IBM 301 Lecture Notes - Lecture 13: Supplier Relationship Management, Customer Relationship Management, Supply Chain
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Published on 20 Mar 2019
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Chapter 13: Supply Chain Management and Marketing Channels
Supply Chains and Supply Chain Management
● Supply chain: the connected chain of all the business entities, both internal and external
to the company, that perform or support the logistics function
● Supply chain management: a management system that coordinates and integrates all of
the activities performed by supply chain members into a seamless process, from the
source to the point of consumption, resulting in enhanced customer and economic value
● Supply chain agility: an operational strategy focused on creating inventory velocity
simultaneously in the supply chain
Benefits of Effective Supply Chain Management
● Supply chain management is a key means of differentiation for a firm
● Companies that focus on supply chain management report:
○ Lower inventory, transportation, warehousing, and packaging costs
○ Greater logistical flexibility
○ Improved customer service
○ Higher revenues
Supply Chain Integration
● Supply chain orientation: system of management practices that are consistent with a
“systems thinking” approach
● Leading supply chain-oriented firms share five characteristics:
○ They are credible
○ They are benevolent
○ They are cooperative
○ They have the support of top managers
○ They are effective at conducting and directing supply chain activity
● Supply chain integration: when multiple firms or business functions in a supply chain
coordinate their activities and processes to that they are seamlessly linked to one another
in an effort to satisfy the customer
○ Integration can be internal or external
● Demand-supply integration (DSI): a supply chain operational philosophy focused on
integrating the supply-management and demand-generating functions of an organization
○ Internal supply chain integration
○ Enhances customer satisfaction
● Types of external integration
○ Relationship integration
○ Measurement integration
○ Technology and planning integration
○ Material and service supplier integration
○ Customer integration
● Organizational success in achieving both the internal and external types of integration is
very important
● Integration involves a balance between barriers and enablers
The Key Business Processes of Supply Chain Management
● Business processes: bundles of interconnected activities that stretch across firms in the
supply chain
● 8 critical business processes on which supply chain managers most focus:
○ Customer relationship management (CRM)
○ Customer service management
○ Demand management
○ Order fulfillment
○ Manufacturing flow management
○ Supplier relationship management
○ Product development and commercialization
○ Returns management
Customer Relationship Management
● Customer relationship management (CRM): allows companies to prioritize their
marketing focus on different customer groups based on each group’s long-term value to
the company or supply chain
○ The CRM process includes customer segmentation by value and subsequent
generation of customer loyalty for the most attractive segments
Customer Service Management
● Customer service management process: presents a multi - company, unified response
system to customers when complaints, concerns, questions, or comments are voices
○ Has strong positive impact on revenues when executed properly
○ Enhanced by the use of customer care software
Demand Management
● Demand management process: seeks to align supply and demand throughout the supply
chain by foreseeing customer requirements at each level and creating customer-focused
plans of action prior to actual customer purchasing behavior
○ Allows customer satisfaction through greater flexibility in manufacturing,
marketing, and sales programs
● Sales and operations planning (S&OP): a method companies use to align production with
demand by merging tactical and strategic planning methods across functional areas of the
business
Order Fulfillment
● Order fulfillment process: a highly integrated process requiring persons from multiple
companies and multiple functions to come together and coordinate to create customer
satisfaction at a given place and time