Chapter 3: Strategic Initiatives for Implementing Competitive Advantage Business Process Reengineering
Business process – standardized set of activities that accomplish a specific task, such as processing a customer’s order.
∙ Transforms a set of inputs into a set of outputs- goods and services- for another person or process by using people and tools
Workflow- includes the tasks, activities, and responsibilities required to execute each step in a business process. If you want to learn more check out What are the three parts of a long bone?
Don't forget about the age old question of What does government mean?
Business Process Reengineering BPR- is the analysis and redesign of workflow within and between enterprises
∙ Companies pride themselves on their product/services, but is no use if customers don’t receive what they want in a timely hassle-free manner. ∙ Cross-functional process
We also discuss several other topics like What is the general rule for study time?
Sample Business Process
o Creating financial statements
o Paying of accounts payable We also discuss several other topics like How to make the branch diagram?
o Collecting of accounts receiving
∙ Marketing and Sales
o Promoting of discounts
o Communicating marketing campaigns
o Attracting customers
o Processing sales Don't forget about the age old question of What is another word for decompose?
∙ Operations management
o Ordering inventory
o Creating production schedules
o Manufacturing goods
∙ Human Resources
o Hiring employees
o Enrolling employees in health care
o Tracking vacation sick time
Customer-facing processes (front-office) process- results in a product or service received by an organization’s external customer.
∙ Fulfilling orders, communicating with customers, sending out bills, and marketing information
Business-facing processes (back-office processes) – invisible to the external customer but essential to the effective management of the business; they include goal setting, planning day-to day planning, giving performance feedback and rewards, and allocating resources.
∙ Creating value for customers is the leading reason for instituting BPR
∙ Focuses on revamping process completely rather than using original process as a starting off point
1. Customer-Facing Processes
a. Example: order processing, customer service, sales process, customer billing, order shipping
2. Industry- Specific Customer Facing Processes We also discuss several other topics like What is the purpose of generally accepted accounting principles?
a. Example: banking-loan processing, insurance- claims processing, government- grant allocation, hotel-reservation handling, airline baggage handling
3. Business-Facing Processes
a. Example: strategic planning, tactical planning, budget forecasting, training, purchasing
Supply Chain Management
Supply chain – includes all parties involved, directly or indirectly, in obtaining materials or products.
Parts raw material storageproductiondistribution to
Supply chain management (SCM) – is the management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and corporate profitability.
∙ Create fast, efficient, and low cost network or business relationships that take products from concepts to market.
∙ SCM create the integrations and information linkage between all participates in supply chain
∙ Decrease buyers power and increase supplier power
∙ increase efficiencies while seeking competitive advantage 5 Basic Supply Chain Activities
1. Plan- prepare to manage all resources required to meet demand 2. Source- build relationships with suppliers to produce raw materials 3. Make- manufacture products and create production schedules 4. Plan for transportation of goods to customers
5. Support customers and product returns
Customer Relationship Management
Today’s marketplace is more customer focused than sales focused due to competitors being a click away
Customer Relationship Management (CRM)– involves managing all aspects of a customer’s relationships with an organization to increase customer loyalty and retention and an organizations profitability.
∙ Allows organization to gain insight on customers
∙ CRM tracks communication between customer and organization ∙ Firms can find their most valuable customers with RFM formula o How recently customer purchased items
o How frequently a customer purchases items
o The monetary value of each customer purchase
∙ After the firm collects this CRM info it searches for patterns I.E. a customer only buying at the peak of the season, so the firm offers a seasonal deal.
Three phases of CRM
a. Customer identification: Asking what happened
b. Example: how many customers do we have?
c. Uses CRM reporting technologies
a. Customer segmentation: asking why it happened?
b. Example: why did sale not meet forecast
c. Uses CRM analysis technologies
a. Customer Prediction: asking what will happen
b. Example: which products will our customers buy?
c. Uses CRM predicting technologies
Enterprise Resource Planning (ERP)
∙ Integrates all departments and functions through an organization into a single IT system so that employees can make decisions by viewing enterprise-wide information on all business operations