Strategic initiative
Organizations can undertake high-profile
strategic initiatives including:
ᴥ
Supply chain management (SCM)
ᴥ
Customer relationship management (CRM)
ᴥ
Business process reengineering (BPR)
ᴥ
Enterprise resource planning (ERP)
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
Four basic components of supply chain management
include:
i.
Supply chain strategy – Strategy
for managing all resources to meet customer demand
ii.
Supply chain partner – Partners
throughout the supply chain that deliver finished products, raw materials, and
services.
iii.
Supply chain operation – Schedule
for production activities
iv.
Supply chain logistics – Product delivery process
Effective and efficient SCM 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
Effective and efficient SCM systems effect on Porter’s Five
Forces
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 enterprise wide
level.
·
CRM can enable an organization to:
ü Identify
types of customers
ü Design
individual customer marketing campaigns
ü Treat
each customer as an individual
ü Understand
customer buying behaviors
Business Process Reengineering (BPR)
Ø Business process
·
A standardized set of activities that
accomplish a specific task, such as processing a customer’s order.
Ø Business process re-engineering (BPR)
·
The analysis and redesign of workflow
within and between enterprises.
·
The purpose of BPR is to make all business
processes best-in-class.
·
Types of change an organization can achieve,
along with the magnitudes
of change and the potential business benefit.
SEVEN PRINCIPLES OF BUSINESS PROCESS
RE-ENGINEERING
1)
Organize around outcomes, not tasks.
2)
Identify all the organization’s process and
prioritize then in order of
redesign urgency.
3)
Integrate information processing work into
the real work that produces
the information.
4)
Treat geographically dispersed resources as
though they were
centralized.
5)
Link parallel activities in the workflow
instead of just integrating their
results.
6)
Put the decision point where the work is
performed, and build control
into process.
7)
Capture information once and at the source.
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.
·
Progressive Insurance Mobile Claims Process.
·
Types of change an organization can
achieve, along with the magnitudes
of change and the potential business benefit.
Pitfalls
of BPR
ᴥ
Fails to keep up with competitors
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 enterprise wide
information on all business
operations.
·
Keyword in ERP is “enterprise”.
·
Data from a sales database.
·
Data from an accounting database.
·
ERP systems collect data from across an
organization and correlates.
·
The data generating an enterprise wide view.
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