CRM - October 2007 - (Page 34)

SUPPLY CHAIN CRM products and their precise arrival times for clients. Cemex married its supply chain management (SCM) and CRM systems in order to better respond to customer inquiries, coordinate distribution processes with partners, and streamline operations at its distribution terminals. But Cemex’s use of SCM is just one example of a new approach that many companies are now taking. SCM has always been good at providing information—such as order management, order status, and total cost—to end users within the organization, but, with the out-sourcing of manufacturing and transportation functions to third-party vendors, enterprises are looking to extend this information to their partner and customer networks. As a result, businesses desire tools that will expand visibility into their extended networks, says Noha Tohamy, a principal analyst with Forrester Research. “This can range from visibility and collaboration with external partners [to] a tool that manages the network by defining the different kinds of relationships the company has with its trading partners. In the end, it’s usually good news for the customer because they’re getting their products or services quicker and at a cheaper price,” she says. everybody involved in the supply process to communicate,” Enslow says. New strategies have also developed to meet the demands of a global economy. Some companies, for example, are now practicing what’s called demand-driven supply networking (DDSN), or taking customer demand, supply chain, and product development into account to drive products to market. Companies practicing DDSN, such as Dell, Proctor & Gamble, Wal-Mart, and Best Buy, are likely to carry 15 percent less inventory, are 60 percent faster to market with products and/or services, and complete 17 percent more orders, according to AMR Research’s Supply Chain Top 25 for 2007. “These advantages can separate the predators from the prey,” says Kevin O’Marah, vice president of research at AMR. DDSN represents a radically new approach to SCM. In the past a company would most likely base its SCM entirely on its production and manufacturing capabilities and schedules. To compete in today’s marketplace, O’Marah says, companies must incorporate customer demand and service, product design and innovation, and supply management—which includes sourcing, manufacturing, and distribution. That level of integration doesn’t come cheap: In fact, DDSN requires “massive amounts of IT investment,” says Tony Friscia, CEO of AMR Research. A successful DDSN framework connects work processes to increase the speed, quality, and profitability of everything from order management to new-product launches. Friscia says businesses should consider electronic data interchange (EDI) systems, ERP, SCM, CRM, and product lifecycle management (PLM) solutions as the key pieces of the DDSN puzzle. “Yes, there was oversell during the ’90s tech boom,” Friscia acknowledges, referring to the bad reputation some of these applications have with big businesses. But times have changed: “The ‘perpetual license’ sales model was bad for customers, but the systems work. DDSN leaders are getting plenty of return on investment, provided they blend best practices and innovative IT applications, and don’t rely exclusively on packaged software.” In addition, these highly rated companies prioritize accordingly, placing top-level executives atop each of the three areas of responsibility associated with DDSN: product, supply, and customer demand. To that end, partner relationship management (PRM) and PLM have become nourishing letters in the industry’s alphabet soup, as these solutions contain much of the functionality that bridges the gap left between SCM and CRM. PRM tools let vendors, partners, and customers access a company’s invoices, revenue agreements, and payment exchanges, among other items, all via a Web portal. While most of this information is utilized by the sales or accounting departments, thanks to PRM’s focus on automating the www.destinationCRM.com THE WORLD IS NOT ENOUGH As businesses have searched the globe seeking new customers, markets, and manufacturing sites, they’ve stretched their supply chains in the process. Companies are shipping products to and from suppliers, manufacturers, and customers from all corners of the world. This global confluence is what’s driving many of the technologies and strategies surrounding SCM today, says Beth Enslow, enterprise research and supply chain practice leader at Aberdeen Group. “It’s not good enough to just take the order,” she says. “Now you have to provide a continuous stream of information about its status, feasibility, and total cost to customers and partners throughout the world.” This, Enslow says, is critical so companies can ensure their products are reaching their customers on time and on budget. “You don’t want your customers receiving unexpected transportation expenses or delays in shipments—or worse, receiving them without you knowing about it.” This avenue of supply chain information throughout a company’s partner network has become a two-way road. Many companies are now utilizing Web portals as part of their SCM strategy, allowing partners and/or customers to proactively check inventory levels, order status, shipment progress, and billing costs. The big advantage here is customers and partners can stay on top of increasingly complex supply chain operations and inform partners of potential changes that might influence the flow of goods. It’s also important as more businesses, such as the automotive and retail industry, switch to a B2B2C supply model. “It allows 34 CUSTOMER RELATIONSHIP MANAGEMENT | OCTOBER 2007 “Our customer experience revolves around our ability to supply them with our product.” http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - October 2007

Contents Front Office Reality Check Customer Centricity Coupons Without the Clipping Something Special in the Air Oracle’s Name Game Market Focus: Sports & Entertainment: CRM Scores for Sports Franchises Statistically Speaking The Pulse Required Reading Are We There Yet? Help Them Help Themselves The Chain Gang Pay Day OutClick Media Gets a Second Opinion Best Kiteboarding Makes a Splash with NetSuite True-Blue Service Documentation Secret of My Success The Tipping Point Re:Tooling Pint of View

CRM - October 2007

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