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helps manager to understand the customer response, their demands, inventory in the stock, how much to be produced and where to deliver and when? Here comes the role of internet, which is considered as a cheapest inter-organizational information system, which helps in aligning the interdependent strategies to achieve cooperative rather than competitive role of SCM partners.
Need of IT
Information technology offers many opportunities for companies to cut cost and improve responsiveness to customers needs. Some of the positive points of IT enabled services are: IT is comparatively less capital intensive. It is environmental friendly and clean. It is not location specific and can be undertaken from anywhere. It does not require expensive infrastructure facilities.
Various IT solutions
I. Communications II. Electronic mail (e-mail)
Results of IT solution
We have observed that the Indian automobile industry is booming and internet is being utilized in automobile industry in a big way. Internet trying to interlink suppliers, manufacturers , wholesalers and retailers to have : Better control on inventory at various levels of supply chain. Better utilization of manpower. It keeping track of inventory.
Contind
But it is fact that internet has influenced the whole business strategy whether it is policy or it is physical implementation. Some of the areas wheres greater effect felt are given below: Communication Selection of vendors or partners Cost saving Reduction of lead times Improves product promotional activities
a) b) c) d) e)
Contind
a) Communication 24 hours communication throughout the year all
over the world. because of internet communication there are saving in manpower, stationary, postage and journey fare. Quick exchange of ideas and expertise, customers feedback collection becomes easier b) Selection of vendors or partners Suitable vendor selection from many vendors from any part of the world Since whole world is connected through internet, it becomes easier to select business partners for the joint ventures
Contind.
c) Cost saving Reduce cost of preparing letters and sending letters, saves postage cost Achieving order and placing order become less costly d) Reduction of lead times Reduce lead time of material supply Reduce retrieval time of documented information
e) Improves product promotional activities Reduce the expenditure for market expansion and also reduce market mediation Improve relation with customer and helps in promotion of products in the form of advertisement
Limitation
There are also some limitation recorded: Lack of manager awareness with the system and lack of managements full commitments. Development of electronic data interchange is a costly affair Problems of security and privacy Since no face to face contact is there hence, lack of trust Customers also need awareness for effective utilization of internet in the business
BENCHMARKING
Benchmarking is the practice of being humble enough to admit that someone else is better at something, and being wise enough to learn how to match them and even surpass them at it.
cost, cycle time, productivity or quality of specific process or method to another that is widely considered to be an industry standard or best practice. It is the process for improving performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results.
Measurement
Comparison
Learning
Improvement
Contind.
1. Measurement- In the benchmarking, we
measure the performance level of own and the benchmarking partner, both for comparison and for registering improvements. 2. Comparison- We compare the performance levels, processes, practices etc. 3. Learning- We can learn from the benchmarking partners to introduce improvements in your own organization. 4. Improvements- It is the ultimate objective of any benchmarking study.
Benchmarking model
There are a number of models describing the different steps that constitute a benchmarking study. One such model is the so-called benchmarking wheel( Andersen, 1995)
5.Adapt
Choose best practice adapt to the companys condition and implement changes
1.Plan
Critical factors select a process for benchmarking, document the process and develop performance measures
4. Analyze
Identify the gaps in performance and find the root causes for the performance gap
2. Search
Find benchmarking partners
3. Observe
Understand and document the partners process, both performance and practice
Why the benchmarking is required in the business Benchmarking helps in identifying the factors that
are critical for success. It also portrays the factors that are less important and thus need a smaller share of resources. Since the business environment is changing rapidly, there is a need for continuously setting new benchmarks. The need for benchmarking arises when a company wishes to improve its operations or supply chain wants to bring about organizational changes Enter into some mergers and acquisitions
Types of benchmarking
Internal
Industry
Competitive
Generic
Contind.
1. Internal benchmarking- If one analyses the existing process and practices within various departments of an organization, it is known as internal benchmarking. the benefit of this benchmarking is that it enables an organization to focus on specific functions and processes in order to learn from its own best practices This is often called the first step in the benchmarking process and is the easiest kind of benchmarking to organize.
2. Competitive benchmarking- If a company analyses how its competitors are performing then its known as competitive benchmarking. It is also done for comparing the processes. The benefit is that it helps organization in strategic decision making by giving them a view of the strengths and weaknesses of its competitors. .
3. Industry benchmarking- if one analyses the trends and best practices that are prevalent in the industry and tries to imitate them in ones organization then it is called industry benchmarking 4.Generic benchmarking- if one makes comparison between processes and operations with industries from other fields then it is called generic benchmarking.
BENCHMARKING METHDOLOGY
Benchmarking involves the following steps: Scope and definition Choose benchmark partners Determine measurement method Data collection Analysis of discrepancies Presenting results, discussing improvement areas and making improvement plans Monitoring progress and planning ongoing benchmarking
2. a) Find- a better performer b) Collect- data on its operations 3. a) Compare- process b) Find- performance gap 4. a) Reason- performance gap b) look- ways to look overcome 5. a) Redesign- process b) Establish- new performance goals 6. a)Implement- plans b) Monitor- progress
Outsourcing in SCM
In order to understand the concept of outsourcing, there is a good example of Nike It is a fact that Nike is a virtual corporation The actual manufacturing is done by Nike sub contractors working out of Taiwan, Hong Kong. The actual manufacturing plants are located in Indonesia, China and Vietnam. The logistics, which involves transportation and storage, is handled by third party companies. And the stores that sell the final products are franchisee outlets.
Contind.
Nike is a virtual corporation that has outsourced
almost all activities, it has retained two processes in-house designing and brand management. Amazon.com is an online bookstore, it delivered and brokered bookstore services without a physical retail store presence Flipcart.com
Concept
The decision of a firm to perform its activities internally or get those activities done from an independent firm is known as make vs. buy decisions. This involves the following key decisions: a) What activities should be carried out by the firm and what activities should be outsourced? b) How to select the entities/ partners to carry out outsourced activities and what should be the nature of the relationship with those partners? c) Should the relationship be transactional in nature or should it be a long term partnership?
Decisions in Outsourcing
1. Make vs. Buy decisions
2. Identifying the core process
What is CRM?
CRM stands for Customer Relationship
Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. Good customer relationships are at the heart of business success.
CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a strategic process that will help you better understand your customers needs and how you can meet those needs and enhance your bottom line at the same time. This strategy depends on bringing together lots of pieces of information about customers and market trends so you can sell and market your products and services more effectively.
CRM is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way.
about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased
According to one industry view, CRM consists of: Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices)
relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners.
becoming an everyday business imperative. The reason for this is simple: company survival SCM has been around considerably longer than CRM. As a result, the two disciplines have matured independently. Examples- Dell company, Herman Miller a furniture manufacture.
Conclusion
CRM-SCM integration strives to satisfy and
promptly deliver products to customers, ensuring availability of the product and maintaining profitability of the manufacture. Ensure better customer service is offered Implement technology Extend the connection from the customer to the supplier( build to build)
1. The Supply chain 2. The Demand chain 3.Demand and Supply chain process: The
value chain
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