Chapter 3 : Strategic Initiative for Implementing Competitive Advantages.

Organizations can undertake high-profile strategic initiatives including:

• Supply chain management (SCM)
• Customer relationship management (CRM)
• Business process reengineering (BPR)
• Enterprise resource planning (ERP)

Supply Chain Management (SCM) – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

    Four basic components of supply chain management include:

1.       Supply chain strategy – strategy for managing all resources to meet customer demand

2.       Supply chain partner – partners throughout the supply chain that deliver finished products,                                        raw materials, and services.

3.       Supply chain operation – schedule for production activities

4.       Supply chain logistics – product delivery process

•          Effective and efficient SCM systems can enable an organization to:

1.       Decrease the power of its buyers

2.       Increase its own supplier power

3.       Increase switching costs to reduce the threat of substitute products or services

4.       Create entry barriers thereby reducing the threat of new entrants

5.       Increase efficiencies while seeking a competitive advantage through cost leadership

         Customer Relationship Management

•          Customer relationship management (CRM) – involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization's profitability

•          CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide level .

•          CRM can enable an organization to :

1.       Identify types of customers

2.       Design individual customer marketing campaigns

3.       Treat each customer as an individual

4.       Understand customer buying behaviors

         Business Process Reengineering

  Business process reengineering (BPR) – the analysis and redesign of workflow within and between enterprises

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

   Reengineering the Corporation – book written by Michael Hammer and James Champy that                                                    recommends seven principles for BPR

        Finding Opportunity Using BPR

•       A company can improve the way it travels the road by moving from foot to horse and then horse to car
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•         BPR looks at taking a different path, such as an airplane which ignore the road completely
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       Finding Opportunity Using BPR

•         Progressive Insurance Mobile Claims Process  
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       Finding Opportunity Using BPR

•         Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit
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       Enterprise Resource Planning

•         Enterprise resource planning (ERP) – 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    

       

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        Keyword in ERP is “enterprise”

      

 Enterprise Resource Planning

•           Sample data from a sales database

        

    Enterprise Resource Planning

•           Sample data from an accounting database

       

  Enterprise Resource Planning

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