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CHAPTER 9 & 10

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).

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CHAPTER 9 & 10

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  1. CHAPTER 9 & 10 Customer Relationship Management Supply Chain Management

  2. OUTLINE • Customer Relationship Management (CRM) • Definition • Operational CRM • Analytical CRM • Supply Chain Management (SCM) • Supply Chains • IT Support for Supply Chain Management

  3. Interorganizational Systems (IOS) Figure 2.2

  4. From Neighborhood Stores……. Personal

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

  6. Customer Touch Points Web Computer Physical Store Smart Phone Customer Service Sales Representative CUSTOMER Service Center Field Service Technician Direct Mail Email

  7. 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 8-10 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

  8. Principles of CRM • A customer-centered organizational strategy • “Treat different customers differently” • Keep profitable customers and maximize lifetime revenue from them

  9. Components of a CRM System Customer-facing Applications Customer Data Warehouse • Sales • Marketing • Customer Service and Support • Campaign Management Customer-touching Applications • Search and Comparison • Customized Products • Technical Information • Personalized Web Pages • FAQ • E-mail / Auto Response • Loyalty Programs • Data Mining • Decision Support • Business Intelligence • OLAP

  10. Customer-Facing Applications Customer service and support Sales force automation Marketing Campaign management

  11. Customer-Touching Applications Search and comparison capabilities Technical and other information and services Customized products and services Loyalty programs

  12. Supply Chain Management (SCM) Generic Supply Chain

  13. Problems Along the Supply Chain • Longer product development cycle • Poor quality product • Poor customer service • High inventory costs • Loss of revenues

  14. 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

  15. SCM: The Push Model (Made-to-Stock) Mass production Forecast Salesperson Happy customer

  16. SCM: The Pull Model (Made-to-Order) Dell factory Dell customer order Dell customer

  17. Solutions to Supply Chain Problems • Removing excess inventory to expose hidden problems • Just-in-time inventory (Toyota Production System) • Information sharing • Vendor-managed inventory (e.g., P&G)

  18. IT Support for SCM: 1. Electronic Data Interchange (EDI)

  19. 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.

  20. The Structure of an Extranet

  21. Types of Extranets A company and its dealers, customers or suppliers An industry’s extranet Joint ventures and other business partnerships

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