CHAPTER 3
STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

supply chain management

Defintion

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

4 basic components of supply chain management

• supply chain strategy - the strategy for manging all the resources required to meet customer demand for all products and services.
• supply chain partners - the partners chosen to deliver finished products, raw materials, and services including pricing, delivery and payments processes along with partner relationship monitoring metrics.
• supply chain operation - the schedule for production activities incliding testing, packaging and preparation for delivery. measurements for this component include productivity and quality.
• supply chain logistics - the product delivery processes and elements including orders, warehouse, carriers, defective product returns, and invoicing.

Effective and efficient SCM system can enable an organization to :

• decrease the power of its buyer.
• increase its own supplier power.
• increase switching costs to reduce the threat of substitute products and services.
• create entry barriers thereby reducing the threat of new entrants.
• increase efficiencies while seeking a competitive advantage through cost leadership.

Effective and efficient supply chain managements effect on Porter's five forces :

customer relationship management

Definition

• customer relationship management 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 and 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 campaign
• treat each customer as an individual
• understand customer buying behaviors

CRM overview

business process reengineering 

Definition

• business process - a standardized set of activities taht 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

Reengineering the corporation - book written by Michael Hammer and James Champy that recommends

 

Finding opportunity using BPR

• a company can improve the way it travels the road by moving from foot to horse and then to car
• BPR looks at taking a different path, such as an airplane which ignore the road completely.

Progressive Insurance Mobile Chain Process

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

enterprise resources planning

Definition

• enterprise resource planning - integrates all department and functions throughout an organization into a single IT system so that employees cam 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