THE MAKING OF CHAPTER 3

STRATEGIC INITIATIVES

Organizations can undertake high profile strategic initiatives including:

• 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

~>4 basic components of supply chain management include

1. Supply chain strategy (resources to meet demand)
2. Supply chain partner(partner deliver finished products)
3. Supply chain operation (schedule for production activities)
4. Supply chain logistic (product delivery process)

WAL-MART AND PROCTER & GAMBLE (P&G) SCM

~>Effective and efficient SCM systems can enable an organization to:

1. Decrease the power of its buyers
2. Increase its own supplier power
3. Increase switching cost
4. Create entry barriers
5. Increase efficiencies through cost leadership

Customer relationship management (CRM)

~>managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability

~>eg:Charles Schwab and Kaiser Permanente

~>CRM is not just technology but a strategy, process and business goal

~> Identify types of customers
~> Design individual marketing campaign
~> Treat each customer as individual
~> Understand customer buying behavior

Business Process Re engineering (BPR)

It is a standardized set of activities that accomplish a specific task, such as processing a customer’s order

The analysis and redesign of workflow within and between enterprises

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

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

- Types

Enterprises Resource Planning (ERP)

It  integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations

Keyword in ERP is “enterprise”.

ERP systems collect data from across an organization and correlates the data generating an enterprise wide view