- Organizations can undertake high-profile strategic initiatives including:
- Supply Chain Management (SCM).
- Customer Relationship Management (CRM).
- Business Process Reengineering (BPR).
- Enterprise Resource Planning (ERP).
1. 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.
- For 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.
- Wal-Mart and Procter & Gamble (P&G) SCM:
- Effective and efficient SCM systems can enable an organization to:
-Decrease the power of its buyers.
-Increase its own supplier power.
-Increase switching cost to reduce the threat of substitute products or services.
-Create entry barriers 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:
2. CUSTOMER RELATIONSHIP MANAGEMENT (CRM):
- CRM 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.
- 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:
-Identify types of customers.
-Design individual customer marketing campaigns.
-Treat each customer as an individual.
-Understand customer buying behaviors.
- CRM overview:
3. BUSINESS PROCESS REENGINEERING:
- Business process - a standardized set of activities that accomplish a specific task, such as processing a customer's order.
- 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:
- Organize around outcomes, not task.
- Identify all the organization's processes and prioritize them in order of redesign urgency.
- Integrate information processing work into the real work that produces the information.
- Treat geographically dispersed resources as though they were centralized.
- Link parallel activities in the workflow instead of just integrating their results.
- Put the decision point where the work is performed, and build control into the process.
- Capture information once and at the source.
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.
>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.
4.ENTERPRISE RESOURCE PLANNING (ERP):
>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.
>Keyword in ERP is “enterprise”.
>ERP systems collect data from across an organization and correlates the data generating an enterprisewide view.