Lect 7 Scm and Crm

8/2/2019 Lect 7 Scm and Crm

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Enterprise systems 1

SCM and CRM systems


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Enterprise systems

Based on suite of integrated software modulesand common central database

Integrate information from across companys

divisions, departments, key business processesin the four functional areas

Updated information made available to allbusiness processes

Generate enterprise-wide data for managementanalyses


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How enterprise systemswork


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Enterprise systems

Built around thousands of predefined business

processes that reflect best in industry practices

Companies map business processes to

enterprise systems processes for desired

functions

Configuration tables allow tailoring of system

System software can be rewritten in part, but

may degrade performance and process

integration


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us ness processessupported by enterprise

systems Financial and accounting: Generalledger, accounts payable, cost-centreaccounting, financial reporting, etc.

Human resources: Personneladministration, benefits accounting,time management, compensation,

etc. Manufacturing and production:

Procurement, inventory

management, purchasing, shipping,


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Business value of enterprisesystems

Increasing operational efficiency

Helping respond to customer requests rapidly

Producing, procuring, shipping right amounts

Enforcing standard practices and datathroughout company

Providing firm-wide information to helpmanagers make better decisions

Allowing senior management to easily find outat any moment how a particular organizationalunit is performing or to determine whichproducts are most or least profitable


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Supply Chain

Network of organizations and businessprocesses for:

Procuring raw materials

Transforming them into intermediate and finishedproducts

Distributing finished products to customers

Includes secondary and tertiarysuppliers

Upstream portion: Suppliers Downstream portion: Distributors


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Textile and clothing supplychain


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Nikes Supply Chain


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What is supply chainmanagement

Supply chain management (SCM) isthe oversight of materials,information, and finances as they

move in a process from supplier tomanufacturer to wholesaler toretailer to consumer.

Supply chain management involvescoordinating and integrating theseflows both within and among

companies.


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Components of SCM

Plan

Source

Make Deliver

Return


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Plan

The strategic portion of SCM.

Companies need a strategy for

managing all the resources that gotoward meeting customer demandfor their product or service.

A big piece of SCM planning isdeveloping a set of metrics tomonitor the supply chain so that it isefficient, costs less and delivers high

quality and value to customers.


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Source

Companies must choose suppliers todeliver the goods and services theyneed to create their product.

Therefore, supply chain managersmust develop a set of pricing,delivery and payment processes with

suppliers and create metrics formonitoring and improving therelationships.

SCM managers can put together


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Make

The manufacturing step.

Supply chain managers schedule the

activities necessary for production,testing, packaging and preparationfor delivery.

This is the most metric-intensiveportion of the supply chainonewhere companies are able tomeasure quality levels, production

output and worker productivity.


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Deliver

Also may be referred to as logistics

Companies coordinate the receipt of

orders from customers Develop a network of warehouses,

pick carriers to get products to

customers and set up an invoicingsystem to receive payments.


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Return

Supply chain planners have to createa responsive and flexible network forreceiving defective and excess

products back from their customersand supporting customers who haveproblems with delivered products..


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Information and supplychain management

Supply chain inefficiencies E.g. parts shortages, excessive inventory

Waste up to 25% of operating costs

Caused by inaccurate or untimely information Uncertain product demand

Late shipments from suppliers

Safety stock: Kept as buffer for lack of

flexibility in supply chain adds to costs


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Information and supplychain management

Bullwhip effect Demand for product gets distorted as it is estimated

by successive members in supply chain, causingexcess stockpiling of inventory, warehousing, shipping

costs Just-in-time strategy

Perfect information about supply and demand so thatcomponents arrive at moment they are needed and

finished goods are shipped as they leave assemblyline


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Supply chain managementsoftware

Used to track demand, supply,manufacturing status, logistics (i.e.where things are in the supply chain),

and distributionTo share data with supply chain

partners at an ever increasing rate.


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Supply chain managementapplications

Two main categories

Supply chain planning systems

Supply chain execution systems

upp y c a n p ann ng


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upp y c a n p ann ngsystems

Demand planning

Order planning

Advanced scheduling andmanufacturing planning

Distribution planning

Transportation planning


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An important use ofSmartForecastsdemand planningsoftware from Smart

Software is toforecast futuredemand for productswhere demand isintermittent orirregular. Shown hereis a forecast graphfor the distribution oftotal cumulativedemand for a sparepart over a four-month lead time.

Supply Chain Management Systems


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Supply chain executionsystems

Manage flow of products throughdistribution centres and warehouses toensure products delivered to right

locations in most efficient manner Order commitments

Final production

Replenishment

Distribution management

Reverse distribution


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Supply chain managementand the Internet

Before Internet, difficult to share supplychain information with external partnersor internally because of incompatible

technology platforms Pre Internet the aspirations of supply

chain software devotees were limited toimproving their ability to predict

demand from customers and make theirown supply chains run more smoothly.

Internet enables:

Intranets and extranets to share information


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Internet as supply chainenabler

Companies can connect their supplychain with the supply chains of theirsuppliers and customers together in

a single vast network that optimizescosts and opportunities for everyoneinvolved.

B2B ecommerce


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Benefits of informationsharing on the supply chain

The payoff of timely and accuratesupply chain information is the abilityto make or ship only as much of a

product as there is a market for. Thisis the practice known as just-in-timemanufacturing, and it allows

companies to reduce the amount ofinventory that they keep. This cancut costs substantially, since you nolonger need to pay to produce andstore excess goods


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Supply chain collaborations

Retailers and manufacturers sharinginformation

a ar an roc er an


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a - ar an roc er anGamble

These two companies startedcollaborating back in the '80s whenretailers shared very little

information with manufacturers.The two giants built a software

system that hooked Proctor &

Gamble up to Wal-Mart's distributioncentres. When Proctor & Gamble'sproducts run low at the distribution

centres, the system sends an

a ar an roc er an


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a - ar an roc er anGamble

With this kind of up-to-dateinformation, Proctor & Gamble knowswhen to make, ship and display more

products at the Wal-Mart stores. No need to keep products piled up in

warehouses awaiting Wal-Mart's call.

Invoicing and payments happenautomatically too.

The system saves Proctor & Gamble

so much in time, reduced inventory


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Obstacles to installing andusing supply chain software

Gaining trust form suppliers andpartners

Internal resistance to change

Many mistakes after implementation


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Impact of globalisation onthe supply chain

Often more difficult to shareinformation to share information withoverseas manufacturing partners

Greater distances increase logisticalcomplexities

en ca on


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en ca ontechnology and the

supply chain RFID tags are essentially advancedbarcodes

RFID tags can be read automaticallyby electronic readers

Whereas barcodes only identify theproduct, RFID tags can tell what theproduct is, where it has been, when itexpiresessentially whateverinformation a company wishes to

program.


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identification (RFID)technology and the

supply chain As RFID technologies in the supplychain spread into the operations ofmore manufacturers, parts suppliers

and retailers, they will transform thesupply chain as we know it today.


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Hurdles to adoption of RFIDtechnology

High cost of infrastructure

Lack of ROI for small to mediumsized organisations


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Some terminology

Push-based model (Build-to-stock) Production master schedules based on forecasts or best

guesses of product demand; products pushed to customers

Pull-based model (Demand-driven, build-to-order)

With IT, manufacturers can use only order demand informationto drive schedules and procurement of components or rawmaterials

Sequential supply chains Information, materials move sequentially

Concurrent supply chains With IT, information moves in many directions simultaneously

h ll b d l


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Push V Pull based supplychain models


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S l Ch i


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Supply ChainManagement Software

Improve your supply chain network

Minimised delays

Enhanced collaboration Reduced costs

Article available here

http://www.business-software.com/erp/su
http://www.business-software.com/erp/supply-chain/benefits-of-supply-chain-erp.phphttp://www.business-software.com/erp/supply-chain/benefits-of-supply-chain-erp.php


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Real world examples

Wal-Mart

http://www.cio.com/article/143451/How_Wal_Mart

Nike

http://www.cio.com/article/32334/Nike_Rebounds_

Nintendo

http://www.cio.com/article/445316/Nintendo

us omer e a ons p
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us omer e a ons pManagement Systems

(CRM) Capture, consolidate, analyze customer data anddistribute results to various systems and customertouch points (contact points) across enterprise

Provide single enterprise view of customers

Provide customers single view of enterprise at touchpoints

Provide analytical tools for determining value, loyalty,profitability of customers

Assist in acquiring new customers, providing betterservice and support to customers, customize offeringsto customer preferences, provide ongoing value toretain profitable customers

C t R l ti hi
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Customer RelationshipManagement (CRM)

CRM f th
http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_


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CRM focuses on therelationship

Successful organizations use threesteps to build customer relationships:

determine mutually satisfying goalsbetween organization and customers

establish and maintain customerrapport

produce positive feelings in theorganization and the customers
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CRM software

CRM on demand

CRM on demand software is a Softwareas a Service (SaaS) product.

This means that another party, whomanages and maintains the software foryou, hosts the CRM software.

CRM onsite
http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_


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CRM on demand

Salesforce.com

Microsoft Dynamics

Oracle On Demand RightNow

SAP Business ByDesign
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CRM on site

Oracle's Siebel

SAP

Microsoft CRM Consona Onyx

CDC Pivotal

a are a van ages o os e or


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a are a van ages o os e oron-demand CRM vs. on-premise

and vice versa?

On-demand CRM is often a goodchoice for companies that want toimplement standard CRM processes,

are able to use out-of-the-box datastructures, with little or no internal ITsupport, and dont require complex

or real-time integration with backoffice systems.

Getting hosted CRM system working

shouldnt take as long as a traditional
http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_http://www.cio.com/article/445316/Nintendo_Wii_Shortage_Shrewd_Marketing_or_Flawed_Supply_Chain_


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a es orce au oma on
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a es orce au oma on(SFA) modules

Enable focusing efforts on mostprofitable customers

Enables sharing customer and prospect

information Helps reduce cost per sale and cost of

acquiring, retaining customers
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Customer service modules

Assigning and managing customerservice requests

E.g. managing advice phone lines, Web

site support
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Marketing modules

Capturing prospect and customer data, Providing product and service

information

Qualifying leads for targeted marketing Scheduling and tracking direct-

marketing mailings or e-mail

Analysing customer and


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Analysing customer andmarketing data

Identifying profitable andunprofitable customers

Designing products and services tosatisfy specific customer needs andinterests

Identifying opportunities for cross-selling


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CRM software capabilities

Customer Loyalty
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Customer LoyaltyManagement Process Map

wo ma n ca egor es o
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wo ma n ca egor es oCRM

Operational CRM

Customer-facing applications, e.g. toolsfor sales force automation, call centre

and customer service support,marketing automation

Analytical CRM

Applications that analyse (OLAP, datamining, etc.) customer data

Based on data warehouses consolidating

data from operational CRM systems and

Analytical CRM data
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Analytical CRM datawarehouse
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Business value of CRM

Increased customer satisfaction Reduced direct marketing costs More effective marketing

Lower costs for customer acquisitionand retention

Increased sales revenue By identifying profitable customers and segments for

focused marketing and cross-selling Reduced churn rate (number of

customers who stop using or purchasingproducts or services)
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Other advantages

"Cross Sell" and "Up Sell" ProductsMore Effectively

CRM systems facilitate cross-selling

(offering customers complimentaryproducts based on their previouspurchases) and up-selling (offeringcustomers premium products in the

same category).

It helps them to gain a betterunderstanding of customers and

anticipate their purchases (e.g.
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Other advantages

Discover New Customers

CRM systems help the organisation inidentifying potential customers. By

keeping a track of the profiles of theirexisting clientele, the business caneasily come up with a strategy todetermine the kind of people they

should target such that it returns themmaximum opportunity.

For example, if several students in a

university sign up for a particular mobile

leading the way in CRM
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leading the way in CRMimplementations

The financial services andtelecommunications industries setthe pace in CRM. Other industries are

on the CRM bandwagon includeconsumer goods makers and retailersand high tech firms.

Case study Microsoft Ireland
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Case study Microsoft Irelandand Londis

Enhancing and maintaining servicelevels to ADM Londis retailersnecessitated wider corporate

engagement in resolving customerqueries, as well as to give managersthe ability to view the number and

status of departmental queries As part of a 3 million supply chain

initiative to deliver improved service

levels to retailers, the company
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Case study (2)

Prior to the CRM implementation, thegroup had defined service leveltargets, but had been unable to

accurately measure how successful ithad been in terms of meeting thosetargets.

The CRM system provided up to theminute views on how effectivelyqueries were being resolved.


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Case study(3)

After implementation service levelsimproved from 95% to 99%satisfaction rating

The next phase of the CRM projectwill be to deliver a self servicesolution via the web to the retailers.

This enhancement will allow retailersto log their own calls at any time ofthe day or night, to facilitate the
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Lect 7 Scm and Crm

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Transcript of Lect 7 Scm and Crm