Supply Chain and Customer Relationship Management - Essay Example

Supply Chain and Relationship Management Affiliation Supply Chain and Relationship Management The supply chain management has become a very important role in the management of modern organizations. Organizations have embraced supply chain management systems to add value to their processes and achieve a competitive advantage over competitors in the market. There different motivations for an organization to have a good supply chain management system. One of these motivations is availability of a continuous flow of information among the stakeholders of an organization. The second one is embracement and application of information technology such as the use of Enterprise resource planning and electronic data interchange systems. The third motivation is the need for integration of all processes of a business in order to create value to stakeholders and customers. Another motivation is the need to save costs incurred in products or services provision processes. Also, it is extremely significant to offer goods and services of high quality to esteemed customers. Therefore, the motivation for quality assurance drives an organization to adopt a good supply chain management system. Besides, every company aims at satisfying the desires of its customers. It is this motivation for customer satisfaction that encourages an organization to take initiatives for managing the various components of supply chain and logistics (Lambert, D. M., & Supply Chain Management Institute.2008). Supply chain management can be said to be the process of managing storage and movement of raw materials, assemblies, work-in-progress inventory and the finished products from a set of the point of origin to the last point of consumption. The supply chain management entails the suppliers sourcing, procurement, inventory management, product production management, warehousing, distribution and customer relationship management. It is also composed of the whole logistics systems. That is inbound logistics, outbound logistics, transportation, distribution, warehousing of goods to the final consumers. Supply chain management can be depicted as the process of planning, designing, executing, controlling and monitoring the activities of supply chain with the aim of creating value, leveraging worldwide logistics, establishing a competitive infrastructure, measuring global performance and synchronizing demand with supply. The supply chain management uses the supply chain management software to integrate and monitor its various activities. There two major types of supply chain management software are execution applications and planning applications. Planning applications such as Enterprises resources planning, material requirement planning and material resource planning use advanced algorithms in order to determine the best method to fill an order. On the other hand, execution applications such as electronic data interchange are used to track the status of goods, inventory management and financial information of goods and services. There are some supply chain management applications that work based on open data models to support data sharing within and outside the company. The shared data may exist in data warehouses or diverse database systems at several different companies and sites. In regard to the sharing of data in both downstream and upstream, supply chain management applications may lead to cost reduction and improve the time-to-market. Also, these applications allow all members in supply chain to manage the current resources better and plan for needs in the future. In addition, many organizations are switch to web-based applications and web sites as part of the solution for supply chain management. The web sites offer electronic procurement market where stakeholders trade and enter into auction bids with one another (Mahdavi, I., Mohebbi, S., & Cho, N.2011). The main four drivers of supply chain management are facilities, information, transportation and inventory. Each of these drivers has different but significant impact on responsiveness and efficiency of the supply chain management system. The organization must have adequate facilities that will facilitate effective supply chain management. The storage and transportation facilities such as warehouses, store and equipment for moving products from one point to another should be available. Also, there must be a smooth and effective flow of information between various parties in order for supply chain management to be easy. Supply chain management cannot take place without inventory. The movement, storage and management of raw materials, finished goods and work-in-progress inventory is the main role of supply chain management. Further, the transportation of inventory mark a major role of supply chain management. Transportation allows goods to move from their points of origin to the various points of consumption. The supply chain and logistics management cannot be possible without transportation (Ivanov, D., & Sokolov, B. V. 2010). Electronic supply chain management (e-SCM) refers to the use information technology and online networks to carry out activities of supply chain as well as manage the supply chains. E-supply chain management facilitates business to business processes and improve agility, speed, customer satisfaction and real-time control. E-supply chain management comprises of supply chain replenishment, E-procurement, E-logistics, the use of bar-coding and wireless devices to manage inventory, the use of RIFD to monitor and control supply chain, collaborative planning and collaborative design and development. E-procurement refers to the use internet and website technology to carry out requisitioning, contracting, ordering, sourcing and payment for goods and services. E-procurement support the purchase of materials over the internet. It deals with online contracts, catalogs, shipping notices and purchase orders. E-procurement can manage supplier relationships and enable effective tracking of purchase orders. E-procurement allows rapidly and effectively to respond the requirements of the customer. E-logistics is the use of technologies of the web to support the processes warehousing, material acquisition and transportation. Supply chain integration refers to the process of having a collaborative work between suppliers and buyers, common systems, joint product development and shared information in the supply chain. The supply chain integration helps an organization to reduce cost and increase value added. The elements of integration in supply chain management comprise of shared information, collaborative work, common systems and joint product development. Customer relationship management is that system used by companies to enter, store, track, analyze and manage the information of customers. CRM is mostly used in business to business model. CRM stores, measures, and manages the interaction of customers in daily business traction. The system helps the company to generate a sale and maintain transaction relationships with customers. The early CRM took a marketing database form. The system collected data of customers and analyzed them manually by statistical modelling. The data was used to formulate customized marketing programs. The customer information gathered in the survey form. The performance of the early CRM was analogue. The todays CRM is digitized. The system performs more function than the one in early generation. It tracks order and performs sales predictions as well as demographic research. The CRM is cloud-based as well as web-based. The main components of CRM are process enhancement, marketing abilities and decision-making capabilities. The process enhancement in a CRM improve corporate processes. CRM is used in marketing and researching in the market. CRM also helps in making rational and sound decisions. There two types of CRM; operational CRM and analytical CRM. Operational CRM is designed to automate the facts of customers. It automate selling, marketing and service functions. Analytical CRM is designed to exploit the data of customers in order to enhance company and customer value. It analyzes the sales, credit, marketing and financial data of the customer. CRM involves three processes; front office operations, back office operations and business relationships in the front office operations. The agents of the company interact directly with customers by using means such as phone calls, face to face meeting, online services and email. On the other hand, back office operations involve operations that affect the activities of front office operations. These operations are billing, planning, advertising, manufacturing, marketing and maintenance. The third process is the business relationships that involve the interaction with organizations and stakeholders. Business relationships are an external network that supports back and front office activities. Hosted CRM is an arrangement in which an organization outsources all or a section of its customer relationship management roles to a specific application service provider (Payne, A., & Frow, P.2013). r. The hosted CRM enables companies to concentrate on resources in the business operations. Therefore, the company can surplus the investment returns through reduction of costs. The in-house CRM is very expensive. With new and advancing technology, the functions of the CRM increase to improve the business to customer relationships. Bank of America adopted the online banking CRM in September 2000 and intensified its market share of M&A business and underwriting by at least 40 percent. As one of the biggest financial services institution, bank of America commits into making the banking work for its clients more convenient. Bank of America has used innovative technologies to provide individuals, commercial and institutional clients as well as small businesses across the world with the best methods of managing their financial lives. Bank of America has enabled its customers to carry out online banking and investing whenever they feel like. Through the use of the biggest financial services network, bank of America has managed to come up with about 4200 offices and 13000 ATMs in its country. Further, has 30 offices internationally situated to serve clients in at least 150 countries. It has an internet website to provide the access of online banking to 5.2 million clients. The use of online banking CRM has become a significant factor to other financial institutions because it is customer oriented. The system has many advantages and benefits to businesses and customers. However, the use of online banking CRM can suffer a substantial loss of trust and loyalty of customers in case of a global economic crisis. Reference Lambert, D. M., & Supply Chain Management Institute. (2008). Supply chain management: Processes, partnerships, performance. Sarasota, Fla: Supply Chain Management Institute. Mahdavi, I., Mohebbi, S., & Cho, N. (2011). Electronic supply network coordination in intelligent and dynamic environments: Modelling and implementation. Hershey, PA: Business Science Reference Ivanov, D., & Sokolov, B. V. (2010). Adaptive supply chain is management. London: Springer. Payne, A., & Frow, P. (2013). Strategic customer management: Integrating relationship marketing and CRM. Read More