In his posting “Customer-Driven Supply Chain” Chee Wai has given a thorough explanation of different customers in the supply chain. Chee Wai asserts that there are two types of customers internal customers, which mainly are employees of the company, while the other is an external customer who can be further divided into intermediate and end-user customers.
Intermediate customers are the retailers, distributors, manufacturers’ rep, wholesalers, and transport companies. The end-user customers are usually referred to those who buy the product for their personal use, like those who buy from Wal-Mart etc.Speaking about the transactional marketing and relationship based marketing Chee Wai stated that transactional marketing main emphasis is on maximizing benefits from every transaction. They have no concern regarding future exchanges, customer satisfaction or customer loyalty.
Relational marketing on the other hand emphasizes on creating an integrated, cross-functional focus on collaboration between supplier-customer relationships. This approach brings total quality management, customer service and marketing closely together.The main objective is to turn new customers into regulars, then converting them to strong supporters and advocates, as they will become an important referral source. In his posting “Customer Relationship Management” Chee Wai identifies the advantages of customer relationship management. He argues that like many people deem CRM as merely a software tool but practically it is not like that.
According to him the benefits of CRM are multiple, both qualitative and quantitative. CRM helps to organize all aspects of vendor-customer relationship into organized and systematic way.CRM helps the company to improve the services and provides 360 degrees of the customer and his requirement. CRM also helps in understanding the relationship and definition according to the customer’s perspective, thus not relying only on the management definition and interpretation.
It also help integrate the back-end services like order fulfillment, billing, planning and manufacturing etc. It also helps in the segmentation of customers, predict customer behavior, personalize customer services and communication, and increase customer responsiveness and sales.It also helps in improving collaboration among companies in the supply chain. Speaking about the types of companies and businesses that may require CRM and the tools which are most likely to be needed by different companies and businesses Chee Wai argued that those companies and businesses which are heavily involved in sales, marketing and customer services. Companies involved in these type of businesses have more opportunities to meet their customers, thus their top priority is to understand and fulfill their needs.
It helps the sales team to improve productivity, track customers, and early spotting any potential problems with the customers. The marketing people will need CRM for customer relationship management to direct company’s marketing techniques in the most affective direction. The tools needed by most companies are segmenting tools, reducing multiple marketing tools, predicting customers’ behavior tools, personalizing communication tools, and automated sales tools etc. In his posting The Role of Procurement” Chee Wai speaks about the role of purchasing function and the three procurement strategies.According to Chee Wai the role of purchasing functions include basic functions like purchasing products and services at the right price, at the right quantity, according to the right specification, that meets customer’s demand.
Moreover procurement manages supply base by evaluation and selection of appropriate suppliers, review specification and make suitable proposals, act as a primary source of contact to suppliers, and also manages the suppliers’ base. It also helps develop strong relationship between functional groups.It also helps in developing purchase strategies, which in turn helps in the development of organizational strategies. Speaking about the three procurement strategies Chee Wai stated that the first strategy is volume consolidation, which reduces the number of suppliers and consolidates the volume purchased on few suppliers. The second strategy is supplier operational integration, which helps the supplier and the producer to develop closer relationship, like sharing production plan and joint operation process.While the third strategy is Value management, which makes possible mutual collaboration in such a manner that it will ensure the success of the products and services.
E-procurement has several advantages, which include lower investment cost for the buyer, reduce need of searching for products, are optimal for suppliers in term of control, cost, maintenance and functionality, increase visibility and access to the market, reduces amount of inventory, lower transaction cost, and increased transparency.On the other hand some disadvantages include limited support for the buyer, buyers losing control over catalogue data, limited support for pre-arranged contracts, need training for the buyers, buyers must know where to find the site, and integration to the financial management system may be difficult for the buyer etc. Key Learning Points of Yu-Jin: In his posting “Customer-Driven Supply Chains” Yu Jin argues that though their may be 6 different types of customers in the supply chain, but most of them fall within these two categories i. e.
he intermediate customer and the ultimate customer. These two are the most important customers in the supply chain. Moreover the key differences between transactional marketing and relationship based marketing are; transactional marketing focuses on sales, while the latter focuses on building relationship, transaction marketing has limited customer contact while the latter has close, frequent contact, transactional marketing focuses on selling based on product benefits while the relationship-based marketing focuses on selling based on value to customers.Transactional marketing efforts are clearly measurable based on quantity or profits, but the customers are highly inconsistent, thus quick response to change in demand of the customer is required. Relationship-based marketing has more loyal customers, but the demand of a given product is harder to forecast.
In his posting “Customer Relationship Management” Yu Jin explains the advantages of CRM. These advantages include sharing of information, improving communication, increase in sales, better forecasting regarding customers’ demand, increased customer satisfaction, lower cost and increase in profit.The companies, which may be in most need of CRM solution, include all those, which are selling a service or product, and the bulk of their businesses, is through relationship marketing. The most needed CRM tools include Microsoft CRM, Sugar CRM, SalesForces CRM, and Goldmine CRM. In his posting “The Role of Procurement” Yu Jin has stated that the role of procurement has4 objectives, which are to support organizational requirements, to manage procurement process and supply base, develop strong relationship with other functional groups, support organizational goals and objectives.According to Yu Jin the three procurement strategies are volume consolidation, supplier operational integration and value management.
The first strategy refers to purchasing higher volumes of supplies from fewer suppliers. The second strategy refers to the situation when supplier’s operations are integrated into buyer’s operations. The third strategy refers to when the supplier is involved in the product and product design. Advantages of e-procurement include saving the time in processing the documents, and reduction of cost.
On the other hand the disadvantages include high one time cost in the development of the necessary infrastructure, the lack of human contact, the risk of fraudulent, and problems in identifying quality. My Key Contributions: In the traditional perspective there were only two types of customers, i. e. home users and corporate users. In the modern perspective there are two broad types of customers, intermediate customers and end-users. The transactional strategy only focuses on increasing the sales, while the relationship based marketing strategy focuses on developing long-term relationship with the existing customers.
The advantages of CRM are that it provides important customer related information, helps develop automated transaction facilities and effective e-business tools, helps in customer segmentation, and helps predict customer behavior etc. Nearly every company, which has customers, needs a CRM solution. The most needed CRM tools are customer segmentation tools, customer purchase-patterns analysis tools, customer profitability determination tool, and automated sales force tools. Procurement has a profound impact on the overall supply chain that’s why executives have adopted new supply chain concepts.
The three procurement strategies are three phases of integrating the supplier’s operation with the buyer. The first phase is selection of the customers, the second phase is the integration of operations, and the third phase is sharing information and ideas regarding the product manufacturing and design. The posting “Role of Procurement” was really helpful from Chee Wai, because it helped us know about the role of procurement in much a broader perspective. While the posting “Customer-Driven Supply Chain” was very helpful from Yu Jin, as his arguments regarding the number of customers in the supply chain was really insightful.
