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OPM Assignment 1

The document discusses operational challenges faced by IKEA and Heathrow Airport's Terminal 5, including overcrowding, long waiting times, and system failures. To address these issues, IKEA implemented a £150 million improvement program, while Dubai's Terminal 3 adopted a phased opening and thorough training to avoid T5's pitfalls. Key takeaways emphasize the importance of under-promising, rigorous testing, and staff preparedness in large-scale operations.

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Zoya Nadeem
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4 views4 pages

OPM Assignment 1

The document discusses operational challenges faced by IKEA and Heathrow Airport's Terminal 5, including overcrowding, long waiting times, and system failures. To address these issues, IKEA implemented a £150 million improvement program, while Dubai's Terminal 3 adopted a phased opening and thorough training to avoid T5's pitfalls. Key takeaways emphasize the importance of under-promising, rigorous testing, and staff preparedness in large-scale operations.

Uploaded by

Zoya Nadeem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Hailey College Of Commerce

University Of The Punjab, Lahore

Course Instructor: Prof. Dr. Fouzia


Submitted By :
Zoya Nadeem BSCOM24-201

Operations and Production Management​ ​


​ ​ ​ ​
Program: BS Commerce
Section A (Self-Supporting)
Semester:6th
Session 2024-2026
IKEA Case Study
1. Major Issues Faced by Management During Business Operations

IKEA, the world’s most successful furniture retailer, operates through a complex supply chain
network with 1,300 direct suppliers, about 10,000 sub-suppliers, and 26 distribution centers.
However, with success came several operational challenges, including:

●​ Overcrowding and Long Waiting Times: Customers became frustrated with the lengthy
time spent in stores, as IKEA’s layout required them to pass through various sections before
reaching checkout.
●​ Bottlenecks in Store Flow: Customers were forced to navigate the entire showroom, which
led to congestion and an inefficient shopping experience.
●​ Checkout Delays: The checkout process was slow due to the high volume of customers,
which resulted in long lines and increased dissatisfaction.
●​ Stock Shortages: Popular product lines often ran out of stock during the day, causing
inconvenience for customers.
●​ Logistics and Parking Issues: IKEA’s policy of not allowing trolleys outside caused
customers difficulties when loading their purchases into vehicles.

2. Major Changes Introduced to Solve Operational Problems

To address these challenges, IKEA launched a £150 million improvement program in the UK,
implementing the following solutions:

●​ Shortcuts in Store Layout: Marked in-store shortcuts allowed customers to directly visit
specific areas, avoiding unnecessary navigation through the entire store.
●​ Express Checkout Tills: Introduced dedicated checkout lanes for customers with only a
shopping bag instead of a trolley, speeding up transactions.
●​ Additional Staff Support: Placed extra staff at key locations to assist customers and reduce
confusion.
●​ Redesigned Car Parks: Improved car park navigation and allowed trolleys outside for
easier product loading.
●​ Enhanced Warehouse System: Adjusted inventory management to prevent stockouts of
popular products throughout the day.
●​ More Children's Play Areas: Added family-friendly services to enhance the overall
shopping experience.

These strategic operational improvements led to higher customer satisfaction, better store flow,
and improved efficiency, aligning IKEA’s operations with its core mission of providing a smooth and
cost-effective shopping experience​.

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Case Study: A Tale of Two Terminals
1. Major Issues Faced by Management During Business Operations

The management faced several challenges during the operation of Terminal 5 (T5) at Heathrow
Airport, leading to operational failures and reputational damage. The key issues included:

●​ Baggage Handling System Failure: The state-of-the-art baggage system, which had an 18
km conveyor belt network, failed due to unexpected problems, causing delays in baggage
check-ins and flights.
●​ Staff Unfamiliarity with New Systems: Employees struggled to operate the new system, as
they were not adequately trained. Additionally, access issues to new workspaces led to further
delays.
●​ Security and Logistical Challenges: Staff had difficulties navigating through new security
protocols, work areas, and parking locations, which further slowed down operations.
●​ Cascading Disruptions: Due to inefficient baggage handling and delays, flights were
canceled, leading to a backlog of baggage and major customer dissatisfaction​.

2. Major Changes Introduced to Solve Operational Problems

To address these operational issues, several strategic changes were implemented:

●​ Phased Opening Approach: Unlike Heathrow’s T5, Dubai International Airport’s Terminal 3
(T3) was opened gradually rather than all at once. This allowed for adjustments before
full-scale operations began.
●​ Enhanced Testing and Training: Unlike T5, Dubai Airport conducted exhaustive system
tests throughout the summer, ensuring reliability before full deployment. Staff training was
also prioritized.
●​ Improved Security and Logistics Planning: T3 was designed for better accessibility with
features such as 157 elevators, 97 escalators, and 82 moving walkways to facilitate passenger
and staff movement.
●​ Operational Awareness and Caution: Dubai's management learned from T5’s failures and
ensured that all teams understood the complexity of operations, leading to a smooth launch​.

These proactive measures prevented operational disasters and enhanced service quality, proving
the importance of careful planning, testing, and gradual implementation in large-scale operations.

Key Takeaways

●​ Under-promise and Over-deliver: Heathrow overhyped T5’s launch, leading to high


customer expectations and eventual disappointment. Dubai, on the other hand,
under-promised and exceeded expectations.
●​ Thorough Testing and Gradual Implementation: Dubai’s phased approach and rigorous
system tests prevented the catastrophic failures experienced at Heathrow.
●​ Training and Logistics Management: Ensuring staff preparedness and efficient
movement planning is essential for smooth large-scale operations​.

By learning from T5’s failures, Dubai’s Terminal 3 set a new standard for efficient airport
operations, proving that careful planning, testing, and staff training are crucial for success.

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