In this chapter, you will learn to: Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage-ment, and supply chain management systems: Business processes supported, customer and business value provided, potential challenges and trends; understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.
Chapter Enterprise Business Systems Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-1 Learning Objectives Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource management, and supply chain management systems: • • • Business processes supported Customer and business value provided Potential challenges and trends Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-2 Why Study Customer Relationship Management? • It is easier than ever for customers to comparison shop and, with a click of the mouse, to switch companies As a result, customer relationships have become a company’s most valued asset Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-3 Case #1: Implementing CRM Systems Mitsubishi Motor Sales Goal: • Call center should provide one voice and one set of ears for the customer Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-4 Case #1: Implementing CRM Systems CRM Project Goals: • Choose best-of-breed CRM software components rather than integrated CRM suites • Implement changes slowly Must be simple, scalable, and satisfy need Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-5 Case #1: Implementing CRM Systems CRM Project Challenges: • Keeping 18 vendors heading in the same direction • Dirty data had to be cleansed Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-6 Case #1: Implementing CRM Systems What are the key application components of Mitsubishi’s CRM system? What is the business purpose of each of them? What are the benefits to a business and its customers of a CRM system like Mitsubishi’s? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-7 Case #1: Implementing CRM Systems Do you approve of Mitsubishi’s approach to acquiring and installing its CRM system? Why or why not? Why have many CRM systems failed to provide promised benefits like those generated by Mitsubishi’s system? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-8 Customer Relationship Management (CRM) Definition: • The use of information technology to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes in sales, marketing, and customer services that interact with a company’s customers Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 8-9 CRM Application Clusters Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved - 10 SCM Benefits ã Faster, more accurate order processing • Reductions in inventory levels • Quicker times to market • Lower transaction and material costs • Strategic relationship with suppliers Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 51 Causes of SCM Failures • Lack of proper demand planning knowledge, tools and guidelines • Inaccurate or overoptimistic demand forecasts • Inaccurate production, inventory and other business data provided by a company’s other information systems • Lack of adequate collaboration among marketing, production, and inventory management departments within a company • Immature, incomplete or hard to implement SCM software tools Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 52 Trends in SCM Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 53 Case #4: Benefits & Challenges of SCM Benefits of SCM: • Materials prices reduced • Fewer employees needed to manage supply chain • Order fulfillment time reduced • Increased sales by reducing inventory shortages ã Enables new business partnerships Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved - 54 Case #4: Benefits & Challenges of SCM Supplier reluctance: • Cost of hardware and software • Software can be confusing, contradictory and not sculpted to their needs • Impenetrable technical jargon Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 55 Case #4: Benefits & Challenges of SCM Why can both large and small businesses cut costs and increase revenues by moving their supply chains online? Use the companies in this case as examples What is the business value to Eastman Chemical and W W Grainger of their initiatives to help their suppliers and customers business online? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 56 Case #4: Benefits & Challenges of SCM Why are many small suppliers reluctant to business online with their large customers? What can be done to encourage small suppliers online? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 57 Case #5: SCM Best Practices Why is Wal-Mart’s IT infrastructure a key competitive advantage? • Wal-Mart invested early and heavily in cuttingedge technology to identify and track sales on the individual item level • The company is still pushing the limits of supply chain management, searching for and supporting better technology that promises to make its IT infrastructure more efficient Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 58 Case #5: SCM Best Practices The Wal-Mart Example: • Opened sales and inventory databases to suppliers • Implemented a collaborative planning, forecasting, and replenishment program • JIT inventory program that reduced carrying costs for Wal-Mart and its suppliers Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 59 Case #5: SCM Best Practices Do you agree that Wal-Mart is “the best supply chain operator of all time”? Why or why not? What has Mattel learned from Wal-Mart? How well are they applying it to their own business? Explain your evaluation Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 60 Case #5: SCM Best Practices What can other businesses learn from the experiences of Wal-Mart and Mattel that could improve their supply chain performance? Use an example to illustrate your answer Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved - 61 Summary ã Customer relationship management is a cross-functional enterprise system that integrates and automates many of the customer-serving processes in sales, marketing, and customer services that interact with a company’s customers Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 62 Summary • Enterprise resource planning is a crossfunctional enterprise system that integrates and automates many of the internal business processes of a company, particularly those within the manufacturing, logistics, distribution, accounting, finance, and human resource functions of the business Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 63 Summary • Supply chain management is a crossfunctional inter-enterprise system that integrates and automates the network of business processes and relationships between a company and its suppliers, customers, distributors, and other business partners Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 64 Chapter End of Chapter Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 65 ... aspects of customer relationship management, enterprise resource management, and supply chain management systems: • • • Business processes supported Customer and business value provided Potential... in a timely manner • Enterprise Agility – ERP breaks down many former departmental and functional walls of business processes, information systems, and information resources Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved... Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 38 Case #3: Business Value of SCM How could moving business information systems with suppliers and distributors to the Web result in such dramatic business benefits as experienced