CHAPTER 3

STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGE

Strategic Initiative:

⇒ Supply Chain Management (SCM)
⇒ Customer Relationship Management (CRM)
⇒ Business Process Reengineering (BPR)
⇒ Enterprise Resource Planning (ERP)


SUPPLY CHAIN MANAGEMENT (SCM)

The management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

BASIC COMPONENTS

Components	Meaning
SUPPLY CHAIN STRATEGY	Managing all resources to meet customer demand
SUPPLY CHAIN PARTNER	Finished products, raw materials and services
SUPPLY CHAIN OPERATION	Schedule for production activities
SUPPLY CHAIN LOGISTIC	Product delivery process

Effective and Efficient SCM system 

- Decrease the power of its buyers

- Increase its own supplier  power

- increase switching costs to reduce the treat of substitute products or service

- create entry barriers thereby reducing the treat of new entrance

Customer relationship management (CRM)  involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and organization's profitability. CRM is not just a 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 customers buying behaviors.

Business process  is a standardized set of activities that  accomplish a specific task such as processing a customer's order.

Business process reengineering (BPR)  involves the analysis and redesign of workflow within and between  enterprises. The purpose of BPR is to make all business process best in class.

Reengineering the Corporation is a book written by Michael Hammer and James Champy that recommends seven principle for BPR which is :

1. Organize around outcomes, no task
2. Identify all the organization's process and prioritize them in order of redesign urgency.
3. Integrate information processing work into the real work that produce the information. 
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their result.
6. Put the decision point where the work is performed and build control in the process.
7. Capture the information once and at the source.

Enterprise resource planning (ERP)  involves integrate all departments and functions throughout an organizations into a single IT system so that employees can make decision by viewing enterpriswide information on all business operations. ERP system also collect data from across an organization and correlates the data generating an enterprisewide view.

Thank you, :)