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 What is the role of a supply chain management (SCM) system?

Supply Chain Management system is the control of the flow of raw materials and goods from the point of origin to the point of destination. It can be stated as the planning of the inter-linked network through which the raw materials will pass to the organisation and then finally to the end consumer.

Supply Chain Management has become a very important part in developing a sustainable organisation, as for the organisation to be more cost-effective, they need to have other firms to supply them the materials and then also provide the finished goods to the consumer (Hollensen, 2015, p.15). This concept has led to the start of supply chain management as an essential part of any organisation.

Few advantages of Supply Chain Management are given below :

In the context of Customer Service:

  1. It helps achieve on-time delivery.

  2. It helps achieve accurate location-based delivery.

  3. It helps achieve fast delivery services of the finished products.

In the context of Operating Cost:

  1. It greatly reduces purchasing cost- Retailers rely on SCM to deliver costly finished products as fast as possible to reduce the holding cost, which in turn reduces the overall purchasing cost.

  2. It greatly reduces the production cost- All retail organisations depends on SCM to deliver their raw materials to the required assembly plant, to avoid any unwanted delay or damage, which will have negative consequences on the production cost.

How does SCM fit into Porter’s three generic strategies?

The main goal of any business strategy is to achieve a competitive advantage over its competitors. Porter’s three generic strategies which were developed by Porter in 1990’s and it has now become an integral part of business strategy. It consists of three parts, which are:

1. Cost strategy- Cost strategy is based on achieving the lowest cost possible for all the raw materials required. Supply Chain management is used to reduce the overall production and purchasing cost of the organisation. It is only natural that all departments of the supply chain must improvise cost strategy independently to gain an overall cost reduction in the final product (Christopher, 2016, p. 15).

2. Differentiation strategy- This strategy states that any organisation can have a competitive advantage over others by developing some features in their products that are unique. Each level in the supply chain can apply this strategy to develop unique raw materials and final products that are different from its competitors.

3. Focus strategy-This strategy states that any organisation must find its target consumers and study the needs and demands of them, for a particular product it develops. All the involved departments of the supply chain can use this strategy to develop their products according to needs of the target consumer.

Question 2       (7 marks)

What are the typical functions in a CRM system? How does CRM fit into the RGT framework?

The main function of Customer Relationship Management Systems is to manage all customer related issues. CRM deals with the interaction within the organisation and finally its customers as well as provide facility to store and analyze sales data (Stadtler, 2015, p.20).

There are Five main functions of Customer Relationship Management Systems, they are Lead Capture, Prospect Tracking, Customer Tracking, Market Reporting and Service Tracking. These functions are described below:

  1. Lead Capture- Potential customers are known as leads. CRM software can capture lead automatically, considering it is linked to a website, where different users are asked to fill their information in a form, which can then be automatically stored by the system.

  2. Prospect Tracking- It is the responsibility of the CRM system to analyze leads who has furthermore developed an interest in becoming their customers, CRM system analyzes and identifies these prospects.

  3. Customer Tracking- It is the duty of the CRM software to keep track of the customers who are regular buyers. A prospect that is purchased even once from the organisation is  tracked by this feature of the CRM software.

  4. Market Reporting- It is the responsibility of the CRM software to develop a report which clearly points out the marketing issues of the organisation such as which ad received more clicks.

  5. Service Tracking- It is a function of CRM software which helps determine the customer service related issue (Khodakarami and Chan, 2014, p.35).

The RGT framework identifies opportunities, which can help the organisation flourish. The RGT framework makes resource-based decisions as per the requirements of the organisation (Brandenburg, et al. 2014, p.310). There are three parts in RGT framework:

  1. Running the business-This function helps to improve the regular operations of the organisation with the help of several measures, keeping in mind the goals of the organisation and the demands of the customers.

  2. Growing the business- This function helps to render an attractive nature to the business and contributes to its growth. CRM comes into this part of the framework as it can help identify the potential customers of the organisation , and also keep a record of their behavior, demands and also keep a direct relationship with its customers(Sudhakaran and Ramu, 2014, p. 85). Thus, CRM can reveal ample amount of information which in turn can make the organisation grow (Olgiati, et al. 2017, p. 250).

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