CRM In Supply Chain Management: Enhancing Relationships And Driving Business Success
Customer relationship management (CRM) is a set of practices, technologies, and strategies that help organizations monitor interactions with consumers.
This concept is essential in supply chain management (SCM), as it offers organizations a way to assess, improve, and positively impact customer relations across the globe. SCM involves working across borders, making it challenging to build relationships – which is where CRM comes into play.
This article looks at the benefits of CRM strategies, the challenges of its implementation, positive case studies, and what companies can expect in the future of CRM in the supply chain management process.
Benefits of CRM in Supply Chain Management
Here are a few of the benefits of implementing CRM in supply chain management:
- Increased visibility and transparency: CRM systems allow organizations to increase their customer satisfaction visibility by monitoring customer interactions. In turn, this allows businesses to be more transparent with clients on how business processes can better meet their needs.
- Improved customer service and satisfaction: By implementing CRM systems, organizations have a better chance of understanding their customers’ wants and needs. Businesses can target their services and implement strategies that will align with clients’ requirements. This can have a significant impact on customer satisfaction.
- Better collaboration and communication: Once transparent communication has been established, organizations and their clients feel more comfortable sharing ideas and collaborating to create a tailored service that is mutually beneficial.
- Streamlined operations and reduced costs: All of the above can help the supply chain to streamline operations. In the long run, this can greatly reduce costs because the organization knows what works best and can focus on those aspects.
CRM Strategies for SCM
Customer relationship management strategies integrate with supply chain management to improve customer experience and targeting:
- Customer segmentation and targeting: Here organizations divide customers into different groups to tailor services to their needs. This can be based on industry, location, and preferences. Targeting specific consumer groups can greatly improve customer experience, loyalty, and chances of increased purchases.
- Personalization of customer interactions: One of the main reasons for implementing CRM strategies for SCM is to personalize experiences through managing customer interactions. Clients want to feel that they are receiving personalized service; this builds trust and is instrumental in business success.
- Creating customer-centric supply chains: Customer preferences and demands can be predicted by analyzing data. These insights help organizations to provide timely and efficient services, as they anticipate consumers’ needs, reducing wait times and inventory issues.
- Leveraging technology for CRM in SCM: Technology plays a vital role in both customer relationship management and supply chain management. It allows organizations to track, collect, and analyze relevant data easily. Technology can also pick up on customer patterns, specifically in SCM technology like blockchain, which can drastically improve tracking and turnaround times.
Challenges of Implementing CRM in SCM
Implementing a customer relationship management system is fantastic for SCM. However, there are some challenges to take into consideration:
- Integration with existing systems: Implementing new systems is always a struggle, regardless of a business’s size. It takes a lot of training and getting everyone on board before a full rollout can happen. That’s why finding the right CRM system is so important.
- Data management and analysis: Technology-based CRM systems are significantly different from traditional systems in SCM. Learning how to manage and analyze customer data accurately requires training and time investment.
- Ensuring privacy and security: Moving to a technology-based system comes with its own set of challenges – one of the most significant being security concerns. Customers and employees need to know that their data is safe at all times. This might take some work to show that the new system is reliable and won’t affect organizational security.
- Resistance to change: This is a normal part of the process, particularly if an organization has been running for a long time. Investors, employees, and higher-ups might resist change because of the time and resources required. That’s why it’s often recommended to implement a slower rollout to make adjusting easier.
Case Studies: Successful Implementation of CRM in SCM
Coca-Cola
Coca-Cola is a multinational corporation that was founded in 1892, making it the perfect example of a CRM success story.
Since technology systems were not available at the start of Coca-Cola, they know about the challenges addressed above. They have also had the time and finances to work and experiment with customer relationship management systems.
The corporation also has huge supply chains with investments, employees, and companies across the globe.
In 2006, the company invested and created the Bottling Investments Group (BIG). Coca-Cola owns this brand, but it is run as a separate entity to ensure businesses across the globe are receiving the necessary support. Coca-Cola provides the ingredients, but the manufacturing and bottling take place on a local level.
This made it vital for the company to find CRM software that could work globally.
Coca-Cola uses SAP CRM, a comprehensive software that aids large organizations to manage customer relations, marketing, and sales. This specific system allows members within the Coca-Cola supply chain to access important information, communicate with relevant teams, and keep on top of any issues that might affect relationships with consumers.
Team members, field workers, retail stores, bottlers, and everything in between have access to a system where they can receive help quickly, ensuring that the supply chain won’t fail. The real-time system keeps everyone informed and connected.
Dell
Dell is one of the leading global technology companies. It provides individuals, businesses, and multinational corporations with computer software and hardware.
One of the main selling aspects of Dell is that it allows for a direct-to-consumer sales model where customized computers are available online.
Dell has fantastic CRM software that allows the company to focus on several methods of improving its supply chain:
- Customer segmentation: The CRM software breaks down Dell’s customers by geographical location, system requirements, customer type (individual, business, school, government), and hardware needs.
- Direct access to help: Dell has an online system where clients can get direct help from the company when necessary.
- Online forums: Customers have access to a global online forum where they can engage with and find solutions from others that might have had similar issues. This also helps Dell monitor customer feedback.
- Targeted marketing efforts: The segmentation of the customer base allows Dell to recommend products and services that may help, based on customer information and their specific needs. This targeted approach makes customers feel heard and increases their trust in the company.
Amazon
Amazon is the leading online shopping platform. It has built its reputation by providing customers with efficient service that they have come to rely on. 89% of Amazon customers say they trust the company for their e-commerce needs.
The organization’s app sees over 98 million users a month and is continuously growing, as the need for online shopping skyrockets.
For a company that has had so much success, it comes as a surprise to most that the CRM system for Amazon works in a relatively simple way for its SCM success.
To start with, shoppers must open an account to make purchases through Amazon. This allows the company to manage customer accounts to see what they are likely to need in the future, their budgets, and their location. Amazon can then make recommendations and track what works based on customer information.
In addition, customers have the chance to review orders directly on the site. This means they feel heard and validated in real time without waiting to share their concerns or provide feedback.
Amazon also has a tremendous tracking system that keeps on top of everything from warehousing and transport, right down to the local delivery to customers. This is one of their major selling points, as it nurtures a sense of trust and transparency. They are always kept up to date and informed directly through Amazon.
Customers have direct access to help through Amazon’s 24-hour call center, chat service, or email. This once again helps customers feel supported, building trust and transparency.
Future Trends and Opportunities in CRM for SCM
Here are a few trends the world of customer relationship management in SCM is going to focus on:
- Integration of AI and automation: Advances in technology and the implementation of AI are helping organizations predict customer preferences more accurately. It also optimizes supply chain operations through advanced tracking and automation for inventory needs.
- Use of blockchain technology for supply chain management: Blockchain technology is changing the entire SCM process. It automates everything from tracking and inventory to payments and contracts. This helps deliver fast and secure results, strengthening and managing customer relationships.
- Emphasis on sustainability and ethical practices: Customers are far more concerned with the ethical and sustainability practices that come with their purchases. Organizations need to focus on traceability and transparency to satisfy customer demands to know the origin of their purchases.
- More collaboration: Technology within SCM has promoted collaborations across the globe. There is far more emphasis on partnerships that make things faster, easier, and more efficient for organizations and customers. CRM systems keep things on track with customer relations in an ever-changing economic landscape.
- Expansion of CRM beyond traditional customer relationships: While some believe that technology divides us, it has actually brought organizations and customers closer through transparent interactions. Communication is quicker and there is more emphasis on personalized customer experiences.
Comparison with Traditional Supply Chain Management
Differences in focus and approach
Traditionally, the focus of SCM was to get goods delivered to the customer. It was about a quick turnaround with a focus on getting goods from the distributor to the customer.
While this is still vital today in supply chain management, getting things from point A to point B has become a lot easier with modern technology and tracking platforms.
This means the focus has shifted from goods distribution to building customer relationships. SCM is more about being transparent and building a long-lasting relationship through efficient and great service.
Competition within the supply chain operations sector demands organizations to focus on growing and maintaining their customer base and improving their services over time.
Customer expectation also means that organizations not only need to uphold their existing services but constantly strive to improve them. That’s where CRM software comes in. It’s taken traditional supply chain management systems and raised the customer relations “game” to another level.
Advantages of CRM in SCM over traditional SCM
Technology has made things a lot easier to manage. Traditional SCM systems often relied on paper trails and ticking checklists off at every port. Unfortunately, this leaves a lot of room for mistakes that not only impact organizational efficiency but could have a run-on effect on things like inventory management.
Customer relationship management in SCM means that organizations can use technology to their advantage by tracking inventory accurately. This also decreases theft and fraud.
New supply chain management software prioritizes integrating different tasks. It makes things more straightforward and opens the door to everyone remaining accountable. This is from top-level supply chain managers, right down to local delivery services.
Additionally, new customer relationship management software allows businesses to keep track of customer behavior. Follow-up calls and promotional mail are unnecessary; customers have direct contact with product pages to leave reviews and access to live chats if there are issues.
There is also much more of a focus on transparency than ever before. Newer technology allows customers to know where their products are coming from and the effect this may have on sustainability. This, in turn, makes businesses more aware of whether or not their practices are sustainable.
The world today relies on transparency and that is one area where new supply chain management software is thriving. Customers are kept in the loop at all times, resulting in a higher customer satisfaction rate.
Potential drawbacks and limitations
While CRM platforms have made a very positive impact on the SCM industry, everything in life has its drawbacks.
Some supply chain managers feel that technology has taken the human-contact aspect out of the supply chain. However, the world has moved into a technology-driven space, and “traditional” relationships take a lot of time and money.
Technology platforms are also replacing many human jobs in the supply chain. With the need for hundreds of workers at each port, tracking each box is slowly but surely becoming redundant. However, with new technology come many opportunities for more jobs in every sector.
It’s important to remember that no matter how advanced technology becomes, there will always be a strong need for human interaction in the supply chain. Mergers, partnerships, and groundwork will always need the human factor.
Conclusion
CRM and SCM work hand in hand, and these processes are more important today than ever before. Customers expect a service that is personalized, transparent, and reachable.
More businesses, no matter the size, will at some point need to implement modern CRM and SCM platforms to keep up with rapidly increasing customer expectations.
CRM is vital to any business’s success: at the end of the day, customers and clients will always be the bread and butter of a company.
FAQs
How can CRM improve supply chain management?
CRM can improve SCM by building meaningful relationships between organizations and customers. Grounding these relationships in transparency improves customer loyalty and leads to higher retention.
What are the best practices for successful CRM in SCM?
Best practices for successful CRM in supply chain processes include promoting collaborations, understanding customer needs, finding the right technology platforms, and monitoring the overall performance to ensure businesses are improving customer satisfaction rates.
What are some examples of companies that have successfully implemented CRM in SCM?
There are thousands of examples, but the most successful has to be Amazon. The global conglomerate has taken a very advanced CRM platform and simplified it for customers and partners. Their models for retaining clients through data-driven customer information are fantastic, with quick access to solutions and support.
Sources:
https://www.ukessays.com/essays/marketing/customer-relationship-and-management-marketing-essay.php
https://www.coca-colacompany.com/company/coca-cola-system
https://commence.com/blog/2020/12/13/crm-supply-chain-management/
https://dfreight.org/blog/benefits-of-crm-for-supply-chain-management/