7/30/2019 CSCP Module 3

CSCP Module 3
Study online at quizlet.com/_50no5

# of floor failure events

1. : supplier-caused discrepancy is found after part is sh ipped to stores or assembled, organization must adjust

performance index
align internally 
2. : step 1 to successful alliance: key issues and decisions involving key stakeholders

appoint dedicated alliance mgr

3. : step 5 to successful allia nce: oversee and implement specific methodology for managi ng the relationship

assemble team
4. : step 2 integration strategy: chann el master invites few key partners from each cons tituent to create anointer-organization

team to begin col laboration; conducts assessment of demand, s upply, competition, a nd systems to determine wha t will set this network 
apart
 benefits of CDW 
5. : contains info a bout companies customers, products, and marketplace; benefits incl ude: (1) s trategic marketing - CDW dat

can identify and implement offers to loyal customers while enticing new customers with low introductory offers; improves segmentation b
allowing data on customers, their preferences, and vulnerabilities; (2) new product development - input into product design and
development decisions; (3) channel management - effectiveness of chan nels a nd the strength of importance of ch annel to market segmen
(4) sales productivity - customers' channel preference and purchas ing patterns to help in crease sales productivity; (5) one-to-one marketin
- allows customized programs and a one customer marketing strategy; greatly enhances overall customer satisfaction and loyalty 
 benefits of CTM
6. : (1) capacity procurement - carriers can anticipate demand rather than guess where and when; shippers can consolidate

shipments, decrease admin costs, and better align carriers nationw ide; (2) inbound management - receives can a nticipate inbound goods
and consolidation of loads, reducing costs, and use carriers more efficiently; (3) integrated movements - volumes from multiple locations

 within organization, a cross divisions , or across orga niza tions are combined; decrease in freight expense, improved service, increase in
committ4ed service; (4) transportation marketplace - match transportation capacity with demand; shippers can locate coverage for unusu
load volumes and avoid premium freight costs
 benefits of ISO
7. : (1) help ensure development, manufacture, and supply of products that are more efficient, safer, and cleaner; (2) facilitate

national and international trade and make it more fair; (3) provide governments with a technical base for health, safety, and environmen
legislation and conformity assessment; (4) promote best practices and sharing innovative technological advances and good mgmt practic
(5) safeguard consumers and users of products and services; (6) promote information s haring a nd provide solutions to common problems
 benefits of managing SC network relationships
8. : increase ability to reach common goals ; increase efficiencies thru cost reduction,

demand enha ncement, a gility improvement, s horter cycle times, lower inventory levels - shorter lead times and cycle times, safety stock ca
 be reduced, improved on-time deliveries, increased customer satisfaction, improved forecast accuracy, better responsiveness to market
needs, lower shortage costs
 benefits of segmentation
9. : customers expect market to come to them instead of them going to market; lifetime customer relationships a re

more likely wh en customers feel a company is meeting their unique needs; CRM business have more opportunity to learn a bout customers
and use that to make them lifetime customers an d increase profit
 benefits of SRM software
10. : (1) w orks well with most ERP systems & helps them achieve full potential; (2) helps reduce cycle time on sourci

projects; (3) makes it easier to select suppliers - prices can be compared quickly; software allow s buyers to add past performance to equatio
(4) makes it easier to standardize purchasing decisions; (5) makes communication between buyer and seller faster
 benefits of strategic sourcing
11. : (1) traditional purchasing focuses on purchase price; strategic sourcing focuses on true cost to the custom

(2) traditional purchasing is transactional; strategic sourcing is collaborative; (3) traditional purchasing never crosses boundaries that
distinguish 2 business entities; strategic sourcing allows opportunities for realignment and collaborative business processes, info flows,
and workflows; (4) traditional purchasing benefits from technology but cannot implement technology to the same degree as strategic
sourcing can; (5) traditional purchasing does not increase the visibility of the entire SC the way strategic sourcing does
 buy on the market
12. : type of supplier relationship where traditional approach is for purchas ing buys for a n immediate need; (a) proximity -

relationship is transactional and not ongoing or exclusive; (2) visibility - sharing of purchasing needs but not strategies or plans; (3)
interaction with competitors - significant; (4) communication - computerized interaction; (5) culture - lower-value relationships
call center
13. : generate info tha t immediately updates customer info profile and any predictive model scoring in the CRM system

capabilities of SRM technology 

14. : goal is to streamline and make more effective the processes between an orga nization and its suppliers; c

 be applied to transactions and ana lysis; (1) gain visibility across suppliers and commodities - helps facilitate gathering, cleans ing, and
presenting procurement info to a llow organizations the visibility they need to support their business decisions; (2) leverage corporate buy
power - provides info to negotiate best contracts and support corporate goals; (3) monitor the effectiveness of procurement programs,
suppliers, and contracts - enables the organizati0on to measure its procurement performance in terms of cost savings, quality, delivery,
price, and overall effectiveness; (4) spend analysis - identify who they are buying from, wha t they are buying from each supplier, and
 when/h ow it was purchas ed
certification process
15. : extensive on-site evaluation of suppliers against ag reed-upon performance levels in areas s uch as on-time delivery,

quality, price reductions, an d responsiveness; certified supplier has show n complete and thorough understanding of the orga niza tion's
needs; it is a s upplier selection tool an d a means to improve supplier performance
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certify suppliers
16. : step 7 certification process: certified supplikers stand out in a ll areas of relationsh ip

characteristics of successful alliances

17. : (1) individual excellence - each partner has something to offer; motive is to pursue opportunity;

interdependence - partners' strengths a re complementary; stronger as a partnership; (3) importance - a lliance figures into each partner's
goals a nd strategies; (4) investment - commitment to the relationsh ip is evidenced by their investment of time, people, and resources; (5)
information - communications are open; (6) integration - partners have many connections and sh ared operational procedures at differen
levels; (7) institutionalization - alliance is given formal status with clear objectives; (8) integrity - trust in intangible but vital element of 
alliance; (9) interpersonal skills - critical to building and sustaining successful relationship

characteristics of supplier relationships 18. : (1) proximity - how long is relationship? How narrowly defined is it?; (2) visibility - how mu
info sharing exists? What type of info is being shared?; (3) interaction with competitors - casual hookup?; (4) communication - how man
points do we touch? H ow much trust exists?; (5) culture - any attempt to sh are cultures or influence each others' culture?
collaboration principles
19. : (1) understand needs of partners - solutions offered alig n with needs & capabilities of SC partners; (2) focus on

most profitable partner - Pareto 80/20 rule; (3) use SC assets collectively - understand customer and SC network to determine best solution
for implementation; (4) monitor performance - processes & systems must be in place to measure performance; (5) continuously improve -
SC network is to successfully respond to changing customer needs, it must be able to re-invent SC partner competencies
collaboration/strategic alliance
20. : type of supplier relationsh ip ruled more by agreements than contracts; replaces shopping for competitiv

 bids; (1) proximity - long-term relationsh ip; (2) visibility - full sharing of goals, s trategies, & tactics; attempt to reflect partners plans in
own; (3) interaction with competitors - li mited or none; (4) communication - extensive interaction; high level of trust; (5) culture - mergin
of cultures
collaborative planning
21. : (1) collaboration on inventory mgmt & new product development - organizations are more competitive and enjoy 

greater profit margins ; (2) collaboration between manufacturers and customers, distributors, and s uppliers - SC can more quickly respond
customer demand thru better scheduling, better inventory mgmt, enhanced products; more likely to lead to products that match needs of 
marketplace, w here consumers are willin g to pay a little more
collaborative transp ortation mgmt (CTM)
22. : holis tic process that brings together SC trading partners an d service providers to drive

inefficiencies out of the transport planning and execution process; adds value by identifying transportation inefficiencies in most order
fulfillment processes; helps reduce wait time carriers experience before loading a nd unloading, optimizes weight and volume capacity of 
transport resources, and decreased deadhead miles by coordinating transportation a ssets w ithin trans portation network to ensure drivers
have return loads; designed for inbound and outbound flows
committment to change
23. : change is constant and inevitable; winning SC will be those that can constantly reinvent themselves to match

changing customer needs and wants

committment to communication
24. : dynamic environment where information flows in both directions n a real-time basis

25. : SC partner believing an ongoing relationship with another is so important as to warrant maximum
committment to the relationship
efforts at maintaining it
compliance management
26. : consists of defining a nd implementing strategies to concentrate purchases with preferred suppliers, monitorin

& measuring compliance and identifying off-contract purchases to uncover lost savings opportunities, channel findings to mgmt for
remediation, monitor & report on key supplier performance metrics, audit supplier pricing to ensure accurate billing , monitor contract
expirations, execute renewals, drive continuous process & incremental cost savings improvements, establish baseline for new sourcing
initiatives
components of CRM strategy 
27. : product, price, placement, promotion

conduct joint quality planning

28. : step 4 certification process: suppliers must be awa re of certification process and measures

conduct measurements
29. : step 6 certification process: cost, quality, delivery, and other attributes like technical support and attitude

conduct pilot
30. : step 4 to implementing SRM strategy: be designed for a discreet portion of organization's activities

31. : step 9 to successful alliance: formally monitoring the health and trust of the relationship
conduct pulse checks
conduct quality impr ovement programs
32. : step 8 certification process: Conduct quality improvement plans - implement programs to brin

suppliers tha t didn't achieve certification up to desired certification standards

conformation rates
33. : data from each in spection or test is documented in system

content search mgmt

34. : engines provide access to info by content (product description or type) or parameter (how it is organized)

continuous replenishment model

35. : suppliers are notified daily of s ales or warehouse sh ipments and commit to replenish inventory witho

OOS a nd without receiving replenishment orders; turns are improved

contract deployment
36. : ensure a smooth transition to new suppliers and successful adoption across organizations; activities include

navigating legal to create new contract, communication with winning supplier, promoting benefits of new agreement to internal buyers,
loading new contracts into centralized contract mgmt database, implement order-to-payment procedures, training users and suppliers,
 validate supplier performance to measures & KPIs, deploying transaction mgmt system, auditing in voices for accuracy & compliance

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contract d etail requirements

37. : (1)pricing - price per unit; packag ing estimates, etc; (2) delivery requirements - dates, locations, and

conditions such a s h ow orders wil l be placed, how product is to be protected during shipment, and mode of transport; min or max order; (
transfer of ownership (incoterms) - determines which party manages freight a nd most likely price paid for goods; (4) payment terms -
address timing an d form of payment (currency exchange); (5) performance criteria - specifications of product attributes a re noted along w
 whi ch attributes are most important and why; (6) quality assurance - management process and performance standards the organization
has in place in order to assure quality; (7) order requirements - measurement of standard deliveries, quantities a company wants, and the
date due; (8) associated incentives and penalties - how an organization will provide business assistance and/or incentives to a supplier to
help them improve; (9) status reporting - cover provisions for communication in terms of frequency and types; (10) ch annels for resolving
problems - expectations and protocol for corrective actions to enable sw ift resolution and prevent recurrence; (11) security requirements -
safeguards tha t must be in place to prevent unauthorized access to proprietary data; (12) language of the contract - correct transla tion is
critical; (13) contract termination - process and terms for termination should be defined; (14) legal authority - organization's relationship
 with supplier may be influenced by laws, regulations, directives, and international treaties
controlling errors
38. : some organizations implement online compliance scanning and labeling control systems with suppliers that prevent

suppliers from printing out packaging labels a nd shipping goods unless they comply with the PO or release order rules; helps to minimize
of sh ipments that a re turned away a t the receiving dock or that arrive incomplete
cooperate & build partnership with supplier
39. : step 5 certification process: supplier is asked to commit to a process defined in formal

agreement; agreement describes certification parameters, methods, audits, process details, etc.
cost vs customer service
40. : reducing in ventories, mfg cos ts, an d transportation cos ts come at expense of customer service; direct ship is one

solution; central warehousing is another

create & use supplier quality ratings41. : step 9 certification process: organizations must ensure suppliers are maintaining levels of 
performance expected and taking corrective action if necessary 
create strategic plan
42. : step 3 integration s trategy: define clear process for mgmt review, feedback, team revision, a nd re-presentation;

implementation strategy that meets needs of all participants; must address how n etwork will be different across the SC, architecture neede
for internet features, how physical assets will be shared, and who is in charge of executing major changes needed
CRM strategies for sp ecific customer types
43. : key purpose of CRM is to allow a company to address various types of customers it serves a

different stages in their life cycle; marketing and customer care programs are developed based on customers' attitudes toward the company
and its w illingness to buy its products
CRM strategy for business-2-business customers
44. : strategy must include training of sales and service reps, with great attention paid to

profiling customer needs, a voiding problems, and analysis of account data to identify areas of improvement; 3 areas of expectations:
(1) complementary core competencies - rely heavily on expertise and reliability of their product or service providers because failure by 
provider puts business a t risk with its own customers; (2) know ledge of customers' business requirements - value provider's understandin
of how customer's business operates, limitations and concerns, h ow product fits into customers' business, & wha t requirements are part o
purchasing process; (3) continuous improvement - business customers value suggestions regarding economic opportunities, improvemen
and potential solutions to problems
CRM strategy for retail customers
45. : most important is bundle of services with product...in-store assistance, availability of web to do pre-

shopping or post-purchase customer service, product design; second w as product quality; third was price
CRM strategy for service-minded customers
46. : for those who value service, call center is h eart of business; point of differentiation is

technology; CRM all ows customer service rep to view detailed info about customer history as w ell as specific transaction during the call; c
see immediately if customer is high-value and escalate service process
CRM technologies
47. : technology is constantly changing so businesses must stay informed of emerging technologies in order to enhance

customer experience, increase profits, and stay ahead of competition

culture
48. : sha red system of values, beliefs, and a ttitudes that identify the members of a given culture and distinguish them from other culture

groups; affects our own actions and the way we perceive others; shapes many aspects of human contact, including give-and-take of 
negotiations, protocols, and other social and work conventions; is learned thru socialization; it is not a product of one's personality 
customer care technology enhancements
49. : web-enhanced customer service provides lots of solutions to increase customer expectations

the areas of response, product customization, convenience, order status visibility, and returns processing (FAQs , online customer service
reps, online chat rooms, more detailed product info online ca n reduce returns, telephone care ha ve queue options)
customer data warehouse (CDW)
50. : contains info about an organization's customers, products, and marketplace

customer relationship management (CRM)

51. : starts with an adjustment of philosophy in an organization - the shift to a customer focuse

 way of doing business - then moves to re-tooling all business processes that touch on the relationship with the customer; customer first, n
matter what; responding to change is the difference between winning and losing; if business fails to understand satisfying their customer
needs and wa nts id their primary mission , then the business will fail; a competitive survival s trategy; customers gain improved experience
 business gain improved customer visibility (increases in a bility to satisfy the customer, create lifetime customers, and realize potential pro
from each customer)
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customer-focused business
52. : (1) a re easy to do business with... anytime, anywh ere; (2) add value to their products and services, integratin

products and information s o that customers feel more educated during a nd after the decision -making process; (3) are in novative not only
their design of services and products but in their marketing, delivery, and customer care; (4) design a ll business con tact points from the
perspective of the customer; (5) share detailed insights about customers within organization or s upply chain
decline stage of PLC
53. : if product has brand loyalty, profits may be maintained longer, but declinin g production volumes and increased unit

costs, profits are drying up; customer care is critical and can promote lifetime customer development; service and replacements parts must
guaranteed

54. : step 1 certification process: w ho carries out each role; key players on team identified and tasks
define requirements, process, roles
documented
define SRM strategy 
55. : step 1 to implementing SRM strategy: organ ization must review the corporate, marketing, manufacturing, and sourc

strategies; must know goa ls, resources, l imitations before it can decide on suppliers
designate channel master
56. : step 1 integration strategy: capable of rallying support and driving implementation beyond preoccupation of 

improving internal competencies

develop cri teria & enroll partners
57. : step 2 to implementing SRM strategy: identify criteria to be used in selecting s uppliers who w ill becom

part of the strategic alliance; ability to pay and manag e cash flow directly impacts quality of service received
development stage of PLC
58. : incubation period; market research, product design, service definition, testing, and final ization are complete;

information g athered thru CRM can be used to identify ideas or concepts that could potentially meet customer's needs a nd increase profits
successful product design must be measured against profit goa ls and the product's ability to meet those customer expectations and improv
the competitive position; next is to gauge h ow s uccessful the product is in the marketplace; CRM can be used to test the product and its
promotional plan ag ains t KPIs such a s cost and profit goals, customer satisfaction measures, market penetration, or improved competitiv
position; by in volving key customers in the product or service development phas e, the business creates sense of partnership and mutual
investment that leads to lifetime customer
disconnected technology 
59. : non-interfacing databases house info; data not easily combined

distributor integration (DI)

60. : distributors are integrated using modern IT s o the expertise and i nventory located at one distributor is

availa ble to others; integrated for better inventory control a nd better customer service; distributors gain flexibility without having to carry 
excess stock; challenges to creating a DI include distributors doubting benefits of participation and some responsibilities may shift from
some distributors to ch osen few 
electronic busi ness systems backbone applicati on (EBS Backbone ERP)
61. : main purpose is to collect and provide repository for

internal database info in order to guide the purchase process; contains following key functions: (a) procurement history - past transaction
open PO status, a ctive supplier list; (b) accounting - order & price matching , invoice entry, payables, credit mgmt; (c) purchase planning -
future purchasing scheduled against anticipated demand; (d) performance measurement - reporting and performance measurements can
generated
encourage alliance
62. : step 6 to successful alliance: employee skills for resolving conflicts, negotiating, joint problem solving, and conducting

difficult conversations must be developed and taught to those in charge

engage in collaborative corporate mindset
63. : step 7 to successful alliance: must focus on joint goals and think in terms if alliance rather

than about the dominan t partner

enterprise marketing automation (EMA)
64. : software applications to search, compile, and use customer databases to target customers an

then generate a marketing campaign using e-mail, Web, telephone, and other technology to reach those customers; major components of
EMA: (a) promotions - giveaways, contests, discounting via web (no paper-based); (b) cross-selling and up-selling - offer alternatives to
generate interest; (c) marketing events - online newsletters, s eminars, webcasts (immediate); (d) customer retention - identify customer
most likely to bail & find possible i mpact of promotion efforts on that type of customer; (e) response mana gement - uses marketing
campaign info to determine impact of campaign by calculating actual customer profitability 
establish ground rules
65. : step 4 to successful alliance: develop guidelines, processes, and protocols for how partners will w ork together,

resolve conflict, and mutually manage the relationship

evaluate alternative suppliers
66. : step 2 certification process: suppliers a re screened

execute, evaluate, repeat

67. : step 4 integration s trategy: team must make critical adjustments based on ong oing evaluations as each part of 

network is put in place; remain flexible

external data networks
68. : collaboration within organization and across resellers, suppliers, and channel support partners; used for

promo/product bundling, financing, packaging design, merchandising, and transportation

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failling alliances
69. : (1) a lliances are processes tha t require continuous monitoring and attention; (2) immature technology, uncertain

marketplace, shifts in corporate strategy, external forces beyond control of a lliance partners; (3) ineffective management, inadequate
resources and staffing, and failure to honor commitments; (4) for an organization to have a successful offshore partnership, potential
suppliers must have business processes and efficiencies tha t complement the strategic goals of the organizations SC and must be able to
deliver on capabilities to customers
global expansion
70. : globalization of sourcing and manufacturing is making SC longer and more complex, requiring more formal coordinatio

and collaboration

global strategic alliance consid erations 71. : (1) cultural and language differences - global alliances; (2) multiple currencies & fluctuations
global sourcing; (3) different legal systems - different countries have different expectations a nd legal remedies for contracts; (4) security 
concerns - theft, competitive espionage, terrorism, trade secrets; (5) search for qualified partnerships - locating s upplier who is a good
match in terms of knowledge and experience as well as trustworthy requires due diligence; (6) business process concerns - product and
process concerns include quality, safety, and design; require strong integration and communication
growth stage of PLC
72. : time of rapid revenue growth; competition will increase; businesses must commit resources to s atisfy market needs a n

to gathering data for analysis in ongoing manner; production and inventory level must be managed to minimize OOS that could lead to
customers sw itching brands; customer care must be maintained; identify strong and weak customer segments
Hofstede's di mensions of culture
73. : (1) power distance: hi gh - mgrs tell employees wh at should be done; low - mgrs cons ult with employe

about what should be done; (2) individualism/collectivism: individualis t - tend to define themselves by their job; collectivist - relationsh ip
more important than job; (3) uncertainty avoidance: high - may need to gather more data a nd apply more structured decision-making
process to gain acceptance by people you're working with; low - overall workplace is characterized by tolerance and self-control, fewer rul
 written or unwritten; (4) masculine/feminine: masculine - emphasis on work over family; feminine - balance between work and family; (5
long-term/short-term: long-term - traditions may chan ge and adjust to times; short-term - traditions must be honored and not changed
implement full program
74. : step 5 to implementing SRM strategy: plans include regular planning /pulse-taking /problem-solving s essions

 with key suppliers

implementation challenges with CRM & SRM
75. : (1) macro-level or micro-level - both have technology piece (sharing information) and

human piece (new attitude and new skills); (2) reengineering org structures and redefining workforce roles (new business vision and
mission statement, new business organization, new job definitions); (3) creating virtual organizations (information no longer is
proprietary but is sh ared among s trategic partners for the benefit of each and for the benefit of the SC as a w hole; in tegrated processes mu
 be developed and adopted by all employees and implemented throughout all involved organizations; parts of virtual organi zation must
decide on and manage to degree of risk they are willing to undertake in the merged environment): (4) reexamining existing technologies
(systems must be more flexible, do more, and be capable of communicating with other partner's systems, cha nge an d loss of competitive
advantage may ca use org to leave behind outdated mgmt approaches and adopt more fluid, interactive IT tools that ca n leverage know ledg
and skills of teams made up of people from various points in the SC)
integrated SC network  76. : greatest benefit from fully integrated SC is when all participants sha re info and truly collaborate; key is

collaboration, not just info sharing

interfacing technology 
77. : various systems feed into each other, creating some capacity for integration

internally integrated technology 

78. : one main system captures and stores different data elements

introduction stage of PLC

79. : sales will be low until customer becomes aw are of product and its benefits; period of negative profits; new 

customers must also be supported to ensure high level of satisfaction with product and company 
inventory vs transportation costs
80. : truckload quantities take lon ger to deplete, increasing inventory storage cos ts; distribution control

systems combine forecasting and delivery schedule information to allow a materials man ager to transport goods from various warehouses
together, minimizing deliveries and transportation cos ts; decision s upport systems enable SC to find a suitable balance between
transportation and delivery costs by considering all aspects of SC
ISO
81. : a trusted partner in gl obal community for the development of globally relevant international s tandards; basic concepts: (1) voluntary - a

ISO standards are voluntary; may be market requirement; (2) market-driven - ISO develops standards where there is a market requirement
(3) cons ensus - ISO standards a re developed in response to market demand and are based on consens us among interested parties ensures
 widespread applicability; standards are reviewed at least every 5 years (may be maintained, updated, or withdrawn); (4) registration - aud
of an organization's implementation and con formance to ISO standards; registration requirements come from customer or government; (
generic management system standards - generic standards can be applied to any organization, large or small, and any product or service
any sector of activity; applicable to business enterprises, g overnment departments, or nong overnment public a dministrations

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keys to implementing CRM technology 

82. : (1) a thorough, w ell-thought out technology architecture needs to be determined in the beginnin

stages of the process; determine current level of technolog y and make plans to migrate to hig her one; (2) system should enhance efficienc
not sacrifice it - s hould make CRM tasks easier and faster; (3) implementation sh ould be coordinated throughout org - employees from ev
area on team; (4) everyone must know the extent to wh ich h e or she will use the system and must be trained accordingly - job processes
must be re-drawn to reflect CRM system; (5) technology implementation sh ould be measured against customer needs a nd expectations - is
customer ready for technology? Is it easy for customer to use? Does it meet customer expectations? Does it allow 
customization/personalization?
lead time vs transportation costs
83. : time committed to processing orders, procuring and mfg items, and transporting them; trans portation

costs a re lowest when high quantities are transported together, lead times are reduced when goods are transported as they are
manufactured; IT systems improve demand plan to help in tradeoff 
levels or amounts of conditionally accepted materials
84. : materials that don't conform to specs but are accepted thru material review 

process
lifetime customer
85. : (1) lower total marketing costs - as relationship develops, marketing and sales expenses decline; (2) learning

relationship is formed thru which companies build user profiles, track previous purchases, and anticipate trends; the longer one keeps a
customer, the g reater the chance to fulfill the customer's needs and deliver satisfaction; (3) offer increased revenue and profit opportunitie
as relationshi p matures, revenue from customer increases; a s revenue grows, cost of customer acquisition decreases and profit increases;
lifetime customers value convenience and stability over price;
lot size vs inventory 
86. : mfg wants large lot size to optimize process control and reduce per-unit setup costs, but creates h igh inventory levels

 warehouse and stores; IT can improve lead time required by mfg to react to needs of SC partners; IT can help retailers and distributors trac
goods throughout process; improved IT also gives retailers a nd distributors a better idea of process flow a nd mfg capabilities.. .increased
confidence level allow s retailers and distributors to reduce inventory held in an ticipation of mfg problems
loyal customer
87. : less vulnerable to loss and will therefore not incur the costs of a win-back program; CRM program offers loyal customers

increased sales opportunities thru cross -selling (complementary product) or up-selling (more profitable product); loyalty program design
considerations: (a) customer behavior - type of customer behavior company wants to increase; (b) targeting - how customers are segment
and are needs a ddressed thru loyalty programs; (c) positionin g - implications of loyalty program to other customer segments; (d) program
offer - wha t program consists of; (e) cost & benefit structure - long-term cost & benefits of each program; (f) communication - how 
customers are notified of loyalty program
manage multifaceted relationships
88. : step 8 to successful alliance: companies need organization-wide ability to identify, discuss, and tra

all relationships with a given partner and understand interactions

maturity stage of PLC
89. : most profitable; sa les continue to increase but at slower rate; competition leads to decrease in market sha re and/or

price; must continue to attract new customers; brand image is critical

member services
90. : creates personalized web s ites for partners

mergers & acquisi tions

91. : type of supplier relationship where suppliers are folded into purchasing entity; (1) proximity - own ership; (2)

 visibility - full sharing of goals , strategies, & tactics as internal, common knowledge; (3) interaction with competitors -none; (4)
communication - varies; (5) culture - one culture
mktg & sales technology enhancements
92. : helps identify the wan ts and needs of the customer, determine which customer segments the

 business can serve, and make decisions on a ppropriate mix of products to offer to segments; provides sales reps with access to order statu
customer history, and product and customer information
monitor & improve
93. : step 6 to implementing SRM strategy: implements framework of metrics to ensure suppliers are meeting PSA and

delivering desired impact on organization's bottom line and/or strategic goals

multi-enterpri se i ntegrated technology 
94. : multiple business lines within a large org share captured and stored data centrally, allowing

synergies to exist
negotiate win/win
95. : step 3 to successful alliance: must focus on future working relationship as well as immediate substance of negotiations

off-site delivery centers

96. : add value in application design, development, and mgmt; as well as model an d data mgmt; offer well-tested

methodologies, proven and reusable assets, a nd experienced people

ongoing relationship
97. : type of supplier relationsh ip where arms-length relationship involves repeated transactions with s ame suppliers

regulated thru medium-term contracts; (1) proximity - medium-term contracts; (2) visibility - some sharing of goals a nd tactics; (3)
interaction with competitors - some; (4) communication - designated contacts (account managers); (5) culture - awareness of culture
online procurement technologies
98. : spend analysis, procurement mgmt, contract mgmt; bring efficiencies but also costly 

online sales
99. : lower business costs and gathers important customer info (user profile, # of visits, na vigation preference)

operational phase
100. : CTM phase 3 defines process for executing customer orders; uses ag reed-upon standards, distribution methods, and

carrier assignments to translate orders into shipments

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order/provisioning system
101. : customer orders a nd interactions are logged and used to update profile; target customers with products and

offers that relate to customer's his tory 

outsourcing CRM
102. : (1) allows org l eaders to focus on core competencies; (2) if CRM is core competency, you can s ave org money, identify 

trends, anticipate problems, keep up with industry chang es, & are better equipped to capture & process the data; (3) will train customer
service reps in organization; (4) must have clear performance expectations - SLA updated annually; (5) measure agains t expectations at
regular intervals - continuous monitoring to measure agai nst metrics a nd adjust when n ecessary; (6) maintain ultimate responsibility for
CRM - org still responsi ble even if outsource day-to-day activities; (7) coordinate activities of multiple vendors and share experience and
knowledge; (8) maintain exit strategy 
partnership
103. : type of supplier relationship where length of relationship creates opportunity for increased understanding of each other's

organizations and increased efficiencies thru greater communication; (1) proximity - longer-term contracts; (2) visibility - full sharing of 
goals, strategies, & tactics; (3) interaction w ith competitors - limited; (4) communication - increased interaction; some trust; (5) culture -
awareness and adaptation to each other's culture
performance alerts
104. : automated alerts on areas of concern related to supplier operational performance

placement
105. : (1) traditionally refers to the way a product was s old - how it got into the hands of the customer (warehouse, retail outlets, direc

sales, catalog, internet); traditionally seen as one-way communication; (2) contact Channel Strategy - increase profitability by ensuring th
most cost-effective and customer-preferred channel is used and by securing lifetime customers thru effective customer care and customer
research activities; channel strategy cha racteristics: accessible, complete, secure and error-free, direct, convenient, fas t, flexible, profitabl
(3) implications to CRM - identical products may be distributed thru different channels because they match the communication and conta
preferences of different customer groups
plan for change106. : step 10 to successful alliance: partners must recognize and allow for inevitable changes (executive moves, organizational

restructuring, shifts in regulatory environment); partners must plan for positive changes that need to occur within the allia nce
prepare par tners
107. : step 3 to implementing SRM strategy: SRM management team negotiates a mutually beneficial Product & Service

 Agreement (PSA) with selected suppliers; includes communication a nd continuous improvement plan
price
108. : (1) a strategic decision, based on competition, perceived value, and brand identity; if market is highly competitive and the product ha

 become a commodity, price will be dictated by the competitive situation; (2) In CRM, price and product are tightly connected; it is one way
differentiate products for specific customer segments; (3) must be analyzed to ensure structure is attractive to customers but still profitable
the business
proactive strategic alliance considerations
109. : (1) a dd value to products - if alliance improves time to market, gets product in h ands of 

customers fas ter, or h elps ensure quality, it increases customer satisfaction, which leads to greater customer loyalty and more profitable
lifetime customer; organizations have realized benefits when involving suppliers at early stages such as design process (decline in

purchased material cos ts, increase in purchased material quality, decline in development time and cost and manufacturing cos ts, an d an
increase in technology l evels); strategy for mass customization will provide competitive advantage but requires delivery of customized goo
quickly and efficiently at a low cost; (2) enable strategic growth - alliances enable organizations to combine resources to overcome barrier
to entry and search for a nd develop new opportunities; (3) increase market access - partnerships that lead to better advertising or increase
access to new market channels can be beneficial; (4) strengthen operations - building alliances helps improve operations by lowering
system costs and using resources more effectively; (5) Increase organizational expertise - partnerships in which technology is shared can
add to skills base of both organizations; (6) Build organizational skills - strategic alliances provide an excellent opportunity for learning
 within the organization; organizations learn from one another; become more adaptable; (7) Enhance financia l strength - allia nces can
help improve overall financial position by increasing revenue while sharing administrative costs
product
110. : (1) in traditional marketing, it was static, perceived the same way by all customers; in CRM, it begins with customer need; (2) ma

 be designed to be customizable for specific segments to allow seller to add desired value and product differentiation to sustain or grow pro
 value-added products impact CRM: (a) must be designed to fulfill customer expectations and pose few challenges for customer use; extens
research and/or customer involvement' (b) must be manufactured or created to meet quality levels that satisfy customer expectations and
 business profit margins , (c) promotion & distribution must be customized as well to address the distinctive needs of a segmented audience
performance of the program must be tracked so that the it ca n be retooled for higher performance, (d) sales methods may need to be
customized and measured for effectiveness, (e) customer care personnel must also be familiar with each variation, i t's use, an d potential
problems
product life cycle (PLC)
111. : stages a new product goes thru from beginning to end: development, introduction, growth, maturity, decline

product variety vs inventory 

112. : product variety increases transportation and warehousing costs (higher mfg costs to make bigger variety o

products, smaller amts are transported to keep from impacting lead times, need more wa rehouse space for each variety, demand is more
difficult since each product competes for s ame customer); delayed differentiation is one solution - sh ip generic products out as far as
possible, a llowing varia tion to occur down the SC; produces more accurate demand plan, allowing reduced safety stock 
project complexity & scope collaboration
113. : projects involve large teams operating at different remote sites; information is more

important, in larger amounts and more difficult to manage tha n ever before

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promotion
114. : (1) traditional a ctivities are still valid in CRM, but the level of research, segmentation, and customization of the message or off

is deeper; with CRM, businesses can capture information about every interaction with customers, a llowing endless opportunity to study 
 buyer motivation and behaviors and to segment customers into groups with distinctive CRM programs; (2) customers are transferring the
loyalty away from products to the provider of the products; they give their business to these companies because they trust they will find the
products they are looking for and they will be taken care of if anything goes wrong; (3) businesses must keep in close contact with what
customers want a nd are buying so that they can continue to upgrade or customize products to meet those customer expectations; must also
ensure customer satisfaction; one fail ure is enough to undo brand image and drive the customer to the competitor
prosp ective customer
115. : CRM activities include market research, audience segmentation, and identifying righ t promo message and contac

channel for various s egments; as CRM develops, captured data can help sh ape future prospecting activities
quick response program (QRP)
116. : POS data is given to suppliers to synch ronize their production and inventory activities with sa les at

retailer
reevaluate and innovate
117. : step 5 integration strategy: once SC network is constructed, additional orga nizations and capabilities may need

 be transitioned into the network; ongoing grow th will require its own orga nization, strategy, and system of evaluation to succeed
roadblocks to implementing SRM & CRM
118. : (1) technological limitations: (a) technica l problems may result from infrastructure that nee

to be integrated but there's no standard for doing so, (b) getting appropriate employees access to most beneficial info in formats useful and
understandable, (c) systems are underpowered, overly complex, poorly designed, or just not right for job at ha nd; (2) participant resistanc
(a) organizations - fear conflicts of interest with SC partners; losing autonomy and sharing proprietary info; high cost of implementing ne
technology or size of venture, (b) customers - fear of getting lost in network; not know who to contact, (c) internal - la ck of trust in SC
partners to sh are internal info and data; open to receiving but not willing to give, (d) distributors - distributor integration (DI) is when l ar
pools of inventory are created throughout the distributor network - distributors don't like because don't believe in rewards of participation
fear of h aving to rely on other distributors, (e) suppliers - fear internet has reduce products to commodities w here price is more important
than quality or partnership; must bear cost of transa ction fees
sales force automation (SFA)
119. : electronic method to collect and a nalyze customer information from marketing and contact center

departments to provide opportunities for customer retention a nd acquisition and to enh ance marketplace relationsh ips: (a) contact
management - name, address, #, title, (b) account management - sales history; (s) ales process/activity management - sales process
methods developed to act as guide to sales activity management; (d) opportunity/pipeline mana gement - converts leads into sa les; (e)
quotation management - development of quotes for complex orders; (f) knowledge mana gement - access to sources of info that are housed
each organization and difficult to automate; policy han dbooks, forms and templates for contracts, competitor analysis
SCM collaboration
120. : (1) Information mgmt tools - software has automated many SC business processes, leaving cost reductions and

increased efficiencies; (2) Online applications - online technology has given cross-channel teams ability to interweave common and
specialized knowledge, making collaboration easier and more seamless; optimizes productivity; (3) Analytical applications - data
 warehousing and mining applications a llow info from one application to be used by other applications (a nd organiza tions); this goes
 beyond info sharing. ..enables info ana lysis a nd decision making
scorecards
121. : capture quantitative and qualitative data and provide historical, plan, and predictive views of supplier performance; s hould be

sent on a regular bas is; deficiencies shol d be addressed by supplier thru written corrective action plan
security 
122. : protect individual files so that confidential information cannot be accessed without prior validation

segmentation by customer needs

123. : specific product or service feature; preferred contact channels; customers search for best value, but va

doesn't mean price...could be convenience, trust in reliability, ease of return, etc. (value profile)
segmentation by customer value
124. : historically, all customers were treated the same, same level of service and charged the same fees for

products; today companies can treat customers differently depending on their contributions to the bottom line; greater customer value, bett
treatment the customer gets; ironically, a small % of customers (20% or less) provide the most significant % of revenue and profit; must
develop CRM strategies that (1) define 'valuable' customers - dominance, volume, profit?; (2) deliver timely, detailed info that will help

companies identify most valued customers - most commonly used feature or service, most rapid form of shipping?; (3) measure impact -
measuring segments in CRM?
segmentation by p referred channel
125. : technology h as provided more options and better service and lowered costs of doing business for

companies; some offer potential savings for those willing to use technology channels; a CRM strategy must consider how receptive
customers are to this type of contact point
select proper partners
126. : step 2 to successful alliance: look beyond strategic and financial fit; corporate culture, operating style, business

practices
select supp liers
127. : step 3 certification process: chooses s uppliers to certify (new or exis ting)

service channel technology 

128. : supports delivery of info, products, and s ervices to customers; web portals to access catalog, internet, pricing

configure order, email - self service functions

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sources of customer info

129. : transaction records - purchase frequency, volume, and how financed; sales reps - what customers are asking f

 wha t they're not interested in, concerns in making purchase, wh y are or are not considering competition; distribution points - customer
 values, purchas ing h abits and preferences; service reps - how products are currently being used and how they would like to use them;
purchased data - survey companies, database marketing companies, and service bureaus provide broad info a bout customer pool; may be
useful in acquiring n ew customers
SRM & buyer
130. : assumes more tactical role that manages supply, issues POs, tracks orders, resolves discrepancies in orders or accounts,

monitors performance of suppliers and is sues reports on timeliness, completion, and quality of work 

SRM & purchasing mgr 131. : more strategic role tha t identifies strategies to add value to product thru managing supplier relationship,
iIdentifies and researches strategic partners, develops certification s tandards and programs for improving s upplier performance, negotiat
long-term contracts, serve on cross-functional team to develop process to integrate workflow & sh are info, enforces compliance with
sourcing contracts, assemble and manage sourcing risk portfolio. manages relationship with strategic sourcing partners, analyzes
purchase data to report impact on corporate goals
SRM processing
132. : goal is to streamline procurement process for goods and services necessa ry to make products and run the organi zation;

may manage catalogs, requisitioning, RFQs, shopping tools, auctions, PO generation and tracking, logis tics
SRM services
133. : transforms services that were traditional ly used to execute procurement processes; offers a level of service features tha t inclu

online catalogs, special pricing, payment processing, after-sale support

strategic alliance considerations
134. : (1) strategic importance - if component is critical to product differentiation or involves proprietary 

knowledge, then make in-house; if ca n't or expertise outside core competency, then firm must form strategic alliance with valuable suppli
(2) # of suppliers - if only 1 supplier availa ble, then strategic alliance is w arranted to ensure availability; (3) complexity - more complex th
relationship between component and fina l product, the more value there will be in collaborative design; (4) uncertainty - if s ourcing
relationship has potential to jeopardize attaining business objective, the buying firm should develop close relationsh ip with s upplier; (5)
new relationship - if new supplier, relationship must be managed carefully 
strategic alliances
135. : (1) relations hip formed by 2 or more organization's that sha re information, participate in joint investments, and devel

linked and common processes to increas e performance of both companies; (2) goals for these relationships may include cost reduction,
quality improvement, better delivery performance, increased flexi bility, or new product introductions; alliances must be flexible and each
partner must bring value to the relationship; (3) different from joint venture; joint ventures agree to create new entity & then share in
revenues, expenses, and control; strategic alliances involves no equity stake by participants and is much less rigid arrangement; (4) when
searching for strategic alliance, one must consider the suppliers' competencies, their ability to deliver required services, product and servic
quality level, capacity for innovation, w illingness to collaborate, and most importantly their customer focus
strategic phase
136. : CTM phase 1 defines front-end agreement to collaborate and formalize period of time and scope of relationship; specify 

party to manage carrier and how gained benefits will be shared

strategic sourcing and business entities
137. : traditional purchasing never crosses boundaries that distinguish 2 business entities; strategi

sourcing allows opportunities for realignment and collaborative business processes, info flows, and workflows - can reduce # of PO's and
inventory costs; decreases bullwhip
strategic sourcing and collaboration
138. : traditional purchasing is transactional; strategic sourcing is collaborative - under SRM, compan

shares info with suppliers in real-time, cutting material costs, minimizing inventory, reducing shortages, & expediting deliveries; supplie
can participate in improving system, which leads to better product, higher customer satisfaction, and better customer retention
strategic sourcing and info sharing
139. : traditional purchasing benefits from technology but cannot implement technology to the same

degree as strategic sourcing can - use of internet & compatible software systems allow purchasers and suppliers to chare info and
synchronize supply and demand from any point in SC; benefits include reduced cycle time, increased inventory turns, and allowing
purchasers to focus on more strategic activities instead of low -value ones
strategic sourcing and purchasing
140. : traditional purchas ing focuses on purchase price; strategic sourcing focuses on true cost to the

customer - total cost of own ership (TCO) is considered (purchase price, transportation costs, duties, lead time, ICC); ultimate goal is to
control costs while providing goods throughout wide-reaching SC network 
strategic sourcing and visibility 
141. : traditional purchas ing does not increase the visibility of the entire SC the wa y strategic sourcing does

expanded info sh aring can lessen the bullwhip effect, provide early problem detection, fas ter response time, better contingency planning ,
and stronger relationsh ips because of increased trust
supplier co-location
142. : practice of locating one or more suppliers within a single location; primary benefit is highly integrated operations a

supplier can become integral part of business; allow s problems to be addressed quickly; reduced concept-to-customer time
supp lier performance measurement system
143. : tracks performance of broad portion of SC base, colla borates with suppliers on

performance measures, reporting, and improvements, automates key supplier performance measurement activities; and standardizes
supplier performance measurement procedures across the organization

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supplier rating system

144. : way to set supplier performance standards, measure performance against those standards, and take steps to

improve supplier performance (like certification), and a lso include data from SC information s ystems a nd occur more often to capture
ongoing performance levels; tool to measure and correct performance immediately 
supp lier relationship management (SRM)
145. : the way in which relationships w ith suppliers are developed and maintained to meet gene

goals of ens uring mutual profitability while meeting marketplace demands; may not apply to all suppliers, only thos e select who h ave bee
identified as key partners in the SC; stresses mutual profitability and meeting marketplace needs over individual profitability and individua
needs; finding and building ongoing relationships with those trading partners who account for the majority of an organization's
purchasing funds and who provide materials or services that are key elements in the final product or service; it is a methodology to structu
and support relationships with suppliers that will assist in:
(a) reducing procurement expenses and excess inventory; (b) support customer-focused business that delivers product customization in tim
frame; (c) improve processes in an on-going manner
surveys
146. : sent to SC managers in order to gather qualitative info on performance of suppliers; address overall performance, reliability, cost,

order accuracy, delivery/timeliness, quality, business relationshi p, personnel, customer support, responsiveness, etc.
tactical phase
147. : CTM phase 2 defines process flow; s hipping forecast is sha red so they can determine where and how the projected forecast

can be supported
time line performance
148. : tracks difference between PO schedule and a ctual receipt date and i dentifies pas t due, undelivered, an d

unauthorized deliveries
 virtual organization
149. : organizations cooperate based on mutual values a nd act as a si ngle entity to 3rd parties

 VMI
150. : vendors have access to customers' inventory data for items they supply and are responsible for maintaining inventory levels required b

customer; inventory levels at store or DC can gradually be reduced as lon g as OOS and SLAs are met
 voice of the customer
151. : actual customer descriptions in their words for functions a nd features customers want in products and services; us

 when it might not be easy to ask the right question; used to gauge after-sales service, order processing , billing, or delivery and new produc
design; ,ay help uncover unstated customer expectations or needs; should give voice to things a company wouldn't ordinarily hear
 vulnerable customer
152. : CRM data critical in early and accurate identification of vulnerable customers and in a nalyzin g the most effective

promotional retention programs; predictive churn model uses customer info to anticipate wh at groups and at w hat l evels customer attritio
may occur - target special promotions to keep those customers tha t still h ave value
 web processing
153. : technology must be able to handle large transactions and data communication volumes and support decision -making

applications; equipped to perform load balancing across multiple servers to ensure performance and high availabili ty of web-accessed
applications
 why CRM
154. : (1) today's customer is ha rder and more expensive to win and keep; (2) advances in technology and competition in a free

marketplace have benefited customers by raising expectations for quality, trouble-free products and services; (3) today's customer assumes
products will be of hig h quality, the competitive advantage is price or value; internet makes it easy to s hop price, so market expands from
neighborhood retailer to global marketplace or eag er sellers
 why SRM
155. : (1) consolidation has led to larger, but fewer customers that are better able to set terms that will low er their own costs; la rge

customers ha ve fewer suppliers to choose from and less flexibility in terms to negotiate; (2) pressure on price and profit margin ha s led to
greater integration of manufacturers with suppliers; (3) if product is a true commodity, SC must compete on price and availability and cost
effective performance will be crucial; a chieving and maintain ing that performance will require close integration a mong SC partners, from
planning thru order tracking and replenishment
 win-back customer
156. : communication should be made immediately within the 1st w eek after the customer has discontinued service; rapid

communication between different parts of the company is essential; automated CRM programs can trigger implementation of win-back 
programs as soon as customer relationship is terminated
 workflow 
157. : provides path for users to move thru the system and make purchases and payments; includes business rules definitions, workflow

engine, worklflow definitions

 workflow management systems
158. : provides framework for customer-focused activities such as customer service and order management;

automates procedures that pass along documents, info and tasks to other users

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