Chapter 3 (Strategic Initiatives for Implementing Competitive Advantages)
After study this chapter we would able to list and describe the four basic components of supply chain management
§ Supply chain strategy is the strategy for managing all the resources required to meet customer demand for all products and services
§ Supply chain partners are the partners chosen to deliver finished products, raw materials, and services including pricing, delivery, and payment processes along with partner relationship monitoring metrics
§ Supply chain operation is the schedule for production activities including testing, packaging, and preparation for delivery
§ Supply chain logistics is the product delivery processes and elements including orders, warehouses, carriers, defective product returns, and invoicing
ü Supply chain management (SCM)
ü Customer relationship management (CRM)
ü Business process reengineering (BPR)
ü Enterprise resource planning (ERP)
What is Supply Chain Management?
Supply Chain Management (SCM) can be defined as the involves in management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.
There are four basic components of Supply Chain Management which come under
o Supply chain strategy – strategy for managing all resources to meet customer demand
o Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials, and services.
o Supply chain operation – schedule for production activities
Supply chain logistics – product delivery process
Effective and efficient SCM systems can enable an organization to
v Decrease the power of its buyers.
v Increase its own supplier power.
v Increase switching costs to reduce the threat of substitute products or services.
v Create entry barriers thereby reducing the threat of new entrants.
v Increase efficiencies while seeking a competitive advantage through cost leadership.
What is Customer Relationship Management?
CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide level. If an organization does not embrace CRM on an enterprisewide level it will have a difficult time gaining a complete view of its customers. CRM can enable an organization to identify types of customers, design specific marketing campaigns tailored to each individual customer, and understand customer-buying behaviors.
Customer Relationship Management also 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
Business Process Reengineering
Ø Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
Ø Business process reengineering (BPR) – the analysis and redesign of workflow within and between enterprises
The purpose of BPR is to make all business processes best-in-class
What is Enterprise Resource Planning?
• It is a systems collection data from across an organization and correlates the data generating an enterprise wide view