Chapter 3: Strategic Initiative for Implementing Competitive Advantage

Strategic Iniatiative 


*Supply chain management(SCM)
*Customer relantionship management(CRM)
*Business process reengineering(BPR)
*Enterprise resources planning(ERP)
  

Supply Chain Management

  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. The four basic components of supply chain management are:

1. Supply chain strategy - the strategy for managing all the resources required to meet customer demand for all products and services.
2. Supply chain partners -the partners chosen to deliver finished products, raw materials, and services including pricing, delivery, and payment processes along with partner relationship monitoring metrics.
3. Supply chain operation - the schedule for production activities including testing,packaging and preparation for delivery. Measurements for this component include productivity and quality.
4. Supply chain logistics - the product delivery processes and elements including orders,warehouse, carriers, defective product returns, and invoicing.  

                         

                             

                                        Effective and Efficient Supply Chain Management's Effect on Porter's Five Forces

Effective and efficient supply chain management systems 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 products 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

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 can enable an organization to:

–Identify types of customers

–Design individual customer marketing campaigns

–Treat each customer as an individual

–Understand customer buying behaviors

3. 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 enterprises

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

                          

                         

Finding Opportunity Using BPR

                             

                                Better, Faster, Cheaper of BPR

*A company can improve the way its travels the road by moving from foot to horse and then

  horse to car.

*BPR looks like taking a different path such as airplane which ignore the road completely.

Enterprise Resource Planning