Assalamualaikum .....

chapter three

STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

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- strategy for managing all resources to meet customer demand

2.       Supply chain partners-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 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 efficiencies 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

•          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

BUSINESS PROCESS REENGINEERING

•          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

•          Reengineering the Corporation – book written by Michael Hammer and James Champy that recommends seven principles for BPR

FINDING OPPORTUNITY USING BPR

PITFALLS OF BPR

One hazard of BPR is that the company becomes so wrapped up in fighting its own demons that it falls to keep up with its competitors in offering new products or services.

ENTERPRISE RESOURCE PLANNING

•          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 generation an enterprise view.