1. Customer Relationship Management and Supply Chain Management
CHAPTER 11
Customer Relationship Management and Supply Chain Management

2. Announcements Today Coming Weeks Chapter 11 – CRM and SCM
Project 6 – Solver Case due by midnight
Review Project 7 – Decision Support
Review of all functions and formulas used
Coming Weeks
Quiz 3 – Excel Solver
Chapter 12 & Tech Guide 4
Final Exam Review

3. CHAPTER OUTLINE 11.1 Defining Customer Relationship Management
11.2 Operational CRM Systems
11.3 Analytical CRM Systems
11.4 Other Types of CRM Systems
11.5 Supply Chains
11.6 Supply Chain Management
11.7 IT Support for Supply Chain Management

4. Chapter Opening Case: The Next Step in Customer Relationship Management
Source: Maxx-Studio/Shutterstock
Taste Profiling
Persuasion Profiling

5. 11.1 Customer Relationship Management
Customer-Focused
&
Customer-Driven
Designed to Achieve:
Customer Intimacy

6. From Neighborhood Stores…….
© MONKEY BUSINESS-LBR/Age Fotostock America, Inc.
Personal

7. ….To Today
Mobile population
The Web
Giant malls
Impersonal

8. Why do we need CRM? Cost Dissatisfied customer impacts
Increasing the customer retention rate
Odds of selling to new customers
Retention of complaining customers

9. Why do we need CRM? Value of a customer
Duration of the relationship
Number of relationships (e.g. more than one product)
Profitability of the relationship
GOAL of CRM:
Maximize lifetime
value of a customer

10. Tenets of CRM One-to-one relationship between a customer and a seller.
Treat different customers differently.
Keep profitable customers and maximize lifetime revenue from them.

11. Customer Touch Points

12. Data Consolidation = 360-Degree View of Customers
Accounting HR
Finance
Customer
Marketing
MIS
Data Consolidation = 360-Degree View of Customers
Collaborative
CRM

13. Primary Components of a CRM Strategy
OPERATIONAL
Sales
Marketing
Customer Service and Support
Campaign Management
Customer-facing Applications
ANALYTICAL
Customer
Data
Warehouse
Search and Comparison
Customized Products
Technical Information
Personalized Web Pages
FAQ
/ Auto Response
Loyalty Programs
Customer-touching Applications
Data Mining
Decision Support
Business Intelligence
OLAP

14. 11.2 Operational CRM Supports the front-office business processes
(i.e. those that directly interact w/customers)
Two major components:
Customer-facing applications
Customer-touching applications
Marketing
List Generator
Campaign Mgmt
Cross Selling /
Up Selling
Sales
Sales Mgmt
Contact Mgmt
Opportunity Mgmt
Customer Service
Contact Center
Web-Based
Self Service
Call Scripting

15. Operational CRM: Customer-Facing Applications
Customer service and support
Sales force automation
Marketing
Cross Selling
Up Selling
Bundling
Campaign management
© Mustafa Almir Mahmoud/Age Fotostock America, Inc.

16. Operational CRM: Customer-Touching Applications
Search and comparison capabilities
Technical and other information and services
Customized products and services
Source: © Spencer Grant/PhotoEdit
Loyalty programs

17. 11.3 Analytical CRM Systems
Analyze customer behavior and perceptions in order to provide actionable business intelligence.
ANALYTICAL
Customer
Data
Warehouse
Data Mining
Decision Support
Business Intelligence
OLAP

18. 11.4 Other Types of Customer Relationship Management Systems
On-demand CRM
Hosted by an external vendor in the vendor’s data center
Mobile CRM
Interacting directly with customers through mobile
devices
Open-source CRM
Source code openly available to developers and users

19. Challenges and Future of Customer Relationship Management Systems
Social Media
Future
Supplier Relationship Management
Partner Relationship Management
Employee Relationships Management

20. Supply Chains
The flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end consumers.
Components of Supply chain:

21. The Flows of the Supply Chain
Material flows
Information flows
Financial flows
Material
Information
Financial

22. 11.6 Supply Chain Management
The function of planning, organizing, and optimizing the various activities performed along the supply chain
These systems are considered to be a type of Interorganizational information system (IOS).
Goal of an SCM System:
Reduce problems along supply chain

23. Push & Pull Models

24. Problems Along the Supply Chain
Poor customer service
Poor quality product
High inventory costs
Loss of revenues
The Bullwhip Effect

25. Solutions to Supply Chain Problems
Using inventories:
Just-in-time inventory
Information sharing:
Vendor-managed inventory

26. 11.7 Information Technology Support for Supply Chain Management
Electronic data interchange (EDI)
Enables business partners to exchange routing documents electronically
Example
EDI is accomplished through the use of 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.

27. The Structure of an Extranet
See Figure 10.4.

28. Comparing Purchase Order Fulfillment Without EDI
See Figure 10.3.
Source: Drawn by E. Turban

29. Comparing Purchase Order Fulfillment With EDI
Source: Drawn by E. Turban

30. EDI Benefits Minimize data entry errors Length of messages are shorter
Messages are secured
Reduces cycle time
Increases productivity
Enhances customer service
Minimizes paper usage and storage

31. EDI Limitations Significant initial investment to implement
Ongoing operating costs are high due to the use of expensive, private VANs
Traditional EDI system is inflexible
Long startup period
Multiple EDI standards exist