Learning objectives:
3.1. List and describe the four basic components of supply chain management
3.2. Explain customer relationship management systems and how they can help organization understand their customers.
3.3. Summarize the importance of enterprise resource planning systems.
3.4. Identify how an organization can use business process re-engineering to improve its business.
Strategic initiative.
- Organizations can undertake high-profile strategic initiatives including:
ü Supply Chain Management (SCM)
ü Customer Relationship Management (CRM)
ü Business Process Re-engineering (BPR)
ü Enterprise Resources Planning (ERP)
1. Supply Chain Manangement (SCM)
l SCM is the management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and corporate profitability.
l Manufacturing efforts nowadays has reached across the entire supply chain, including customers, customers’ customers, suppliers, suppliers’ suppliers.
l Today’s supply chain is an intricate network of business partners linked through communication channels and relationships.
l SCM manage and enhance these relationships with the primary goal of creating a fast, efficient, and low-costs network of business relationships that take products from concept to market.
l It also create integration or tight process and information linkages between all participants in the supply chain.
Four basic components of Supply Chain management include:
a. Supply Chain Strategy/plan - strategy for managing all the resources to meet customer demand.
b. Supply Chain Partner/source - partners throughout the supply chain that deliver finished products, raw materials and services.
c. Supply Chain Operation/make - schedule for production activities.
d. Supply Chain Logistic/deliver - product delivery process or plan for transportation of goods to customer.
e. Supply Chain Return - Support customers and products return.
Effective and efficient supply chain management system can enable an organization to:
ü Decrease the power of its buyer.
ü Increase its own supplier power.
ü Increase switching costs to reduce the threat of substitutes products or services.
ü Create entry barriers thereby reducing the threat of new entrants.
ü Increase efficiency while seeking a competitive advantages through cost leadership.
2. Customer Relationship Management (CRM)
u the CRM systems was developed by Siebel, allows brokerage firm to trace each interaction with a customer or prospective customer and then provide services (retirement planning, for instance) to each customers’ needs and interests.
u Customer Relationship Management involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability.
u Many organizations such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems.
u CRM allows an organization to gain insight into customers’ shopping and buying behaviors in order to develop and implement enterprise-wide strategies.
u Implementing CRM system allows a company to operate more efficiently and effectively in the area of supporting customers needs.
u CRM moves far beyond technology by identifying customers needs and designing specific marketing campaign tailored to each.
u It also enables a firm to treat customers as individuals, gaining important insights into their buying preferences and shopping behaviors.
u CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprise-wide level.
u CRM can enable organization to:
- Identify types of customers.
- Design individual customer marketing campaigns
- treats each customer as an individual
- understand customers buying behavior.
3. Business Process Re-engineering (BPR)
n Business process is a standardize set of activities that accomplish a specific task, such a processing a customers’ order.
n It also transform a set of inputs into a set of outputs such as goods and services.
n Understanding business process helps a manager envision how entire company operates.
n Workflow includes the tasks, activities, and responsibilities required to execute each step in a business process.
n Business Process Re-engineering (BPR) is the analysis and redesign of workflow within and between enterprise.
n When selecting a business process to re-engineer, wise managers focus on those core processes that are critical to performance, rather than marginal process that have little impact.
n The effort to re-engineer a business process as a strategic activity requires a different mind-set than that required in continuous business process improvement program.
n Managers focusing on re-engineering can instead use several criteria to identify opportunities:
- Is the process broken?
- is it feasible that re-engineering of this process will succeed?
- does it have a high impact on the agency’s strategic direction?
- Is it antiquated?
- Does it fall far below best-in-class?
n Re-engineering the Corporation is a book written by Michael Hammer and James Champy that recommends seven principle for BPR.
n The seven principle of BPR are:
- Organize around outcomes not tasks.
- Identify all the organization’s processes and prioritize them in order to redesign urgency.
- Integrate information processing work into the real work that produces the information.
- Treat geographically dispersed resources as tough they were centralized .
- Linked parallel activities in the work flow instead of just integrating their results.
- Put the decision point where the work is performed and build control into the process.
- Capture information once and at the source.
Finding opportunity using BPR.
- A company can improves the way it travels the road by moving from foot to horse and then from horse to car.
- BPR looks at taking a different path, such as an airplane which ignore the road completely.
- New business process enabled Progressive Insurance Mobile Claim such as improve its claim settlement time from 31 days to four hours, for instance.
- BPR also types of change an organization can achieve along with the magnitudes of changed and the potential business benefit.
Pitfalls of BPR:
- Fails to keep up with competitors.
4. Enterprise Resource Planning (ERP)
l ERP integrates all departments and functions throughout an organization into a single IT systems. So that employees can make decision by viewing enterprise-wide information on all business operations.
l The keyword in ERP is “ enterprise”
l Original ERP implementation promised to capture all information onto one true “enterprise” system with the ability to touch all the business processes within the organization.
l The issues ERP intends to solve is that knowledge within a majority of organizations currently resides in silos that are maintained by a select few, without the ability to be shared across the organization, causing inconsistency across business operations.
l ERP systems collect data from across an organization and correlates the data generating an enterprise-wide view.
No comments:
Post a Comment