SCM & CRM

Comparison of Traditional Management Systems with Supply Chain Management and Customer Relationship Management Systems

Executive Summary

This paper is all about the difference among the traditional distribution systems, Supply chain management systems and customer relationship management systems. This paper gives a brief introduction about the concept of supply chain management systems and customer relationship management system. Evolution of these both systems is also present in this paper. Then, there are several approaches has been discussed which shows the difference between the traditional systems and these latest management systems. There is also a conclusion about the whole discussion followed by the recommendations.

Table of Content

Problem Statement1

What is SCM & CRM?1

Supply Chain Management1

Customer Relationship Management2

Comparison of SCM & CRM with Traditional Management Systems5

Differences in Approaches5

Increased Efficiency6

Cost Saving7

Increase in Profitability8

Conclusion9

Recommendations10

References12

Appendices13

Comparison of Traditional Management Systems with Supply Chain Management and Customer Relationship Management Systems

Problem Statement

The main aim of this paper is to find out the differences among the traditional management systems and supply chain management and customer relationship management systems.

What is SCM & CRM?

Supply Chain Management

A supply chain is the involvement of all the parties, which remains involve, directly or indirectly in fulfilling customer's requests. It does not only include the producer and suppliers. It also involves retailers, warehouses and transporters (Hugos, 2011).

SCM involves all departments of the organizations which take part in receiving and fulfilling the customer request. These functions can be innovative product, distribution & logistics, finance, operation, pre-sale and post-sale customer services. SCM involves the continuous flow of information, raw material and financials among all the departments (Leeman, 2010).

Most of us think that supply chain just involves one department at each stage, but in contrast, several departments are involved at a single stage. For e.g. a production department receives raw material from various suppliers and then transport the finished product to different warehouses, which shows that SCM involves networks. A common SCM system involves following stages:

Raw material Providers

Producers

Distributors

Retailers

Customers

Each stage in SCM is integrated with information flow, transfer of funds and several other factors. This flow generally occurs in two way directions among the departments. The main focus of a SCM system is to enhance the perceived value of the customer. If a customer receives the product on time and in a very efficient manner, then it increases its trust over the company and becomes loyal with the company. The customer here can be of both type, i.e. Individual customers or commercial customers (Leeman, 2010).

Customer Relationship Management

CRM is defined as, the automation of manual business activities which involves every department through various interrelated channels. It involves technological infrastructure, which makes the integration of each department easily and effectively (Peelen, 2008).

Another definition says that, CRM is a process that involves all the departments, identifying the need of customers, creates customer awareness, build a strong relationship with customers and make them loyal with the products and the company.

One main thing is that CRM is a process that works continuously to enhance the value for the customer. It is not a onetime step which starts and ...