CHAPTER 3

STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Supply Chain Management (SCM)

- SCM involves the management of information flows between and among stages in a suplly chain to maximize total supply chain effectiveness and profitability. The  four basic components of SCM management are:

• [Supply Chain Strategy]= the strategy for managing all the resources required to meet customers demand for all of the products and services
• [Supply Chain Partners]= the partners chosen to deliver finished products, raw materials and servicesincluding pricing, delivery and payment processes along with partner relationship monitoring metrics
• [Supply Chain Operation]= the schedule for production activities including testing, packaging and preparation for delivery. Measurements for this component including productivity and quality
• [Supply Chain Logistics]= the product delivery process and elements including orders, warehouse, carriers, defective product returns and invoicing

 E.g: the diagram demonstrates how the supply chain is dynamic and involves the constant flow of information between the different parties.

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 effiiciencies while seeking a competitive advantage through cost leadership

Customer Relationship Management (CRM)

- CRM involves managing all aspects of a customers' relationship with an organizationto increase customers loyalty and retentionand an organization's profitability

CRM Strategy

CRM aside from a form of technology, it is also a strategy an organization must embrace on a enterprise level. CRM system also help organizations identify customers and design specific marketing campaign tailored to each customer, thus increase customer spending. It is also allow organizations to treat customers as an individuals, gaining important insights into their buying preferences and behaviors and leading to increased sales, greater profitability, and higher rates of customer loyalty.

Business Process Reengineering (BPR)

- A standardardized set of activities that accomplish a specific task, such as processing a customers' orders and also redesign of workflow within and between enterprises.

Finding Opportunity Using BPR

- 7 principle of business process reengineering:

1. Organize around outcomes,not tasks
2. Identify all the organization's processes 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 the process
7. Capture information once and at the source

Enterprise Resource planning 

- Identify how an organization can use business process reengineering to improve its business. E.g: company A resolution cycle time is 3-4 weeks in order to claim for insurance while company B resolution time is 40 minutes to claim for insurance.