CHAPTER 3 - STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Strategic Initiative

• 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 :

• supply chain strategic - strategic for managing all resources to meet customer demand

• supply chain partner - partners throughout the supply chain that deliver finished product, raw materials and services.   

• supply chain operation -  schedule for production activities  

• supply chain logistics -  product delivery process

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

• decrease the power of its buyers 

•  increase its own supplier power 

•  increase switching costs to reduce the threat of substitute product or services 

•  create entry barriers thereby reducing the threat of new entrants 

•  increase efficiency while seeking a competitive advantage through cost leadership.

Customer relationship management (CRM) 

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

• CRM can enable an organization to : 

• identify types of customers  

•  design individual customer marketing campaigns 

•  treat each customers as an individual 

•  understand customer buying behaviors.

Business process reengineering (BPR)

• 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 of workflow within and between enterprise

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

Seven principle of BPR 

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 the real work that produces the information
4. treat geographically dispersed resources as though they 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 sources.

Finding opportunity using BPR  

• A company can improve the way it travels the roads 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 .
• types of change an organization can achieve, along with the magnitudes of change and the potential business benefit.

Enterprise resource planning (ERP)

• integrates all department 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 system collect data from across an organization and correlates the data generating an enterprise wide view.