Beyond ERP

Dept. of Information Systems SVKM's NMIMS University

SCM Introduction
Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible.

SCM spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of consumption. SCM is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. SCM involves coordinating and integrating these flows both within and among companies.

The Supply Chain

Suppliers Manufacturers Warehouses & Distribution Centers Customers

Transportation Costs Material Costs

Transportation Costs

Manufacturing Costs

Transportation Costs Inventory Costs

SCM Introduction
The ultimate goal of any effective supply chain

management system is to reduce inventory (with the assumption that products are available when needed). A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.

SCM

Helps the company to get the right products to the right place at the right time in the proper quantity and at an acceptable cost Cross functional interenterprise system that uses IT to help support and manage the links between some of a companys key business processes and those of its suppliers, customers and business partners. The goal of SCM is to first create a fast, efficient and lowcost network of business relationships OR supply chain to get a companys products from concept to market.

SCM
Commit Schedule Make Deliver

y chain ycle

Strategic sourcing and procurement

ctional es Production logistics Shared market data

Forecast and demand planning Customer order fulfillment/services Transportation and shipment management Collaborative Fulllfilment

Distribution network and warehouse operations

grated

Supplier

Manufacturer

Retailer

Customer

The Supply Chain Another View

Plan

Source

Make

Deliver

Buy

Suppliers

Manufacturers

Warehouses & Distribution Centers

Customers

Material Costs

Transportation Transportation Costs Transportation Costs Manufacturing Costs Inventory Costs Costs

The Role of SCM

SCM Objectives What Establish objectives, policies and ops footprint How much Deploy resources to match supply to demand SCM Outcomes Objectives Supply policies Network Design Demand Forecast Production,procurement, logistics plan Inventory targets Work center scheduling Order/inventory tracking Order Cycle Material movement

Strategic Tactical Operational Execution

When? Where? Schedule, monitor, control and adjust production

Do Build and transport

Benefits and challenges of SCM

Business benefits:

Faster, more accurate order processing Reduction in inventory levels Quicker time to market Lower transaction and material costs Strategic relationships with the suppliers

Challenges of SCM

Planning, selection, and implementation of SCM solutions is becoming more complex as the pace of technological change accelerates and number of companys partners increase Lack of demand planning knowledge, tools and guidelines Inaccurate production, inventory and other data provided by the companys IS Lack of adequate collaboration among marketing, production and inventory management depts and with suppliers, distributors SCM software tools are immature, incomplete, hard to implement

Trends in SCM
Information sharing Product /sales data Sourcing help Logistics Order fulfillment Order management Inventory management Resource allocation Systems use and integration Collaborative marketing Sales and service SCM optimization Collaborative design and delivery

SCM Stage 1 Current supply chain improvement Supply chain, e-commerce loosely coupled

SCM Stage 2
Intranet/extranet links to trading partners Supplier network expansion

SCM Stage 3 Collaborative plannin And fulfillment

Extranet and exchange Based collaboration

CRM

Provide Organizations and all of its customer facing employees with a single, complete view at every touch point and across all the channels and Provide customer with a single complete view of the company and its extended channels

Uses IT to create cross functional enterprise system that integrates and automates many of the customer-serving processes in sales, marketing and customer services. Includes family of software modules that provide the tools that enable a business and its employees to provide fast, convenient, dependable and consistent service to the customers

CRM
CRM is an information industry term for methodologies, software, and

usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth. CRM consists of: 1. Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team. 2. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices).

CRM
3. Allowing the formation of individualized relationships with customers,

with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.
4. Providing employees with the information and processes necessary to

know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners.
CRM refers to the methodologies and tools that help businesses manage

customer relationships in an organized way.

CRM tools include software and browser-based applications that collect and

organize information about customers

CRM
Marketing and fulfillment
Sales
Cross sell Up-Sell

Prospect OR customer

Contact and Account mgmt

Retention and loyalty

Customer support

Phases of CRM
Customer Life cycle

Acquire

Enhance

Retain

CRM Direct Marketing functional Solutions

Cross-Sell and Up-Sell

Proactive Service

Sales force automation

Customer support

Shared customer data CRM integrated Solutions Partner

Collaborative Service

Company

Customer

CRM

Acquire: Contact management, sales prospecting, selling, direct marketing and fulfillment

Enhance:
Web enabled CRM account management and customer service and support tools keep customers happy CRM SFA and direct marketing and fulfillment tools help companies cross-sell to their customers. Customer value: One-stop shopping at attractive prices.

Retain: Proactively identify and reward its most loyal and profitable customers to retain and expand its business. Customer value: Personalized business relationship

Benefits of CRM

Identify and target their best customers- most profitable Retention of the customers for lifelong Customizable and personalization of products and services Customer satisfaction and delight. Provide a consistent customer experience and superior service and support Provide strategic business value to the company

CRM Failures

Business benefits not guaranteed, proven elusive Survey

50% CRM projects did not produce the results promised 20% damaged long standing customer relationships Bottom of the users satisfaction in survey of senior management.

Why Lack of understanding and preparation No participation of business stakeholders Lack of business process changes and change management

Types of CRM Operationa l CRM

Business value Support customer interaction thro variety of channels like fax,phone,email, chat and mobile devices Synchronize customer interaction consistently across the channels. Makes your company easier to do business with Extracts in-depth customer history, preferences and profitability information from your data warehouse and other databases. Allows you to analyze, predict and derive customer value and behavior and forecast demand Lets you approach your customers with the relevant information Enables easy collaboration with customers, suppliers and partners Improves efficiency and integration throughout the supply chain Allows greater responsiveness to customer needs through sourcing of products and services outside of your enterprise Provides all users with tools and information that fit their individual preferences and roles Empowers all employees to respond to customer demands more quickly and become truly customer focused Provides the capability to instantly access,link and use all internal and external customer information

Analytical CRM

Collaborati ve CRM

Portalbased CRM

Case studies
1. Wal-Mart & Mattel: Supply Chain Best Practices

2. Mitsubishi Motor Sales: Implementing CRM