CHAPTER 3 :STRATEGIC INITIATIVES FOR COMPLEMENTING ADVANTAGES

CHAPTER 3 : STRATEGIC INITIATIVES FOR COMPLEMENTING ADVANTAGES

QUESTION FROM THIS CHAPTER:

• List and describe the four basic components of supply chain management
• Explain customers relationship management systems and how they can help organuations understand their customers
• Summarize the importance of enterprise resource planning systems
• Identify how an organization can use business process reengineering to improve its business

STRATEGICS INITIATIVES:

- Organizations can undertake high-profile strategic initiatives including:

• Supply chain management (SCM)
• Customers relationship management (CRM)
• Business process re engineering (BPR)
• Enterprise resources planning (ERP)

Supply Chain Management (SCM)

-  It involves the management of information flows between and among stages in a supply chain to maximize      total supply chain effectiveness and profitability

List and describe the four basic components of supply chain management:

o  Supply chain strategy – strategy for managing all resources to meet customers demand for all product and                                         services

o  Supply chain partner – partners throughout the supply chain that deliver finished products, raw                                                          materials and services including pricing, delivery, and payment process along with                                          partner relationship monitoring metrics

o  Supply chain operation – schedule for production activities including testing, packaging, and preparation                                               for delivery

o  Supply chain logistics – product delivery process and element including orders, warehouse, carriers,                                                defective product return and invoicing

Effective and efficient SCM systems can enable an organization to;

o  Decrease the power of its buyers

o  Increase its own supplier power

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

o  Create entry barriers thereby reducing the threat of new entrants

o  Increase efficiency while seeking a competitive advantages through cost leadership

Effective and Efficient SCM systems effect on Porter's Five Forces:

Customers Relationship Management (CRM)

- Its involves managing all aspects of a customer’s relationship with an organization to increase customer          loyalty and retention and an organization’s profitability

- Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through    the implementation of CRM systems

Explain CRM systems and how they can help organizations understand their customers:

- CRM is not just technology, but a strategy, process and business goal that an organization must embrace       on an enterprise wide level. If an organizations does not embrace CRM  on enterprisewide level it will have  difficult time gaining a complete view of its customers. CRM can enable an organization to identfy types of  customers, design and specific marketing campaigns tailored to each individual customer, and understand  customer buying behaviour

- CRM can enable an organization to;

o      Identify types of customers

o      Design individual customer marketing campaign

o      Treat each customer as a individual

o      Understand customer buying behaviors

 

Business Process Reengineering (BPR)

Business Process-It is a standardized set of activities that accomplish a specific task, such as processing a                                customer’s order

Business Process Reengineering-the analysis and redesign of workflow within and between enterprise

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

o  The purpose of BPR is to make all business processes best in class. Companies frequently strive to improve their business process by performing tasks faster, cheaper, and better. Companies often follow the same indirect path for doing business, not realizing there might be a different, faster, and more direct way of doing business

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

-  Finding Opportunity Using BPR

o     A company can improve the way it travels the road by moving from foot to horse and then horse to car

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

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

Enterprises Resource Planning (ERP)

-It  integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations

-Keyword in ERP is “enterprise”.

-ERP systems collect data from across an organization and correlates the data generating an enterprise wide view

Summarize the important of enterprise resource planning systems:

• Enterprise resource planning systems provide organizations with consistency. Enterprise resource planning (ERP) intergrates all departments and functions throughout an organizations into a single IT system (or intergrated set of IT systems) so that employees can make decisions by viewing enterprisewide information on all business operations.