UNIT 1 : CHAPTER 3

Chapter 3: Strategic Initiatives for Implementing Competitive                           Advantages

Customer-facing processes a.k.a. called front-offline processes, result in a product or service received by an company’s external customer. It including fulfilling orders, communicating with customers, and sending out bills and marketing information.

Business-facing processes a.k.a. called back-office processes which is invisible to the external customer but essential to the effective management of the business. They include goal setting, day-to-day planning, giving performance feedback and rewards, and allocating resources.

Auto Insurance Claims Processes Reengineering

Strategic initiatives

                                i.            Supply Chain Management (SCM)

                              ii.            Customers Relationship Management (CRM)

                            iii.            Business Process Reengineering (BPR)

                            iv.            Enterprise Resources Planning (ERP)

SUPPLY CHAIN includes all parties involved, directly or indirectly, in obtaining raw materials or a product. Supply Chain Management (SCM) is the management of information flows between and among stages in a supply chain to maximize total supply effectiveness and corporate profitability. It manage and enhance relationships with primary goal of creating a fast, efficient, and low-cost network of business relationships that take product from concept to market. It also create the integrations process and information linkages between all participants in the supply chain.

Basic component:

§  Supply Chain Strategies

Strategies to manage all resources to meet customer demand.

                    

§  Supply Chain Partner

Partner throughout the supply chain that deliver finished products, raw materials, and services.

§  Supply Chain Operation

Schedule for production activities.

§  Supply Chain Logistics

Product delivery process.

Supply Chain for a Product Purchased from Walmart

The Effective SCM Systems :

        i.             Decrease the power of its buyers.
      ii.            Increase its own supplier power.
    iii.            Increase switching cost.
    iv.            Reduce the threat of substitute’s product or services.
      v.            Create entry barriers by reducing threat of new entrants.
    vi.            Seeking a competitive advantage through cost leadership.

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

CUSTOMER RELATIONSHIP MANAGEMENT involve customer’s relationship with an organization to increase customer loyalty and retention. CRM is a strategy, process, and business goal. It allows an company gain insights into customers’ shopping and buying behaviours in order to develop and implement enterprisewide strategies. CRM can enable to:

        i.             Identify types of customers.
      ii.            Design individual customer marketing campaigns.
    iii.            Treat each customer as an individual.
    iv.             Understand customer buying behaviours.

Business Process Reengineering (BPR)

BUSINESS PROCESS is standardized set of activities that accomplish a specific task, for example processing a customer’s order. It transform a set of inputs into a set of outputs – goods or services. By understanding this process, the manager know how to envision the entire company operates. Workflow includes tasks, activities and responsibilities required to execute each step in business process.

BUSINESS PROCESS REENGINEERING (BPR) is analysis and redesign of workflow within and between enterprises. Company must proceed evaluate all business processes in its value chain to avoid the pitfall and protect its competitive advantages.

                                                                Three phase of CRM

7 principle for BPR

Finding Opportunity Using BPR

Pitfalls of BPR is fails to keep up with competitors.

ENTERPRISE RESOURCES PLANNING interates all departments and functions throughout an organization into a single IT system so the employees can make decision by viewing that information on all business operations.  Keyword in ERP is enterprise.

Enterprise Resource Planning System