CH11 - CRM and SCM

Question 1

What’s the concept of Customer Relationship Management (CRM)?

Answer 1

• it is a customer-centric way of thinking and acting.
• It’s a customer-focused and customer-driven organizational strategy.
• Organizations concentrate on assessing customers’ requirements for products and services and then provide a high-quality, responsive customer experience.

Question 2

Characteristics of CRM

Answer 2

• Enabled by IT in the form of various systems and applications
• CRM is not only about the software
• Problem with managing relationships: time and informations
• Modern CRM strategies: sustainable long-term customer relationships that create value for the company as well as for the customer.

Question 3

2 elements (Policies) a company needs to use CRM?

Answer 3

1. Company must identify the many types of customer touch points
2. Company needs to consolidate the data with each customer

Question 4

What’s a CRM process/strategy?

Answer 4

A process where a company treats different customers differently because their needs differ and their value to the company may also differ.

A successful CRM strategy not only improves customer satisfaction but also makes the company’s sales and service employees more productive, which in turn generates increased profits.

Question 5

What’s a Customer Churn?

Answer 5

all organizations inevitably lose a certain percentage of customers during a certain time frame

→ The optimal result of the organization’s CRM efforts is to maximize the number of high-value repeat customers while minimizing customer churn.

Question 6

What are CRM systems?

Answer 6

Basically, CRM systems are information systems designed to support an organization’s CRM strategy.

CRM systems lie along a continuum, from low-end CRM systems—* designed for enterprises with many small customers—to *high-end CRM systems—for enterprises with a few large customers.

Question 7

What are the 2 types of CRM systems?

Answer 7

• Low-end → designed for enterprises with many small customers
• High-end → For enterprises with a few large customers

Question 8

What is a customer touch point?

Answer 8

• Any point of interaction between a customer and an organization

Question 9

What are the Customer Touch Points?

Answer 9

Traditional customer touch points: telephone contact, direct mailings, and actual physical interactions with customers during their visits to a store.

Other additional customer touch points: email, websites, and communications through smartphones

Omni-channel marketing: effective marketing makes use of all of these channels (touch points) in sync with one another

Question 10

What’s data consolidation?

Answer 10

• Modern interconnected systems built around a data warehouse now make all customer-related data available to every unit of the business.
• This complete data set on each customer is called a 360° view of that customer.
• A 360° view enhances company’s relationship with its customers and ultimately make more productive and profitable decisions.

→ Customers information is very data heavy, must use data warehouses**

Question 11

What’s collaborative CRM?

Answer 11

• Info. sharing leads to collaborative CRM.
• provide effective and efficient interactive communication with the customer throughout the entire organization.
• integrate communications between the organization and its customers in all aspects of marketing, sales, and customer support

Question 12

What are Operational CRM systems? (Important)

Answer 12

Supports front-office business processes.

Question 13

What are front-office business processes?

Answer 13

those that directly interact with customers; that is, sales, marketing, and services.

Question 14

What are the types of operational CRM systems?

Answer 14

• customer-facing applications
• customer-touching applications

Question 15

What the definition of a customer-facing application?

Answer 15

An organization’s sales, field service, and customer interaction centre representatives interact directly with customers

Question 16

What are examples of customer-facing applications?

Answer 16

• Customer Services and Support
• Sales Force automation (the component of an operational CRM system that automatically records all of the components in a sales transaction process)
• Marketing
• Campaign Management

Question 17

What is the definition of customer-touching application?

Answer 17

Customers who use these technologies interact directly with the applications themselves.

Question 18

What are examples of customer-touching applications?

Answer 18

• Search and Comparison Capabilities
• Technical and Other Information and Services
• Customized Products and Services
• Personalized Web Pages
• FAQs
• Email and Automated Response
• Loyalty Programs

Question 19

What’s an Analytical CRM systems? (Important)

Answer 19

Analytical CRM systems provide business intelligence by analyzing customer behavior and perceptions.

Question 20

Analytical CRM systems are use to analyze customer data for?

Answer 20

• Designing and executing targeted marketing campaigns
• Increasing customer acquisition, cross-selling, and upselling
• Providing input into decisions relating to products and services
• Providing financial forecasting and customer profitability analysis

Question 21

What is the relationship between Operational and Analytical CRM? (Important)

Answer 21

Whereas operational CRM systems support front-office business processes, analytical CRM systems provide business intelligence by analyzing customer behaviour and perceptions.

These systems also create statistical models of customer behaviour and the value of customer relationships over time, as well as forecasts about acquiring, retaining, and losing customers

Question 22

What’s a supply chain?

Answer 22

flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers.

Question 23

The trust between the members can enhance de supply chain and increase …

Answer 23

• Supply chain visibility: Every member of the supply chain have access to the data)
• Inventory Velocity: The more quickly a company can deliver products and services after receiving the materials required to make them = the higher the inventory velocity = the more satisfied the company’s customers will be.

Question 24

What is part of the supply chain structure?

Answer 24

• Upstream
• Downstream
• Internal
• Reverse flows

Question 25

What is Upstream in the supply chain structure?

Answer 25

where sourcing or procurement from **external suppliers** occurs

Question 26

What is Downstream in the supply chain structure?

Answer 26

where distribution takes place, frequently by **external distributors**.

Question 27

What is Interal in the supply chain structure?

Answer 27

where packaging, assembly, or manufacturing takes place.

Question 28

What are Reverse flows in the supply chain structure?

Answer 28

Returning a product (ex: shirt that doesn’t fit) is a reverse flow transaction.

Question 29

What are the components of a supply chain?

Answer 29

* Tiers of suppliers * Flows

Question 30

The 3 tiers of supplier in the supply chain?

Answer 30

* Tier 3: Basic Products * Tier 2: Sub-assemblies * Tier 1: Integrated components A supplier may have one or more subsuppliers, a subsupplier may have its own subsupplier(s), and so on.

Question 31

The 3 types of flow in a supply chain

Answer 31

1. ***Material flows*** are the physical products, raw materials, supplies, and so forth that flow along the chain. Material flows also include the reverse flows discussed earlier. A supply chain thus involves a *product life cycle* approach, from “dirt to dust.” 2. ***Information flows*** consist of data related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data. 3. **F*****inancial flows*** involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data.

Question 32

What's supply chain management (SCM)?

Answer 32

Process of planning, organizing, and optimizing the various activities performed along the supply chain

Question 33

What's supply chain management (SCM) function?

Answer 33

improve the processes a company uses to acquire the raw materials it needs to produce a product or service and then deliver that product or service to its customers

Question 34

What are the 5 basic components of supply chain management (SCM)?

Answer 34

**Plan**: Planning is the strategic component of SCM. Organizations must have a strategy for managing all the resources that are involved in meeting customer demand for their product or service. involves developing a set of metrics (measurable deliverables) to monitor the organization’s supply chain to ensureefficiency, high quality and value to customers for the lowest cost. **Source:** In the sourcing component, organizations choose suppliers to deliver the goods and services they need to create their product. Supply chain managers: develop pricing, delivery, and payment processes with supplierscreate metrics to monitor and improve their relationships with their suppliersdevelop processes for managing their goods and services inventory, including receiving and verifying shipments, transferring the shipped materials to manufacturing facilities, and authorizing supplier payments. **Make:** This is the manufacturing component. Supply chain managers schedule the activities necessary for production, testing, packaging, and preparation for delivery. This component is the **most metric-intensive part of the supply chain**, in which organizations measure quality levels, production output, and worker productivity. **Deliver:** This component is often referred to as **logistics**. Organizations coordinate the receipt of customer orders, develop a network of warehouses, select carriers to transport their products to their customers, and create an invoicing system to receive payments. **Return:** Supply chain managers must create a responsive and flexible network for receiving defective, returned, or excess products back from their customers, as well as for supporting customers who have problems with delivered products.

Question 35

SCM systems benefits

Answer 35

SCM systems are a type of **interorganizational information system**, meaning that information flows among two or more organizations, and connects the IS of business partners. * IOSs enable the partners to perform a number of tasks: * Reduce the costs of routine business transactions. * Improve the quality of the information flow by reducing or eliminating errors. * Compress the cycle time involved in fulfilling business transactions. * Eliminate paper processing and its associated inefficiencies and costs. * NICMake the transfer and processing of information easier for users.

Question 36

What's the pull model?

Answer 36

Also known as make-to-order, the production process begins with a customer order. Therefore, companies make only what customers want, a process closely aligned with **mass customization**. ISSUE: forecasts are often incorrect

Question 37

What's the push model?

Answer 37

Also known as make-to-stock, manufacturers produce goods based on projected or anticipated demand. They keep a steady inventory.

Question 38

What are the problems along the supply chain? (3) **(IMPORTANT)**

Answer 38

1. Uncertainties (demand forecast?) 2. Coordination of multiple activities, internal units, and business partners 3. Bullwhip effect

Question 39

What are the uncertainties in the SC?

Answer 39

* **demand forecast** - influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers' general confidence * **delivery times -** production machine failures to road construction and traffic jams * **Quality problems in materials -** can create production delays

Question 40

What are the uncertainties in the SC?

Answer 40

* **demand forecast** - influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers' general confidence * **delivery times -** production machine failures to road construction and traffic jams * **Quality problems in materials -** can create production delays

Question 41

What's the bullwhip effect? **(IMPORTANT + GRAPHS)**

Answer 41

* erratic shifts in orders up and down the supply chain * variables that affect customer demand can become magnified when they are viewed through the eyes of managers at each link in the supply chain. * When self-interest placed above that of the chain! * Hoarding * Stockpiling

Question 42

What are the solutions along the SC? **(IMPORTANT)**

Answer 42

* Vertical integration → Buying its upstream suppliers * Using inventories to solve supply chain problems * Building inventories * Just-in-time (JIT) inventory system * Information sharing through extranets * Vendor-managed inventory (VMI) – Your supplier mages your inventory * Try to reduce friction by using IS

Question 43

What are the IT supports for the SC?

Answer 43

* Electronic Data Interchange (EDI) and XML-Based Web Services * Extranets * Portals and Exchanges * Emerging Technologies: * Robotics, drones, autonomous (driverless) vehicles and three-dimensional (3D) printing

Question 44

What is a Electronic Data Interchange (EDI)?

Answer 44

**A communication standard that enables business partners to transfer routine documents electronically**, EDI formats these documents according to agreed-upon standards It then transmits messages over the Internet using a converter, called translator.

Question 45

What is a **Extranet and a VPN**?

Answer 45

Link business partners over the Internet by providing them access to certain areas of each other’s corporate intranets. VPN to make the exchange on the internet more secure.

Question 46

Portals and Exchanges: Two basic types of corporate portals

Answer 46

1. **Procurement portals** (i.e., sourcing portals): for a single buyer and multiple suppliers 2. **Distribution portals**: for multiple buyers with a single