attempt of holding inventory. This cost includes rent salaries and other financial costs such as opportunity cost.   Inventory is a term used to refer to any good or service that a company has (Cousins   & Lawson, 2008). These goods and services are specifically stored for the purpose of reselling them. When one considers the two definitions and considers the IKEA Company, then one will arrive at the conclusion that the IKEA Company has implemented this strategy in their business operation s. When one considers the company, it has various stores in different countries. Hence, the company minimizes all its inventory and carrying cost. The company does this by making sure that it sells all its stock, and if any inventory is left in one branch then it is transferred to a branch that is in need of such inventory. This minimizes the company’s total stock since the company does not buy equipment that is unnecessary since such equipments can be gotten from other branches that the company holds.