Scm and crm

supply chain and crm

1. Seminar Report on SCM AND CRM


Sibitha K. S.

School of Management Studies,
CUSAT, Kochi – 22
E-mail: [email protected]


Abstract: Today’s global markets and fierce competition among the
enterprises force them to adapt and implement new strategies and solutions
for the revealed continuous challenges. The purpose of this paper is to
examine the level of implementation of supply chain management and
customer relationship management. Later in this part of this paper, a global
study conducted by Apple Inc. show how the integration of demand-
generating and supply-chain operations through information technologies
help companies to create an outstanding value proposition. Superior
performance in sales, market share, customer service etc. can be achieved
by creating digital loyalty networks. To build this network, companies must
develop not only a customer strategy, but also a partner and supply chain
strategy to support customer loyalty.

Keywords: Supply chain management, Customer relationship management,
ISCRM



1.0 INTRODUCTION

1.1 General Information
Supply chain management, or SCM, and customer relationship management, or
CRM, are similar in that they are both technology-driven business processes that
emerged at the start of the 21st century. Despite these parallels, they are very
different in terms of their uses and effects in your business.
It’s not only the focus on CRM that allows companies to outperform their competition.
Companies so far rarely integrate supply chain management and customer
relationship management. By integrating these business processes companies are
able to break through and achieve a number of improvements in their financial and
performance metrics that would have been unachievable using only stand alone CRM

2. & SCM techniques. JDA Chief Technology Officer Scott Hines coined the term
ISCRM; Integrated Supply Chain and Customer Relationship Management.

2.0 SCM

Supply chain management is a collaborative process where product resellers work
closely with supply chain partners to deliver the best value to end customers or
consumers. Software-based solutions are used that allow resellers and vendors to
sync inventory levels and ordering systems for more efficient distribution and order
fulfilment.[18] Supply chain partners work together on transportation and logistics to
try to optimize the movement of goods from the manufacturing level to wholesale or
retail.
It's required to extend the structure of the new business process network operationally
to automate and stream-line communications, transactions, and collaboration with
supply partners. It's obvious that no business will operate as a single company albeit
it's a node of complicated network of individuals and businesses that exploit internet
as a leverage in storing, processing, exchanging information at the lowest possible
cost.[1]
Businesses employ procurement and supply chain to monitor, manage and extend the
enterprise.
Consequently, SCM should manage all process in the distributor, supplier and trading
partner sides. So, it should include demand management, supply management,
inbound/outbound logistics, indirect procurement direct procurement/supply chain
planning, and event management, Sourcing and Business process networks. A
functional blocks look to SCM processes have shown in figure 1.

Figure 1- A functional block diagram of SCM.

2.1 SCM Benefits

The main premise of supply chain management is that distribution channel members
view themselves as partners trying to deliver value to consumers. This is different
from the traditional vendor-buyer relationships. Rapid response to inventory needs
and special orders, reduced inventory levels and management costs and fewer stock-
outs are among the tangible benefits of SCM. For the companies involved, it allows
them to manage costs and improve profit margins. A side benefit of supply chain
efficiency is more environmentally friendly transportation practices.[2]
2.2 The role of supply chain management software
Technology is critical in managing today's supply chains, and ERP vendors offer
modules that focus on relevant areas. There are also business software vendors that
focus specifically on SCM. A few important areas to note include

3.  Supply chain planning software for activities such as demand management.
 Supply chain execution software for activities such as day-to-day manufacturing
operations.
 Supply chain visibility software for tasks such as spotting and anticipating risks and
proactively managing them.
 Inventory management software for tasks such as tracking and optimizing inventory
levels.
 Logistics management software and transportation management systems for activities
such as managing the transport of goods, especially across global supply chains.
 Warehouse management systems for activities related to warehouse operations.
Infor, JDA Software, Oracle and SAP are well-known vendors of supply chain
software.
The increasingly global nature of today's supply chains and the rise of e-commerce,
with its focus on nearly instant small deliveries straight to consumers, are posing
challenges, particularly in the area of logistics and demand planning. A number of
strategies -- such as lean -- and newer approaches -- such as demand-driven material
requirements planning -- may prove helpful.[15]
Technology -- especially big data, predictive analytics, internet of things
(IoT) technology, supply chain analytics, robotics and autonomous vehicles -- is also
being used to help solve modern challenges, including in the areas of supply chain
risk and disruption and supply chain sustainability.
As just two examples, IoT can help with transparency and traceability to help boost
food quality and safety by using sensors to monitor the temperature of perishable food
while it's in transit. And analytics can help determine where to put smart lockers in
densely populated areas to cut the number of single-item deliveries and lower
greenhouse gas emissions.


3.0 CRM

Customer relationship management is a marketing system where companies use
databases to collect data on customers to build stronger marketing programs. In a
company-wide CRM program, the roles of each functional area are more customer-
centric than they were prior to CRM implementation. Marketing, sales and service
emphasize targeting the right customers with the best value to build long-term
relationships. IT enables these functions by helping select and manage use of the
high-tech infrastructure. Human resources, finance and operations all take on tasks
related to customer objectives.[1]

One of the most important reason that organization used of Enterprise Applications, is
acquire and retain long-term and valued customers, that is, called Customer
Relationship Management. CRM applications could be used to support all of the
customer-centric processes within organization in any size and level including
marketing, sales, and customer support . Today’s, while power of competence
guaranties survivance, every enterprise is mining new ways to develop, maintain, and
leveraged a consistent, accurate, and timely set of customer, product, and service
information across the customer-facing marketing, sales, service, support, and
product development units that is tenet of CRM . A functional blocks look to CRM
processes have shown in figure 2.

4. Figure 2- A functional block diagram of CRM Processes

3.1 CRM Benefits

An overriding objective of CRM is to constantly improve the total customer experience
through ongoing research and better systems. Building and maintaining long-term
relationships with your core customers helps you optimize profitability. Using data
gathered from customers allows you to target specific customers with focused
marketing to attract interest and reduce wasted messages that would otherwise go to
disinterested customers.[8]

3.2 Components of CRM

At the most basic level, CRM software consolidates customer information and
documents into a single CRM database so business users can more easily access
and manage it.
Over time, many additional functions have been added to CRM systems to make them
more useful. Some of these functions include recording various customer interactions
over email, phone, social media or other channels; depending on system
capabilities, automating various workflow automation processes, such as tasks,
calendars and alerts; and giving managers the ability to track performance and
productivity based on information logged within the system.[16]
 Marketing automation. CRM tools with marketing automation capabilities can
automate repetitive tasks to enhance marketing efforts at different points in the
lifecycle. For example, as sales prospects come into the system, it might automatically
send the prospects marketing materials, typically via email or social media, with the
goal of turning a sales lead into a full-fledged customer.
 Sales force automation. Sales force automation tools track customer interactions
and automate certain business functions of the sales cycle that are necessary to
follow leads and attract and obtain new customers.
 Contact center automation. Designed to reduce tedious aspects of a contact center
agent's job, contact center automation might include prerecorded audio that assists in
customer problem-solving and information dissemination. Various software tools that
integrate with the agent's desktop tools can handle customer requests in order to cut
down on the time of calls and to simplify customer service processes.
 Geolocation technology, or location-based services. Some CRM systems include
technology that can create geographic marketing campaigns based on customers'
physical locations, sometimes integrating with popular location-based GPS

5. apps. Geolocation technology can also be used as a networking or contact
management tool in order to find sales prospects based on a location.[17]
 Workflow automation. CRM systems help businesses optimize processes by
streamlining mundane workloads, enabling employees to focus on creative and more
high-level tasks.
 Lead management. Sales leads can be tracked through CRM, enabling sales teams
to input, track and analyze data for leads in one place.
 Human resource management. CRM systems help track employee information,
such as contact information, performance reviews and benefits within a company.
This enables the human resource department to more effectively manage the internal
workforce.
 Analytics. Analytics in CRM help create better customer satisfaction rates by
analyzing user data and helping create targeted marketing campaigns.
 AI in CRM. Artificial intelligence technologies, such as Salesforce Einstein, have been
built into CRM platforms to automate repetitive tasks, identify customer buying
patterns to predict future customer behaviors and more.[13]

3.3 Types of CRM technology

The four main vendors of CRM systems are Salesforce, Microsoft, SAP and Oracle.
Other providers are popular among small- to midmarket businesses, but these four
tend to be the choice for large corporations. The types of CRM technology offered are
as follows:
 On-premises CRM. This system puts the onus of administration, control, security and
maintenance of the database and information on the company using the CRM
software. With this approach, the company purchases licenses upfront instead of
buying yearly subscriptions from a cloud CRM provider. The software resides on the
company's own servers and the user assumes the cost of any upgrades. It also
usually requires a prolonged installation process to fully integrate a company's data.
Companies with complex CRM needs might benefit from an on-premises deployment.
 Cloud-based CRM. With cloud-based CRM -- also known as SaaS (software as a
service) or on-demand CRM -- data is stored on an external, remote network that
employees can access anytime, anywhere there is an internet connection, sometimes
with a third-party service provider overseeing installation and maintenance. The
cloud's quick, relatively easy deployment capabilities appeal to companies with limited
technological expertise or resources.[7]
Companies might consider cloud CRM as a more cost-effective option. Vendors such
as Salesforce charge by the user on a subscription basis and offer the option of
monthly or yearly payments.
Data security is a primary concern for companies using cloud-based systems, as the
company doesn't physically control the storage and maintenance of its data. If the
cloud provider goes out of business or is acquired by another company, an
enterprise's data can be compromised or lost. Compatibility issues can also arise
when data is initially migrated from a company's internal system to the cloud.Finally,

6. cost may be a concern, since paying subscription fees for software can be more costly
over time than on-premises models.
 Open source CRM. An Open source CRM system make source code available to the
public, enabling companies to make alterations at no cost to the company employing
the system. Open source CRM systems also enable the addition and customization of
data links on social media channels, assisting companies looking to improve social
CRM practices.[9]
Open Source CRM platforms such as OroCRM, SuiteCRM and SugarCRM offer
alternatives to the proprietary platforms from Salesforce, Microsoft and other vendors.
Adoption of any of these CRM deployment methods depends on a company's
business needs, resources and goals, as each has different costs associated with it.

3.4 CRM examples in practice

 Contact center. Traditionally, data intake practices for CRM systems have been the
responsibility of sales and marketing departments, as well as contact center agents.
Sales and marketing teams procure leads and update the system with information
throughout the customer lifecycle, and contact centers gather data and revise
customer history records through service calls and technical support interactions.[10]
 Social CRM. Social media in CRM involves businesses engaging customers directly
through social media platforms, such as Facebook, Twitterand LinkedIn. Social media
presents an open forum for customers to share experiences with a brand, whether
they're airing grievances or promoting products.
To add value to customer interactions on social media, businesses use various social
CRM tools that monitor social media conversations -- from specific mentions of a
brand to the frequency of keywords used -- to determine their target audience and
which platforms they use. Other tools are designed to analyze social media feedback
and address customer queries and issues.
Companies are interested in capturing customer sentiments, such as the likelihood
they will recommend products and their overall customer satisfaction, to develop
marketing and service strategies. Companies try to integrate social CRM data with
other customer data obtained from sales or marketing departments to get a single
view of the customer.
Another way in which social CRM adds value for companies and customers is through
customer communities, where customers post reviews of products and can engage
with other customers to troubleshoot issues or research products in real time.
Customer communities can provide low-level customer service for certain kinds of
problems and reduce the number of contact center calls. Customer communities can
also provide new product ideas or feedback that companies can use in lieu of
feedback groups.
 Mobile CRM. CRM applications built for smartphones and tablets have become a
must-have for sales representatives and marketing professionals who want to access
customer information and perform tasks when they are not physically in their
offices. Mobile CRMapps take advantage of features that are unique to mobile
devices, such as GPS and voice-recognition capabilities, to give sales and marketing
employees access to customer information from anywhere.
 Business-to-business (B2B) practices. A CRM system in a B2B environment helps
monitor sales as they move through the sales funnel, enabling a business to address
any issues that might come up during the process. CRM systems in the B2B market
help create more visibility into leads and, therefore, increase efficiency throughout the
sales process.

7. 3.5 CRM challenges

For all of the advancements in CRM technology, without the proper management, a
CRM system can become little more than a glorified database in which customer
information is stored. Data sets need to be connected, distributed and organized so
that users can easily access the information they need.
Companies may struggle to achieve a single view of the customer if their data sets
aren't connected and organized in a single dashboard or interface. Challenges also
arise when systems contain duplicate customer data or outdated information. These
problems can lead to a decline in customer experience due to long wait times during
phone calls, improper handling of technical support cases and other issues.[12]
CRM systems work best when companies spend time cleaning up their existing
customer data to eliminate duplicate and incomplete records before they supplement
CRM data with external sources of information.

4.0 HOW CRM MAKES SUPPLY CHAINS MORE EFFICIENT THROUGH
SEGMENTATION

Although for many enterprises it takes time for it to sink in, the result is inevitable.
Marketing led the way with the concept of tailoring products and services to the
requirements of specific groups of customers. It named its approach ‘segmentation’
and asked customers what they wanted, so that the company could produce different
offerings that matched varying needs and wants.[4]
Now that supply chain is fast becoming the one key competitive advantage that sets
one business apart from its rivals, what could be more natural than to extend the
concept to the supply chain as a whole – and to use marketing and customer
relationship management (CRM) to pilot the process? Benefits can be multiple,
including a boost to the bottom line as IT vendor Dell showed in reducing operational
costs by US $1.5 billion by using CRM and SCM in a new multichannel market
strategy.

4.1 One Size Does Not Fit All

Very rarely does a company ever have just one fixed offering. With choice and
therefore power in the hands of end-customers, most enterprises try to adapt by
supplying a range of products or services; under attack from competitors in one
segment, they also attack back in others. The expectations of customers will vary –
not just in terms of what they receive, but how, where and when. A brute force, one-
size-fits-all approach in supply chain ends up over-serving some customers and
under-serving others. This situation cannot simply ‘balance out’: the company will
necessarily sacrifice profit in some areas and damage customer satisfaction (or even
lose customers) in others.
Think of a firm making different lines of shoes, perhaps a basic ‘everyday’ range and a
fashion range. ‘Everyday’ customers are more likely to want lower prices with
reasonable availability, whereas fashion customers will often pay a higher price, if
they can have their products right now. These are two different supply chain
requirements; leading logically to segmentation into two different supply chain
approaches.[6]

8. 4.2 The Role of Customer Relationship Management

Customer relationship management is about building and maintaining profitable long-
term customer relationships; typically by supplying customers with what they want. To
know what your customers want, ask them; or ask the customer relationship
management system that the marketing and sales departments rely on to track what
customers want, prefer, dislike and are likely to do in the near future.
Not only does an existing CRM system contain a ready-made database of customer
information, but it is also a purpose-built tool for getting more. From web surveys that
ask supply chain related questions, or unstructured notes made by customer service
representatives, a CRM system can collect valuable data to show which groups of
customers want which kind of service. However you do it, supply chain has to
connect with the marketplace. Leveraging the knowhow and tools of your marketing
colleagues is a smart way forward.[3]

4.3 The Seven ‘R’s of CRM’s Contribution to Supply Chain

Good customer relationships are the result of ‘the right product, for the right customer,
in the right place, at the right time, in the right quantity, in the right condition, and at
the right cost’. CRM is a way to identify each of these ‘rights’ and to segment
customers accordingly. Yet besides relationship marketing and cross-selling
techniques favoured by sales and marketing, CRM can also be used to predict future
customer behaviour. Forecasts can be made of the likelihood of customers’
purchases, and even of the risk that they may move over to a rival company and stop
buying from yours[19].
US supermarket Walmart and Target both use CRM to run sales promotions aimed at
specific customer groups, using these business analytics. Other advantages of well-
tuned business analytics include being able to display key status information at any
time (‘dashboards’ showing quantities of customer orders and levels of satisfaction,
for instance); they can also give recommendations for immediate action according to
the trends or events predicted for the future.

5.0 PUTTING SCM AND CRM TOGETHER

On a conceptual level, information flows out of CRM and into SCM. On a practical
level, there may be challenges to this apparent simplicity. Even if a company already
has software systems for both, there is no reason to expect the two environments to
be exactly in phase in terms of their activities, their data and their inputs and outputs.
CRM systems already consist of sales automation, marketing information systems
and call centre technology. SCM is built up of procurement, transportation, inventory,
production, packaging and distribution. Throw an enterprise resource planning system
into the mix, and the complexity grows further.[11]
Whether an integrated system to give end to end supply chain visibility starts from
SCM strengths in logistics, ERP solidity in financials or CRM precision concerning
customers will depend on what needs to be created, modified or replaced. However, it
can be done; in fact American Airlines has been doing it for years, taking customer
information from its reservation systems and website to feed into planning for fuel,
food, spare parts and more. And Cemex (second largest US producer of cement and
concrete mix) uses CRM and SCM to guarantee future deliveries to the hour, without
over-producing; a key capability for a company whose finished product sets rock hard
so soon after preparation.

9. 6.0 APPLE CRM CASE STUDY
6.1 Apple Overview
Apple is one of the most well-known retailers of innovative technology, from personal
computers to handheld devices such as tablets and mobiles. It is the third largest
maker of PCs in the US, and since 2001 has had a much higher focus upon retail and
customers than its competitors.
The customer relationship is now an essential part of Apple's growth strategy, and is
almost as much of a brand feature as the iPad or iPhone.
6.2 Apple's CRM Needs
The company has been using CRM in its customer service departments for nearly a
decade, and this has ranged from sending a series of emails to customers who've
used their in-store services, to focus upon assessing the feelings of the customers
when they are talking to Apple staff. Within their retail departments, Apple will
generally focus upon ensuring that customers have an experience, rather than simply
make a purchase.[5]
The purpose of using CRM in their retail base is to encourage a long-term relationship
between Apple and its clients. Part of retaining that relationship involves enhancing
the customer experience so that it is a unique memory of buying a phone. Rather than
concentrating upon making customers buy a phone, they instead focus upon teaching
customers to love and appreciate the benefits of having an iPhone or iPad. This is a
central point of the Apple strategy.
There are several different strands of using CRM within the Apple infrastructure. The
primary purpose of CRM is data collection. This occurs whenever a customer makes a
purchase, whether it is an iPhone, use of software such as iTunes, or registering their
product using their Apple ID. All of this information is used to help define advertising
so that it is more directly targeted at potential customers.
However, Apple have not only used CRM for their own purposes, they have also
developed a CRM tool for their customers. The tool is entirely cloud-based and means
that there is a pyramid effect of businesses benefiting from CRM data collection which
Apple can also use.[14]
6.3 How Apple Use CRM
By far the most important focus of CRM is improving the customer service experience
for new and existing customers. The Apple Genius process is part of the Tech
support, which focuses upon allowing customers to meet face-to-face with technicians
and discuss problems and solutions in depth.[20]
CRM helps to manage the effect of this face-to-face contact, and also helps to
enhance brand awareness when focusing upon CRM-based advertising and targeted
emails in the future. By using CRM so extensively in their retail structure, Apple has
effectively produced a lifestyle experience rather than simply a purchase.

10. Apple is a multinational company which has had success in a number of different
fields and needs a CRM system which can help them to reach customers on a face-
to-face level. Small businesses can also benefit from this type of interpersonal CRM.

7.0 REFERENCES

1. Nasrollah Moghaddam Charkari, Neda Abdolvan,2015
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M_CRM_ERP
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relationship-management-7884.html
3. Alok Kumar Rai, 2011, “CRM Concept & Cases”, Prentice Hall of India Private Limited. pp 83-
87
4. Michael J. A. Berry, Gordon S. Linoff, “Mastering Data Mining: The Art And Science Of CRM”
5. Ramaswamy , Patrica 13, “Harvard Business Review On CRM”
6. Anonymous, 2013, https://www.logisticsbureau.com/crm-and-the-supply-chain
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14. Injazz J. Chen, 2003,
https://www.emeraldinsight.com/doi/full/10.1108/14637150310496758
15. Margaret Rouse, 2018, https://searcherp.techtarget.com/definition/supply-chain-management-
SCM
16. Prachi Juneja, 2018, “Customer Relationship Management - What is CRM?”
17. Paul Greenberg, “CRM At The Speed Of Light: Capturing And Keeping Customers In Internet
Real Time”
18. Anonymous, 2015, "Types of CRM and Examples, CRM Software", www.crmsoftware.com.
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Bain & Company”
20. Anonymous, https://www.expertmarket.co.uk/crm-systems/apple-crm-case-study