IBM 301 Lecture Notes - Lecture 13: Supplier Relationship Management, Customer Relationship Management, Supply Chain

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Published on 20 Mar 2019
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
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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
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
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