• SCM and CRM

• By Debasree Paul
• Supply chain management (SCM) is a
vast discipline that stretches from
the procurement of raw materials
from suppliers to the delivery of
finished goods via distribution and
logistics channels. SCM includes
demand planning and
partner/supplier collaboration
 •supply chain management is concerned with planning and

coordinating the activities of organizations across the supply

chain, from raw material procurement to finished goods delivery.

In today’s global economy, effective supply chain management is

vital to the competitiveness of manufacturing enterprises as it

directly impacts their ability to meet changing market demands in

a timely and cost effective manner.

• The US-based Wal-Mart, the largest
retailer in the world, is believed to be the
best supply chain operator of all times.
• Much of the efficiency achieved by the
company in managing its supply chain is
because of its proactive use of IT and
Internet-enabled technologies.
• It used the supply chain management
practices to enhance the efficiency of
each function of supply chain including
procurement, warehouse and logistics
management, inventory management
• Ever since its inception, in 1962, Wal-
Mart has been renowned for employing
innovative business practices in all its
business processes especially the supply
chain. In the early 1970s, Wal-Mart
became one of the first retailing
companies in the world to centralize its
distribution system.

Under the system, goods were centrally

ordered, assembled at a specially-built
massive warehouse, known as the
distribution center (hub), from where they
were dispatched to the individual stores
 CRM
• Customer relationship management
(CRM) covers methods and
technologies used by companies to
manage their relationships with
clients.
• Information stored on existing
customers(and potential customers )
is analyzed and used.
• CRM is a corporate level strategy,
focusing on creating and maintaining
relationships with customers
• CRM should identify factors important
to a client , promote a customer
oriented philosophy , adopt customer
based measures, develop end to end
processes to serve customers,
,provide successful customer support
, handle customer complaints ,track
all aspects of sales etc.
•  Key elements of CRM, allow a business
to collect and maintain valuable data
such as customer contacts and history
of purchases; maintain profiles of
customer preferences; improve
customer communication channels; and
identify new selling opportunities.

• An improved response to customer

queries and a better understanding of
customer needs helps build customer
loyalty . It’s much less expensive to
retain an existing customer than to
acquire a new one. CRM lets you keep
•  Major benefit can be the development of
better relations with existing customers,
which can lead to:
• increased sales through better timing due
to anticipating needs based on historic
trends
• identifying needs more effectively by
understanding specific customer
requirements
• cross-selling of other products by
highlighting and suggesting alternatives
or enhancements
• this can lead to better marketing
products or services by focusing on:
• effective targeted marketing
communications aimed specifically at
customer needs
• a more personal approach and the
development of new or improved
products and services in order to win
more business in the future
• ultimately this could lead to:
• enhanced customer satisfaction and
retention, ensuring good reputation in
the marketplace continues to grow
• increased value from existing
customers and reduced cost associated
with supporting and servicing them,
increasing your overall efficiency and
reducing total cost of sales
• improved profitability by focusing on
the most profitable customers and
dealing with the unprofitable in more
• As part of its drive to increase customer
satisfaction, in May 2000, ICICI decided to
implement CRM across its retail business.
The move, the company believed, would
give it an integrated view of its customers
across companies and delivery channels,
thus helping it fine tune its offerings to
suit their specific needs.
• Subsequently, it evaluated several CRM
packages and finally zeroed in on Siebel
due to the domain knowledge on retail
finance built into the product, its
functional depth in Sales Force
Automation and Customer Support and