Learning Outcomes
3.3 Summarize the importance of enterprise resource planning systems
3.4 Identify how an organization can use business process reengineering to improve its business
SUPPLY CHAIN MANAGEMENT
- 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
- There are 4 basic components of supply chain management include
- Supply chain strategy - strategy for managing all resources to meet customer demand
- Supply chain partner - partners throughout the supply chain that deliver finished products,raw materials,and services
- Supply chain operations - schedule for production activities
- Supply chain logistics - product delivery process
- Wal-Mart and P&G implemented a tremendously successful SCM
- System links Wal-Mart distribution centers directly to P&G's manufacturing centers
- Each time a Wal-Mart customers purchases a P&G product,the system sends a message directly to P&G's factory for a reorder
- 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
- 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 profitability
- Many organization ,such as Charles Schwab and Kaiser permanente , have obtained great success through the implementation of CRM systems
- CRM systems help organizations understand and manage their customers
- CRM is not just technology , but a strategy process ,and business goal that an organization must embrace on an enterprisewide level
- CRM can enable an organization to :
- Identify types of customers
- Design individual customers marketing campaigans
- Treat each customer as an individual
- Understand customer buying behaviors
- Although CRM has many technical components , it is actually a process and business goal simply enchanced by technology
- Organization must first decide that they want to build strong customer relationships and then they determine how IT can support their goals
- Provide examples of bad customer experiences you have had in the past
- Business process - a standardized set of activities that accomplish a specific task , such as processing a customer's order
- Business process reegineering (BPR) - the analysis and redesign of workflow within and between enterprises
- The purpose of BPR is to make all business processes best-in-class
- Companies frequently strive to improve their business processes by performing tasks faster , cheaper , and better
- The above figure displays different ways to travel the same road
- A company could improve the way that it travels the road by moving from foot to horse and the from horse to car
- However , true BPR would look at taking a different path. A company could forget about travelling on the same old road and use an airplane to get its final destination.Companies often follow the same indirect path for doing business , not realizing there might be a different , faster ,and more direct way of doing business.
- A true BPR effort does more for a company than simply improve it by performing a process better , faster , and cheaper
- Progressive Insurance's BPR effort redefined best practices for its entire industry
- The figure displays the different types of change an organization can achieve , along with the magnitude of change and the potential business benefit
- Enterprise resource planning (ERP) - integrates all department and function throughout an organization into a single IT sytems so that employees can make decisions by viewing enterprisewide information on all business operations
- Keyword in ERP is "enterprise"
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