IKEA PROCESS CHANGE

STATUS REPORT

Tryshan Ravenell

Kaplan University – GB560 Dr. James McGinley – ProfessorDesigning, Improving, and Implementing Processes

Process Change Overview

The process change goal was to change the process of pulling inventory by customers in effort to improve customer retention

The new process has been in effect for over a year

The report highlights activity and process level analysis, performance related issues, and process problems

The new process will help to empower IKEA employees and customers with new ways to get the IKEA products from the stock shelves out the door with the customers

The process will be supplement by new software processes that can be used to track the process and employee progress

Process Level Analysis

Improving customers’ pulling business process created other processes

Help eliminates customers confusion and dissatisfaction with pulling orders

Increase customers’ shopping experience

Process Level Analysis (cont)

Improve Customers’Pulling Experience

Hire Additional StaffInstall Automatic

Shelves

Implement New Software with Price

Gun

Purchase / Install Software

Purchase Price Guns

Training for Employees

Customers Using Price Guns

Improve Customers’Pulling Experience

Hire Additional StaffInstall Automatic

Shelves

Implement New Software with Price

Gun

Purchase / Install Software

Purchase Price Guns

Training for Employees

Customers Using Price Guns

Process Level Analysis (cont)

Applies for job

Screens applications

Human Resources

Advertise open

position

Candidate right for job?

No

Yes

Candidate

Human Resources

Manager

Manager

Human Resources

Selects qualified

candidate

Sets up interview

Interviews candidate

Hires candidate

Applies for job

Screens applications

Human Resources

Advertise open

position

Candidate right for job?

No

Yes

Candidate

Human Resources

Manager

Manager

Human Resources

Selects qualified

candidate

Sets up interview

Interviews candidate

Hires candidate

Process Level Analysis (cont)

Measures shelf size

Orders shelf

Manager Evaluates floor space

Is shelf right size?

No

Yes

Carpenter

Purchasing

Warehouse

Carpenter

Pays for shelf

Ships shelf

Receives shelf

Installs shelf

Tests shelfWorking

correctly?

Stocks shelf

Manufacturer

Return to manufacturer

Yes

No

Carpenter

Stocker

Measures shelf size

Orders shelf

Manager Evaluates floor space

Is shelf right size?

No

Yes

Carpenter

Purchasing

Warehouse

Carpenter

Pays for shelf

Ships shelf

Receives shelf

Installs shelf

Tests shelfWorking

correctly?

Stocks shelf

Manufacturer

Return to manufacturer

Yes

No

Carpenter

Stocker

Process Level Analysis (cont)

Greets customer

Finds product

Customer Goes into store

Complete shopping?

No

Yes

Employee

Customer

Customer

Customer

Customer

Scans product with

price gun

Picks up products

Pays for products

Shows customer how to use price

gun

Gives customer price gun to

select product

Greets customer

Finds product

Customer Goes into store

Complete shopping?

No

Yes

Employee

Customer

Customer

Customer

Customer

Scans product with

price gun

Picks up products

Pays for products

Shows customer how to use price

gun

Gives customer price gun to

select product

Activity Level Analysis

IKEA’s activities have become much more efficient

The activities are centralized with the customer expectations and customer retention strategy

All activities are value-adding and their purpose is transparent

The activities have effectively increased customer touch points

Activities provide a strong basis for continuous process improvement strategies

• out-of-store touch point

• Great feedback• Coupons associated

with completed survey (rewards)

• Staff dedicated to serving the customer

• Reduce frustrations• Engaging customer

with service-oriented employees.

• Gauges customer overall attitude and perspective

• Great touch point• Feedback used to

improve activity effectiveness

• Formalizes order pulling process

• Fully engages customer

• Creates structure for pulling process

• Great touch points Order fulfillment software &

product scanner package

Customer satisfaction

survey booth (in-

store computer)

Post-purchase survey & rewards incentive

online

Order pulling

specialists (redefined employee

roles)

NEW CUSTOMER RETENTION ACTIVITIES

New Activity EfficiencyCustomer

Feedback Mechanism (in-store/on-line)

Order pull software & product scanner

Order Pulling specialist (redefined employee roles)

Warehouse

Cashier

Return Desk

Customer shops

Scans product

Feedback booth

Order received

Takes Printout

Takes Printout

pulls order pulls order

Customer pays

Given survey code

Uses code to take purchase

survey

Satisfied

Unsatisfied

Returns product

Complexity of the Process

New Software Variables Employee Training Initial accuracy of software

Additional Staff Variables Number of applicants Quality of Staff Training

Complexity of the Process (cont.)

Automatic Shelves Variables Timeframe Number of Stores The Geographical scope of IKEA

Problems of Process Evolution

Rewards of incentives Paid vacation Paid holidays Sick time Raises

Process of evaluation is easy to determine with the employee problems and also the customer retention.

Documentation

Incomplete paperwork, Out-of-date or wrong

To many employees trying to get one document up and running

Documentation not available when it is needed.

Problem Management Tasks

Problems should be addressed in priority

The degree of management and planning required is greater than that needed for incident control,

Responsibility of problem resolution team is to ensure that incident information is documented in such a way that it is readily available to all technical support staff. (FITS)

Process Planning Diagram

• Identify problem

Evaluate business

needs

• Solve problem

Change management

• DeployCarrie out

development plan

Worker Performance

Recommitment and reestablishment of expectations formal documentation of problems and write up

process separation interviews are conducted were necessary a commitment to rules and regulation enforcement.

IKEA Documentation and Write up process

verbal coaching This is to help the employee to improve on what

expectation they are not meeting Formal Letter of Clarity

This document is a permanent record that provides documented proof that a conversation was had about the performance of the individual employee

. This letter is specific to what expectations the employee did not meet and how to fix it.

IKEA Documentation and Write up process cont.

PIP or Performance Improvement Plan It provides the employee with strict feedback and

coaching on what areas of their job are not being met . This is used to reinforce the same topics that were

not improved on after the letter of clarity.

Employee Separation procedures

IKEA has established a separation strategy called the exit interview

These interviews can gather some data on how to improve the overall health of the management team and can lead to some new initiatives in improving employee satisfaction

Rule Enforcement

IKEA strictly adheres to all of the policies in order to make sure that we are providing the best service to our customers and providing the best working conditions for our employees

Most importantly the rules at IKEA are enforced constantly with every employee in the company. IKEA really makes sure that each process is followed to the letter when it comes to termination and documentation as well as company wide policies.

Summary

The new process change is a success for the IKEA customers and IKEA

The new process has affected the company in each division

The process can be implemented into any IKEA store

IKEA will benefit from the process change via higher customer retention numbers and greater employee skill sets and business process knowledge

Conclusion

IKEA management must use the new reporting structure to ensure that the process continues to remain viable and productive to the IKEA bottom line

IKEA management must also enforce all employee rules and training requirements

IKEA management should implement the new process in as many of the IKEA stores as possible Keeping in mind that the process may be a little different

at the other stores The more stores that the new process is used at will

mean the more benefit that IKEA can recieve