Q.1.

Mention and discuss the different components of customer relationship

management, internal supply chain management and supplier relationship management in
a manufacturing firm.
Ans:
Customer Relationship Management:
The CRM consists of processes that take place between an enterprise and its customers
downstream in the supply chain. The goal of the CRM is to generate customer demand and
facilitate transmission and tracking of orders. Weakness in this process results in demand being
lost and a poor customer experience because orders are not processed and executed effectively.
The key processes under CRM are as follows.
Marketing
Marketing processes involve decisions regarding which customers to target, how to target
customers, and what products to offer, how to price products, and how to manage the actual
campaigns targeting customers. Successful software vendors in the marketing area within CRM
provide analytics that improve the marketing decisions on pricing, product profitability, and
customer profitability, among other functions.
Sell
The sell process focuses on making an actual sale to a customer. The sell process includes
providing the sales force the information it needs to make a sale and then execute the actual sale.
Executing the sale may require the salesperson or the customer to build and configure orders by
choosing among a variety of options and features. The sell process also requires such
functionality as the ability to quote due dates and access information related to a customer order.
Successful software providers have targeted sales force automation, configuration, and
personalization to improve the sell process.
Order management
The process of managing customer orders as they flow through an enterprise is important for
the customer to track his order and for the enterprise to plan and execute order fulfillment. This
process ties together demand from the customer with supply from the enterprise. Order
management software has traditionally been handled by legacy systems or been a part of an ERP
system. Recently, new order management systems have emerged with additional functionality
that enables visibility of orders across the often numerous order management systems that exist
within a company.
Call/service center
A call/service center is often the primary point of contact between a company and its
customers. A call/service center helps customers place orders, suggests products, solves
problems, and provides information on order status. Successful software providers have helped
improve call/service center operations by facilitating and reducing work done by customer
service representatives, often by allowing customers to do the work themselves.

Internal Supply Chain Management:

ISCM is focused on operations internal to the enterprise. ISCM includes all processes involved
in planning for and fulfilling a customer order. The various processes included in ISCM are as
follows.
Strategic planning
This process focuses on the network design of the supply chain.
Demand planning
Demand planning consists of forecasting demand and analyzing the impact on demand
of demand management tools such as pricing and promotions
Supply planning
The supply planning process takes as an input the demand forecasts produced by demand
planning and the resources made available by strategic planning, and then produces an optimal
plan to meet this demand. Factory planning and inventory planning capabilities are typically
provided by supply planning software.
Fulfillment
Once a plan is in place to supply the demand, it must be executed. The fulfillment process
links each order to a specific supply source and means of transportation. The software
applications that typically fall into the fulfillment segment are transportation and warehousing
applications.
Field service
Finally, after the product has been delivered to the customer, it eventually must be
serviced. Service processes focus on setting inventory levels for spare parts as well as scheduling
service calls.
Supplier Relationship Management:
SRM includes those processes focused on the interaction between the enterprise and suppliers
that are upstream in the supply chain. There is a very natural fit between SRM processes and the
ISCM processes, as integrating supplier constraints is crucial when creating internal plans. These
processes are the design collaboration, sourcing, negotiation, buy, and supply collaboration
processes. Significant improvement in supply chain performance can be achieved if SRM
processes are well integrated with appropriate CRM and ISCM processes. For instance, when
designing a product, incorporating input from customers is a natural way to improve the design.
This requires inputs from processes within CRM. Sourcing, negotiating, buying, and
collaborating tie primarily into ISCM, as the supplier inputs are needed to produce and execute
an optimal plan.

Q.2. What do you understand by supply chain responsiveness? Explain why it is not
advisable to achieve more responsiveness for any supply chain.
Ans:
Supply chain responsiveness includes a supply chain's ability to do the following:

Respond to wide ranges of quantities demanded

Meet short lead times
Handle a large variety of products
Build highly innovative products
Meet a high service level
Handle supply uncertainty

These abilities are similar to many of the characteristics of demand and supply that led to high
implied uncertainty. The more of these abilities a supply chain has, the more responsive it is.
Responsiveness, however, comes at a cost. For instance, to respond to a wider range of
quantities demanded, capacity must be increased, which increases costs.

Q.3. Mention and explain in detail about any five obstacles to achieve strategic fit in
manufacturing supply chain.
Ans:
Obstacles to achieving strategic fit:
The key to achieving strategic fit is a company's ability to find a balance between
responsiveness and efficiency that best matches the needs of its target customer. In deciding
where this balance should be located on the responsiveness spectrum, companies face many

obstacles. These obstacles have made it much more difficult for companies to create the ideal
balance. They have afforded companies increased opportunities for improving supply chain
management. Managers need a solid understanding of the impact of these obstacles because they
are critical to a company's ability to reap the maximum profitability from its supply chain.
1) Increasing variety of products
Product proliferation is rampant today. With customers demanding ever more customized
products, manufacturers have responded with mass customization. Products that were formerly
quite generic are now custom-made for a specific consumer. The increase in product variety
complicates the supply chain by making forecasting much more difficult. Increased variety tends
to raise uncertainty, and increased uncertainty hurts both efficiency and responsiveness within
the supply chain.
2) Decreasing product life cycles
In addition to the increasing variety of product types, the life cycle of products has been
shrinking. Today there are products whose life cycles can be measured in months, compared to
the old standard of years. These are not just niche products, either. PCs now have a life cycle of
several months, and even some automobile manufacturers have lowered their product life cycles
from five plus years to about three years. This decrease in product life cycles makes the job of
achieving strategic fit more difficult, as the supply chain must constantly adapt to manufacture
and deliver new products, in addition to coping with these products' demand uncertainty. Shorter
life cycles increase uncertainty while reducing the window of opportunity within which the
supply chain can achieve fit. Increased uncertainty combined with a smaller window of
opportunity has put additional pressure on supply chains to coordinate and create a good match
between supply and demand.
3) Increasingly demanding customers
Customers are constantly demanding improvements in delivery lead times, cost, and product
performance. If they do not receive these improvements, they move on to new suppliers. Many
companies had periodic, standard price increases not due to a rise in demand or any other factor,
but simply because raising prices was the way business was done. Now, one repeatedly sees
companies that cannot force through any price increases without losing market share. Today's
customers are demanding faster fulfillment, better quality, and better-performing products for the
same price they paid years ago. This tremendous growth in customer demands means that the
supply chain must provide more just to maintain its business.
4) Fragmentation of supply chain ownership
Over the past several decades, most firms have become less vertically integrated. As
companies have shed noncore functions, they have been able to take advantage of supplier and
customer competencies that they themselves did not have. This new ownership structure,
however, has also made managing the supply chain more difficult. With the chain broken into
many owners, each with its own policies and interests, the chain is more difficult to coordinate.
Potentially, this problem could cause each stage of a supply chain to work only toward its own
objectives rather than the whole chain's, resulting in the reduction of overall supply chain
profitability.

5) Globalization
Supply chains today are more likely than ever to be global. Establishing a global supply
chain creates many benefits, such as the ability to source from a global base of suppliers who
may offer better or cheaper goods than were available in a company's home nation.
Globalization, however also adds stress to the chain, because facilities within the chain are
farther apart, making coordination much more difficult. Globalization has also increased
competition, as once-protected national players must compete with companies from around the
world. In the past, with fewer companies satisfying customers' needs, customers were willing to
tolerate longer response times. However, in most industries there are now many more firms
aggressively pursuing their competitors' business. This competitive situation makes supply chain
performance a key to maintaining and growing sales while also putting more strain on supply
chains and thus forcing them to choose their trade-offs even more precisely.
6) Difficulty executing new strategies
Creating a successful supply chain strategy is not easy. Once a good strategy is formulated,
however, the execution of the strategy can be even more difficult. Many highly talented
employees at all levels of the organization are necessary to make a supply chain strategy
successful. Although we deal mostly with the formulation of strategy in this book, one should
keep in mind that skillful execution of a strategy can be as important as the strategy itself. All of
the obstacles discussed earlier are making it more difficult for companies to achieve strategic fit
in the supply chain. These obstacles also represent a tremendous opportunity in terms of
untapped improvement within the supply chain. The increasing impact of these obstacles has led
to supply chain management becoming a major factor in the success or failure of firms.