Transcript PPT Notes

CHAPTER 9 & 10
Customer Relationship Management
Supply Chain Management
OUTLINE
 Customer Relationship Management (CRM)
 Definition
 Operational CRM
 Analytical CRM
 Supply Chain Management (SCM)
 Supply Chains
 IT Support for Supply Chain Management
Interorganizational Systems (IOS)
Figure 2.2
From Neighborhood Stores…….
Personal
To Today…..
Mobile population
The Web
Giant malls
Impersonal
Customer Touch Points
Web
Computer
Physical
Store
Smart
Phone
Customer
Service
CUSTOMER
Service
Center
Email
Direct
Mail
Sales
Representative
Field
Service
Technician
Customer Relationship Management:
Motivations
 It costs six times more to sell to a new
customer than to sell to an existing one.
 A typical dissatisfied customer will tell 810 people.
 By increasing the customer retention rate
by 5%, profits could increase by 85%.
 70% of complaining customers will remain
loyal if their problem is solved
Principles of CRM
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A customer-centered organizational
strategy
“Treat different customers differently”
Keep profitable customers and
maximize lifetime revenue from them
Components of a CRM System
Customer-facing Applications
• Sales
• Marketing
• Customer Service and
Support
• Campaign Management
Customer
Data
Warehouse
Customer-touching Applications
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•
•
•
•
•
Search and Comparison
Customized Products
Technical Information
Personalized Web Pages
FAQ
E-mail / Auto Response
Loyalty Programs
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Data Mining
Decision Support
Business Intelligence
OLAP
Customer-Facing Applications
Customer service and support
Sales force
automation
Marketing
Campaign management
Customer-Touching Applications
Search and comparison capabilities
Technical and other information and
services
Customized products and services
Loyalty programs
Supply Chain Management (SCM)
Generic Supply Chain
Problems Along the Supply Chain
 Longer product development
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cycle
Poor quality product
Poor customer service
High inventory costs
Loss of revenues
Demand Fluctuations Lead to the
Bullwhip Effect
Order
Quantity
Order
Quantity
Order
Quantity
Order
Quantity
Time
Time
Time
Time
Customer
Sales
Retail Orders
To Wholesaler
Wholesaler
Orders to
Manufacturer
Manufacturer
Orders to
Supplier
SCM: The Push Model (Made-to-Stock)
Mass production
Forecast
Salesperson
Happy customer
SCM: The Pull Model (Made-to-Order)
Dell factory
Dell customer order
Dell customer
Solutions to Supply Chain Problems
 Removing excess inventory to expose
hidden problems
 Just-in-time inventory (Toyota Production
System)
 Information sharing
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Vendor-managed inventory (e.g., P&G)
IT Support for SCM: 1. Electronic Data
Interchange (EDI)
IT Support for SCM: 2. Extranets
 The main goal of extranets is to foster
collaboration between business partners.
 An extranet is open to selected B2B
suppliers, customers and other business
partners.
The Structure of an Extranet
Types of Extranets
A company and its dealers, customers or suppliers
An industry’s extranet
Joint ventures and other business partnerships