Key Concepts in Enterprise Systems, SCM, and CRM

Posted on Apr 3, 2025 in Business Administration and Innovation Management

Core Business System Concepts

  1. Enterprise systems are information systems that allow companies to integrate information and support operations on a company-wide basis.
  2. Customer service is a core activity according to the value chain model.
  3. Technology development is a support activity according to the value chain model.
  4. A legacy system is not an ERP system.
  5. The processes associated with obtaining goods from external vendors are referred to as procure-to-pay processes.
  6. The processes associated with selling a product or service are referred to as order-to-cash processes.
  7. Make-to-order processes are most often associated with pull-based manufacturing of products.
  8. Information systems that focus on supporting functional areas, business processes, and decision-making within an organization are referred to as internally focused systems.
  9. An enterprise system that has not been customized is commonly referred to as a vanilla version.

Key SCM and CRM Definitions

  • JIT (Just-In-Time): An SCM innovation that optimizes ordering quantities such that parts or raw materials arrive just when they are needed for production.
  • Supply Chain Efficiency: The extent to which a company’s supply chain focuses on minimizing procurement, production, and transportation costs.
  • Supply Chain: Commonly used to refer to the collection of producers of supplies that a company uses.
  • Supply Chain Visibility: The ability not only to track products as they move through the supply chain but also to foresee external events.
  • CRM (Customer Relationship Management) Systems: Applications that help create and maintain lasting relationships with customers by concentrating on downstream information flows.
  • Customer Engagement Center: A part of operational CRM that provides a central point of contact for an organization’s customers.
  • SCM (Supply Chain Management) Systems: Applications that help improve interorganizational business processes to accelerate product development and innovation and reduce costs.
  • VMI (Vendor-Managed Inventory): A business model in which the suppliers to a manufacturer manage the manufacturer’s inventory levels based on negotiated service levels.
  • Vertical Market: A market composed of firms within a specific industry sector.
  • First-Call Resolution: Addressing the customer’s issues during the first contact.

Supply Chain and CRM Principles

  1. A supply network is commonly used to refer to the producers of supplies that a company uses.
  2. Under a VMI model, the suppliers to a manufacturer manage the manufacturer’s inventory levels based on negotiated service levels.
  3. The bullwhip effect refers to small forecasting errors at the end of the supply chain causing massive forecasting errors farther up the supply chain.
  4. Supply chain execution is not focused solely on procurement flow.
  5. Supply chain planning involves components such as:
    • Demand forecast
    • Transportation plan
    • Production plan
    • Sourcing plan
  6. A comprehensive CRM system includes operational, analytical, and collaborative CRM.
  7. SFA (Sales Force Automation) is closely associated with operational CRM.
  8. Tools like Twitter, telephone, and email can be used for promotional campaigns.
  9. A metric for quickly resolving customer issues is called first-call resolution.
  10. Categorizing customers based on statistical analysis of past behavior is sometimes considered an ethically questionable business practice.