Optimizing a Company’s Internal Processes
Optimizing a Company’s Internal Processes
Although the value chain framework emphasizes the activities of the individual firm, it can be extended, as in Figure 2.6, to include the firm in a larger value system. This value system is a collection of firm value chains connected through a business relationship and through technology. From this perspective, a variety of strategic opportunities exist to use information resources to gain a competitive advantage. Understanding how information is used within each value chain of the system can lead to new opportunities to change the information component of value‐added activities. It can also lead to shakeouts within the industry as firms that fail to provide value are forced out and as surviving firms adopt new business models.
Opportunity also exists in the transfer of information across value chains. For example, sales forecasts gener- ated by a manufacturer, such as a computer or automotive company, and linked to supplier systems create orders for the manufacture of the necessary components for the computer or vehicle. Often this coupling is repeated from manufacturing company to vendor/supplier for several layers, linking the value chains of multiple organizations. In this way, each member of the supply chain adds value by directly linking the elements of its value chains to others.
Optimizing a company’s internal processes, such as its supply chain, operations, and customer relationship processes, can be another source of competitive advantage. Tools are routinely used to automate the internal oper- ations of a firm’s value chain, such as supply chain management (SCM) to source materials for operations, enterprise resource planning (ERP) systems to automate functions of the operations activities of the value chain, and customer relationship management (CRM) systems to optimize the processing of customer information. These systems are discussed in more detail in Chapter 5.
In an application of the value chain model to the Zara example discussed earlier, Figure 2.7 describes the value added to Zara’s primary and support activities provided by information systems. The focus in Figure 2.7 is on value added to Zara’s processes, but suppliers and customers in its supply chain also realize the value added by information systems. Most notably, the customer is better served as a result of the systems. For example, the stores place orders twice a week over personal digital assistants (PDAs). Each night, managers use their PDAs to learn about newly available garments. The orders are received and promptly processed and delivered. In this way, Zara can be very timely in responding to customer preferences.
You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.
Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.
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The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.