Supply Chain Management

Customer Service OperationsLB III

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• Key concepts and practices• Key forms of relationships in the

supply chain• Key metrics in customer

relationship Management• How to maintain and improve

customer relationships

Customer Relationship Management (CRM)

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What is Customer Relationship Management

• CRM is a process that brings together information about:• Customers• Sales•Marketing Effectiveness• Responsiveness• Customer trends

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Customer Relationship Management

• Information collected through CRM can help improve:• Customer Service & Increase efficiency• Increase and streamline sales and marketing

processes• Reduce costs and increase overall profitability

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Understanding Business and Supply Chain Relationships

• Relationship refers to the interaction between customers and suppliers over a period of time• For businesses, relationship is not:•One or a few interactions• “arms length” – “as needed” –

“transactional”

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Understanding Business and Supply Chain Relationships

•Many companies define relationship as existing when the parties involved move from a state of independence to interdependence on one another

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• Supply chain relationships are vertical or horizontal in nature• Vertical – Between firms including • Retailers / Wholesalers• Distributors / Manufacturers• Suppliers of components and raw

materials

Supply Chain Relationships

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Supply Chain Relationships

• Horizontal – Between firms based on mutually beneficial arrangements• Each firm provides the service it is best suited for• Each firm manages the delivery of its services• Each firm works to integrate its services with

others• Ex. Supplier of packaging materials working with

a supplier of products to serve joint customers within the supply chain

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Intensity of Involvement

• Transactional or at “arms length” • One-time or even multiple purchases of

standard products or services are sometimes appropriate

• Close or Strategic Alliance – Built over time and reduces uncertainty, increase communication, loyalty, and performance• This relationship is “collaborative” and

requires resource commitments

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Differences in Relationships

• Duration of the relationship• Obligations of each partner • Expectations of each partner• Interaction/Communication between parties• Cooperation that occurs between parties

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Differences in Relationships Continued…

• Planning and visibility provided for each party• Goals (performance) agreed to by the

parties• Performance analysis expected to take

place• Benefits and burdens or responsibilities

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Service Performance Measurement

•Must be based on a common understanding of what will be measured and how• The goal is to develop

measurements that drive good customer service to achieve business success

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Common Service Performance Measures

• Time: On-time delivery / Receipt / Order Cycle Time • Quality – Satisfaction processing

accuracy is focused on customer service• Costs: Measurement for efficiency• Supporting Measures : Minimum order

quantity / Change order timing

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The Customer Life Cycle Management (CLM)

• Describes the steps a firm will go through to Find, Gain, Manage, and Keep customers

• Helps a firm move away from “silo” thinking that impede customer satisfaction and profits

• It builds long term value that focus all parties on the needs of the customer

• It captures future customer needs and interactions with other departments

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Customer Life Cycle Management (CLM)

• CLM is all about our Responsiveness to the customer

• CLM simplifies customer information through centralization

• CLM helps perform analyses and decision making

• CLM build profile of customers to spot patterns, unmet needs, ineffective communications, R&D opportunities, & cost savings

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Tools and Technologies Used in CRM

• CRM systems are used to:• Gather customer information • Analyze data such preferences• Provide access to the data through the

supply chain• Online transactions for customers• Personalized communications to

customers

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Types of Technologies Used in CRM

• Used to track customer’s relationship with a company such as:• Tracking points of contact • The frequency of purchases• The amount spent by each customer• Responses to letters, e-mails,

marketing campaigns

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Maintaining and Improving Customer Relationships• Catering to your customer’s needs is

the basis of good customer relationship• Happy customers become return

customers• Use software to have customer

information readily available for follow-up

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Improving Customer Relationships with

Technology• Online presence to facilitate

communication and share important information• Social media for ongoing

conversations –Facebook, Twitter – to present new products and services, marketing ideas and answer customer questions