SUCCESS FACTORS IN ONLINE SUPPLY CHAIN MANAGEMENT AND E-CUSTOMER RELATIONSHIP MANAGEMENT INTRODUCTION

By | February 9, 2018

INTRODUCTION

 

Customer relationship management and supply chain management have been the focus of a great deal of practitioner interest and academic research over the last decade. Customer relationship management has allowed companies to spend more of their time and resources on valuable cus- tomers that make up the majority of their sales and profits. Customer identification/savings cards that are used during retail sales transactions are just one example of the use of CRM that allows companies to tailor their goods/services, marketing, and support appropriately. Such cards are common in consumer goods markets and have made their way into the entertainment service industry as well (Loveman 2003). Supply chain management has allowed companies to gain efficiencies as well as increased sales through reductions in inventories, lead times, and paper- work processing.

The tremendous growth of the Internet has led to the development of online versions of both customer relationship management and supply chain management. Electronic customer relation- ship management (eCRM) research is still in its initial stages and has focused primarily on the marketing aspects of online transactions (Romano and Fjermestad 2003). Likewise, research in online supply chain management (to be more generally defined as SCM for the remainder of this chapter) has come about only in recent years. This chapter uses a literature survey approach from a

 

broad array of sources across the fields of supply chain management, marketing, information sys- tems, and related areas in order to establish the important characteristics and qualities that SCM and eCRM share. Special attention is given to works that emphasize key business functions/processes or required conditions for the success of both. In order to analyze the critical success factors for these two related system types, a definition of success is provided in the next section.

An SCM application is effective, in the most general terms, when it produces efficiencies or increases sales for one or more members of the supply chain. For example, an online transporta- tion exchange is effective when it successfully matches buyers of transportation services with providers in a profitable manner for all involved, including the shipper, the carrier, and the inter- mediary. An online collaborative forecasting application such as Collaborative Planning, Fore- casting and Replenishment (CPFR) (McKaige 2001; White 1999) is effective when the cost and the responsiveness of the supply network improve because of the Internet-based collaboration.

In this chapter we adopt a broad definition of effectiveness or success to include both inter- nally and externally focused performance metrics. A useful frame of reference is the set of effec- tiveness metrics advocated by the supply chain operations reference model: reliability, responsiveness/flexibility, cost, and asset management (Supply Chain Council 2003). These metrics define effectiveness in an operational sense directly to SCM, incorporating both productivity and customer-related concerns.

In the context of eCRM, effectiveness or success includes the ability to tailor the goods or ser- vices provided throughout the supply chain to the needs of each member using an analysis of order- ing and related information. eCRM success may also be measured in a similar fashion with the supply chain operations reference model metrics. In the case of SCM, reliability can be defined as the ability to have stable lead times for products or materials managed online. For e-CRM, reliabil- ity can be defined as the ability to quickly identify and serve valuable customers in various online contexts. The other three metrics apply to both in a similar fashion. In this way, the performance of both SCM and eCRM can be measured in a multidimensional fashion. This is especially important, because the mission, strategy, and objectives of the firms participating in the online initiatives can vary considerably, based on the value of the product offered to customers (Keeney 1999).

This chapter first examines the nature of eCRM and SCM and then brings to light some of the factors that ultimately lead to success or failure. The similarities are especially auspicious, as eCRM and SCM are closely related in both goals as well as activities. Both contain the notion of catering to, and improving service for, the customer. Also, both utilize online technologies for the process of streamlining information gathering and exchange between suppliers and customers. While SCM focuses on the logistical nature of the transfer of goods or services, eCRM focuses on the tailoring of such goods or services to the customer’s wants and needs, including the notion that some customers cannot be served profitably and should be dropped. Salmen and Muir make the case that “e-loyalty” is brought about through wise use of eCRM systems (2003). They also put forth that a eCRM system enables the systematic, active construction and maintenance of digital customer relations throughout the complete life cycle of customer relationships. One can argue that any SCM system achieves the same general goals involving both suppliers and custom- ers with respect to the transfer of goods and/or services. In the sections that follow, both similari- ties and differences will be highlighted.

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