Week 7: SCM & CRM

Meet Daniel Schlagwein. He holds two degrees in Information Systems from the University of Cologne in Germany. He used to be a DJ, so, as you will find out during your next tutorial, some call him ‘DJ Danny’. His German accent is so beautiful that you have considered saying “danke schön” to him but refrained from doing so. He uses a Macbook, which he plugs into the Ritchie Theatre screen, because he will be your lecturer today. For the next hour, you will hear the word “ja” a lot, and smile like a fangirl every single time.

(Picture: Autobahn Cologne-Kussel by .ack-online.de)

The lecture is structured logically and clearly, so much so that I think of DIN 1451 with DJ Danny’s voice echoing in my head. We will be covering SCM and CRM systems, which are types of ERP systems.

Part 1: Supply Chain Management (SCM)

A supply chain is a collection of companies and processes moving a product from raw materials to a customer good. It includes upstream (from raw materials to the entity) and downstream (from the entity to customers). Since supply chains tend to be in a network structure rather than a linear or hierarchical structure, they are perhaps better known as supply networks.

An SCM system has modules to support planning i.e. forecasting, distribution planning (delivery to customer, warehousing, payment collection), production scheduling (optimise production efficiency), inventory safety stock. SCM modules also deal with execution, the efficient flow of physical goods, finances, and information. These functionalities rely on:

  • Visibility – the ability to track products as they move (RFID tags)
  • Analytics – the use of key performance indicators (KPIs) to measure supply chain efficiency and effectiveness
  • Communication systems (portals, XML)

SCM systems offer many potential ‘process’ benefits. The three examples given by DJ Danny include Just-in-Time Inventory (JIT), Vendor-Managed Inventory (VMI), and increased transparency for Corporate Social Responsibility (CSR). However, there is a downside. If you rely on your shiny SCM system too much, you may be hit with the bullwhip effect, whereby one little forecasting error will create a world of pain for you.

Part 2: Customer Relations Management (CRM)

Customer Relations is a downstream strategy to widen (more customers), lengthen (keep customers satisfied) and deepen (transform minor customers into profitable customers) relationships. This is achieved with speedier problem resolution (especially ‘first-call resolution’), more personalised service, better information provision, and most interestingly, feedback collection. Modules include:

  • Operational – supports day-to-day activities, including Sales Force Automation (SFA), which allows managers to track sales performance, and Customer Interaction Centre (CIC) and other forms of customer service and support
  • Analytical – analyses customer behaviour, for marketing purposes
  • Collaborative – customer interacts with all/any organisational departments

Moving right along…

The textbook reading for this week adds very little to your understanding of SCM and CRM if you’ve attended Daniel Schlagwein’s lecture. There’s an opening case study on the 2010 eruption of Eyjafjallajökull and the disruption it created to the supply chains of African florists, Mozzarella cheese makers, and BMW.

The tutorial is held online yet again. The case study is to investigate and compare vendors of SCM and CRM systems. Our team looks at Microsoft Dynamics CRM and SugarCRM. Some of the differences we focus on includ cloud-computing capabilities and underlying technologies (Microsoft SQL Server vs. LAMP stack).

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