CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGE

Learning outcomes

1.List and describe the four basic components of supply chain management.

2.Explain customer relationship management systems and how they can help organizations understand their customers.

3.Summarize the importance of enterprise resource planning systems.

4.Identify how an organization can use business process reengineering to improve its business.

Strategic Initiatives

1.Supply chain management (SCM)

2.Customer relationship management (CRM)

3.Business process reengineering (BPR)
4.Enterprise resource planning (ERP)

Supply Chain Management 

- the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitabilty.

- 4 basic components :

• Supply chain strategy - strategy for managing all resources to meet customer demand.
• Supply chain partner - partners throughout the supply chain that deliver finished products,raw materials and services.
• Supply chain operation - schedule for production activities.
• Suppy chain logistics - product delivery process.

- Effective and efficient SCM systems can enable an organizations to : 

• Decrease the power of its buyers
• Increase its own supplier power
• Increase switching costs to reduce the threat of substitute products or services.
• Create entry barries thereby reducing the threat of new entrants.
• Increase efficiencies while seeking a competitive advantage through cost leadership. 

- Effective and efficient SCM systems effect on Porter's Five forces.

Customer Relationship Management

- managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitbility.

- not just technology,but a strategy,process and business goal.

- an organization to : 

• Identify types of customers.
• Design invidual customers marketing campaigns.
• Treat each customer as an individual.
• Understand customer buying behaviors.

 Business Process Reengineering

- Business process : a standardized set of activities that accomplish a specific task,such as processing a customer's order.
- Business process reengineering (BPR) : the analysis and redesign workflow within and between enterprise.

• The purpose of BPR is to make all business processes best-in-class.

- Reengineering the Corporation : book written by Micheal Hammer and James Champy that recommends 7 pprinciples.

1. Organize around outcomes,not tasks.
2. Identify all the organization's processes and prioritize them in order of redesign urgency.
3. Integrate information processing work into real work that produces the information.
4. Treat geographically dispersed resources as though thy were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed and build control into the process.
7. Capture information once and at the source.

Finding Opportunity Using BPR

- Company can improve the way travels the road by moving from foot to horse and then horse to car.

- BPR looks at taking a different path, such as an airplane which ignore the road completely.

- Progressive Insurance mobile claims process.

- Types of change an organization can achieve,along with the magnitudes of change and the potential business benefit.

Enterprise Resource Planning

- Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing  enterprisewide information on all business operations.

- ENTERPRISE

- ERP systems collect data from across an organization and correlates the data generating and enterprisewide view.