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)
1. Supply Chain Management
- Involves 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:
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 service
iii. Supply chain operation – schedule for production activities
iv. Supply chain logistics – product delivery or 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 product or services
- Create entry barriers thereby reducing the threat of new entrants
- Increase efficiencies while seeking a competitive advantage through cost leadership
2. 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 can enable an organization to:
i. Identify types of customers
ii. Design individual customer marketing campaigns
iii. Treat each customer as an individual
iv. Understand customer buying behaviours
3. Business Process Reengineering (BPR)
- 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 process best-in-class
- Finding Opportunity Using BPR
i. A company can improve the way it travels the road by moving from foot to horse and then horse to car
ii. BPR looks at taking a different path, such as an airplane which ignore the road completely.
4. 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”
- ERP systems collect data from across an organization and correlates the data generating an enterprise wide view.
