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Integrating SCM, CRM, and ERP: A Comprehensive Overview of Enterprise Applications

This chapter delves into the interconnected principles of Supply Chain Management (SCM), Customer Relationship Management (CRM), and Enterprise Resource Planning (ERP). It emphasizes the critical role of Operations Management (OM) in transforming resources into goods and services, while highlighting the importance of strategic planning in optimizing supply chains and customer interactions. Additionally, it discusses how technology and information systems facilitate real-time processes in SCM and CRM, enabling organizations to improve efficiency, quality, and customer satisfaction.

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Integrating SCM, CRM, and ERP: A Comprehensive Overview of Enterprise Applications

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Presentation Transcript

  1. CHAPTER EIGHT Enterprise applications

  2. Introduction • Supply Chain Management (SCM) • Customer Relationship Management (CRM) • Enterprise Resource Planning (ERP)

  3. SCM / OM • The two disciplines are hopelessly interconnected • Your book talks about them separately but I’ll talk about them together • Operations Management (transformation – making things) • Supply Chain Management • (movement of things)

  4. Operations Management (Terms 1) • Operations management (OM) - the management of systems or processes that convert or transform resources (inputs) into goods and services (outputs) • Production is a subset of OM • Production - is the creation of goods using the factors of production (making things from raw materials with machines) • Production management - describes all the activities managers do to help companies create goods

  5. Operations Management (Terms 2) • Value-added - the term used to describe the difference between the cost of inputs and the value of outputs • Materials requirement planning (MRP) systems • Make sure raw materials are available for the manufacturing process • Supply chain – All parties and processes involved in procurement of raw materials and the distribution of finished goods

  6. Operations Management (Terms 3) • Transportation planning systems track and analyze the movement of goods (raw materials, work in progress, finished goods) • JC Penney • Distribution management systems manage goods to distribution centers and to retail outlets • These systems are tightly coupled

  7. The IT Role in SCM / OM • IT provides the systems (transactional, MIS, DSS, GIS, GPS, wireless) to make all of this work in real time or near real time)

  8. OM Business Tasks • Forecasting • Capacity planning • Locating facilities • Scheduling (and synchronizing) • Raw materials, production, distribution • Managing inventory • Quality assurance

  9. SCM / OM Components (Steps) • Plan • Source (we buy goods used in the means of production) • Make (we transform raw materials into finished goods) • And the time it takes to transform resources (production) or move resources (distribution) • Deliver (We get them where they are going) • Return (Defective / unwanted goods come back to us)

  10. Supply Chain (Illustration)

  11. SCM Strategic Goals (Plan) • The strategic portion of SCM • Set up a system for managing the entire supply chain • Partners • SCM monitoring • Wal-Mart and others • Location of distribution centers • UPS package flow systems • Minimize trucks and transportation distances

  12. OM Strategic Goals (Plan) • Lower costs for commoditized items • Improve product or process quality • MINI, Lays Example • Optimize delivery speed • Flexibility in process conversion • MINI example

  13. SCM Components (Source) • Find suppliers • Boeing and the 787 • Wal-Mart • Establish trading protocols • EDI • Establish pricing metrics • Determine what resources will be needed • When resources will be needed • Where resources will be needed

  14. SCM Components (Make) • Schedule production • Just-in-time inventory management • We produce assemblies and finished goods • Account for production downtime • Measure production output • Account for production variances against expected values

  15. SCM Components(Make)

  16. SCM Components (Make) • Review the Mini video • Discuss assembly processes

  17. SCM Components (Deliver) • The logistics component • Implementation of effective transportation and distribution systems • Outsource warehousing • Location of distribution centers • Selection of transportation companies • Discuss Wal-Mart video

  18. SCM Components (Return) • We use the term reverse logistics • The system whereby customer can return good they don’t want • Particularly important in the e-commerce world

  19. Technology and SCM • EDI allows automated transaction processing • Purchasing / fulfillment / payment systems • Decision-support systems to optimize routing and transportation • Cross-functional systems to integrate finance / sales / accounting / etc…

  20. SCM Success Metrics

  21. Quality Systems • Six sigma – reduce defects to 3.4 per million opportunities • ISO 9000 – Quality assurance standards • IS 14000 – Environmental best practices • CMMI – develop best practices

  22. CRM (Introduction) • CRM goals • Customer has a complete view of the organization • Organization has a complete view of the customer

  23. CRM (Illustration)

  24. CRM Strategy • It’s more than a software application – it’s a business strategy • Harrah’s • Walgreens • Brokerages • The list is endless

  25. Business Value of CRM • You know your customer • Purchase activity • Recency • Frequency • Monetary value • Your customer knows you • American Express

  26. CRM Benefits / Goals • Provide better customer service • Make call centers more efficient • Cross sell products more effectively • Help sales staff close deals faster • Simplify marketing and sales processes • Discover new customers • Increase customer revenues

  27. Evolution of CRM • We began with basic reporting • Who bought what • We began to analyze the core data to identify customer habits • We now use predictive technologies to assess future customer behavior

  28. CRM Examples

  29. IT and CRM • Marketing • Sales and operations • Customer service

  30. CRM Marketing • List generation for existing and future customers • Managing and measuring the effectiveness of marketing campaigns • Cross-selling and up-selling • Amazon.com • Lands End

  31. CRM Sales and Operations • Sales force automation • Generate prospects (leads) and manage them • Sales Management and contact management systems • Salesforce.com • Siebel

  32. The Sales Process

  33. CRM and Customer Service • Call centers • Use CRM software to solve common questions • Increase single call solutions • The risks of outsourcing and off shoring • Keyword detection • Automatic call routing • Wait time calculations

  34. CRM and Customer Service • Web-based self service • Improve customer satisfaction and reduce costs through decreased call center use • Click to talk technology • Examples • Harrah’s TotalRewards online • FedEx and UPS package tracking

  35. CRM and Call Scripting • Benefits • Track and solve common problems • Presents uniform outputs to the customer • Risks • Does not always account for ‘savvy’ customers • Is it plugged in?

  36. CRM Metrics (Sales) • Number of prospective customers • Number of new customers • Number of retained customers • Number of open leads • Number of sales calls • Number of proposals • Amount of new revenue • Amount of recurring revenue

  37. CRM Metrics (Service) • Cases closed same day • Number of cases handled by agent • Number of service calls • Average number of service requests by type • Average time to resolution • Average number of service calls per day

  38. CRM Metrics (Marketing) • Customer retention rates • Churn rate • Number of responses by marketing campaign • Number of purchases by marketing campaign • Revenue generated by marketing campaign

  39. Analytical CRM Tools • These are decision support systems • Use for customer personalization • Identify profitable or unprofitable customers • Treat good customers well • Harrah’s / American Express • Identify customers that might be leaving and why

  40. CRM Trends • Manage supplier relationships • Manage partner relationships • Manage employees • This is really HR

  41. CRM Failures • Employees feel threatened and don’t adopt the tools • The customer becomes just a number • Web 2.0

  42. ERP (Your Book’s Definition) • Enterprise resource planning – integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations

  43. ERP (My Definition) • All of an organization’s business processes are integrated into a single system (SCM, CRM, accounting, finance, manufacturing, along with specialized function applicable to specific industries)

  44. ERP (Players) • SAP has 30+ percent of the market • Oracle / PeopleSoft • IBM • Microsoft Dynamics

  45. ERP (Functions)

  46. ERP (Business Processes)

  47. ERP (Benefits) • Breaks down or eliminates information silos • Business processes are performed more efficiently • All functional systems interact together

  48. ERP (Risks) • Failure can be catastrophic • Hershey • http://www.slideshare.net/ankitm2/erp-failure-in-hersheys-presentation • This list is endless • Failure is typically caused by • Poor planning • Not understanding and adapting business process to the ERP

  49. The Evolution of ERP

  50. Core ERP Components (1) • Accounting and Finance • Integrates traditional AR / AP / inventory / payroll / general ledger • Financial reporting systems • Operates with multiple currencies

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