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    SCM - A Unit-4

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    Neehasultana Shaik

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    of 31
    ply Chain Managemen!" ath Semester (SUP MBA Fot Cae 4.1.1. Introduction ‘A way to drawing conclusions from vague (unclear) informé i beings make decisions from approximate information. For example, one mie as very cold, 40 degrees as cold, 60 degrees as warm, 90 degrees 5 bot cannot specify the exact temperature that would separate the di temperature 2 relativity, What might be cold to one person, can be warm for another. converted into precise numbers for the computer to understand, as comput binary numbers (0 or 1). In such a situation, fuzzy logic is very usefl as ‘fuzzy logic’. Mostly, hum ‘nt consider 20 degrees Fahrenk degrees as very hot. But, o jones. This is the problem of “Thus, the vague information needs tobe tes can only interpret information i mation is known Fuzzy logic uses mathematical methods for interpreting subjective information. It assigns values 0 to 1, vague information with the higher value being closer to 1. For example, the value of 0.8 is assigned as “hot ‘After this, algorithms are constructed which are sets of rules ‘and processes. A fuzzy logic algorithm includes steps that relate variables having vague information. fo . Fuzzy logic and neural networks are integrated to make complicated and subjective concepts simpler, 50 that Tt has similarity with statistics. In statistics, 1e whereas the fuzzy logic’ defines, ied that can be executed with level of certainty. timate the likelihood of an outcom« rules may be appli nn the individual perception. the theory of probability can be used to es the data point while taking into consideratio \dustries like financial anal ‘cic. For example, washing machines determine themsel ‘h until water is clean, This is ensured by incorporatin rts analysis of information with In business, the concept of fuzzy logic has been used in a number of in pharmaceutical industries, metal cutting industries, how much water is to be taken and for how long to was fuzzy logic in its manufacture. In accounting and finance, fuzzy logic suppo subjective financial values. inties which characterise supply ‘According to Olzgu & Wong, fuzzy logic operation ean model the uncerta chain management; is easier to perform, and; more accommodating compared to the conventional approaches, data is large. Fuzzy logic technique has been applied by many. especially when the number of operated input researchers to measure supply chain performance, 4.1.2. Architecture of Fuzzy Logic Its architecture contains four parts: 1) "ute Base: It contains the set of rules and the IF-THEN conditions provided by th > Gecision making system, on the basis of linguistic information, Recent developments in fuzz ory decision rate methods forthe design and tuning of fuzzy controllers. Most ofthese developments the number of fuzzy rules. pl 2) Fuzzifleation: Ii used to convert inputs i. eisp numbers into fuzzy sets, Crispi : 4 . Crisp inputs are basically exact inputs measured by sensors and passed into the control system for i pressure, rpm's, etC. F processing, such as temp 4) Inference Engine: It determines the matching degree ofthe curent fuzzy input wi f i : é rules are to be fired according to the input field. Next era respect 0 on and decides which form the control actions. Scanned with CamScanner sgcent Tssuewin SCM (Unit 85 1) Defuzzifications Is used to convert the fuzzy sets obtained by inference engine into a crisp value, There ac sve -dfuziication meths availabe and the best sited one is used witha specific expert system to ree the error Input Inference Engine Figure 4.1: Fuzzy Logie Architecture 4.1.3. Fuzzy Logic and Supply Chain Management Performance Measurement stems Many atfempts have been made on supply chain performance measurement using conventional approaches. Most ofthese approaches have, to great extent contributed in performance measurement of a supply chain, but there ae sil rooms for improvement. Supply chain performance extent can be atributed as a function of hnulipleeriteria/attributes, Most of the criterionvatributes being intangible in nature; supply chain performance snpraisement relies on the subjective judgment of the decision-makers. Moreover, quantitative appraisement of Supply chain performance appears very difficult due to involvement of ill defined (vague) performance vheinures as well as metrics. Fuzzy logic is, however, not fuzzy. Basically, fuzzy logic is a precise logic of imprecision and approximate reasoning, More specifically, fuzzy logic may be viewed as an attempt af formalisation/mechanisation of two remarkable human capabilities. First, the capability to converse, reason and nal decisions in an environment of imprecision, uncertainty, incompleteness of information, formation, partiality of truth and partiality of possibility; in short, in an environment of imperfect to perform a wide variety of physical and mental tasks without any conflictin information, And second, the capabi rcastirements and any computations. Rate of Customer Complaints T Customer response time Lead Tie ‘On time Fuzzy Rules Pee Fuzzy Input Set Fuzzy Output Set isp Inputs | | Fil rate al ee Inference Luni ‘Accuracy System | Sas TefomameNereenst] | Es Supply Chain Management in| Linguisties Terms Poor, Fair | Crisp Output Prob, Out of stock and Good Performance Measurement Perfeet order fulfillment Figure 42: Fuzzy Logle and Supply Chain Management and Performance ‘Management Variables Source: (adapted from supply chain council, 2010) Scanned with CamScanner * th Semester (Supply Chain Management and Analyties) MBA Fount at Model c 413.1. Performance Measurement Variables as Crisp Inputs into Fuzzy Model | ta Pane anes can process crisp oreassal dane nek a cee WY onl In ode o enable machines hig pague language input such as ‘Somehow Satisfied’, the crisp input must be Seren tama See is el fuzzy components. Crisp sets are the sets that we have used most of our life. Ina crisp seb muerte member of the set or not. This sharp edged boundary work nicely for binary Ce eitina al crisp set valieiil does not work as nicely in describing the real world. Using natural language and tra into the fuzzy deci obtained using linguistic terms suet ag fat, go0d and excellent which ar introduced into the fuzy is making system. Universe of discourse i.e. the minimum & maximum value of very is or on tis ceed benchmarking information Provided by experts in the Supply Chain Management bast intuition and expert’s judgment, 4132, Fuzzification of Crisp Inputs A fuzzy process is 4 process of crisp-fuzzy- " y- Chan gis? variables, but the intermediate process isa fuzzy inference process. The ee aa change a crisp to a fuzzy variable is that, from the point of view of fuzzy control or a ae veck mi no absolutely crisp variable is existed in our real world. A fuzzy set allows a member to belong to a set to Partial degree. Any physical variable may contain some other components. Generally, fuzzification involves two processes: derive the membership functions for input and outpu variables and represent them with linguistic terms, The linguistic terms are identified using natural language, thought pees’ linguistic labels and traditional crisp set values, The permissiveness of fuzziness in the fact 0 thought process suggests that much of the logic benind ‘thought processing is not traditional two valued logig the conc nultivalued logic, but logic with fuzzy truths, Middle values for all the terms will be introduced and_ the concept of linguistic hedges will be used « lentify for each fuzzy linguistic variable such as very low, very high and so on. The inputs are converted into then theie quantification membership values of the using a membership function, This process is equivalent to converting or mapping classical set to fuzzy set to varying degrees, membership function defines the fuzzy set for the possible valves underneath of it on the horizontal axis, Fertical axis, on a scale of 0 to 1, provides the membership value of the height in the fuzzy set. Membership definition of a fuzzy set. The Shape of the membership funevon used defi decision on which type to use is dependent on the purpose, set are defuzzified into a crisp output. 4.1.4. Applications Areas of. Fuzzy Logic 1D_Itis used in the aerospace field for altitude contol of spacecraft and satellite, 2) Ithas used in the automotive system for speed contol, traffic contol, 3) tis used for decision making support systems and personal evaluation in the large company business. 4) Ithas application in chemical industry for controling the pH, drying, chemical distillation process. 5) Fuzzy logic are used in Natural language processing and Various intensive applications in . ficial Intelligence. plications in Amica ©) Fuzzy logic are extensively used in modem control systems such ag expert systems, ic ii i rks as it mimics h 7 7) Fuzzy Logic is used with Neural Networ ing into mors eet804 Would make decisions, only m faster. Itis done by Ageregation of data and changing into move Deaningfl dan Geeisions, only mus as Fuzzy sets. 'eful data by forming Partial tr Scanned with CamScanner C Recent Issues in SCM (Unit 4) 7 4.1.5. Advantages of Fuz; ry Logic System 1) The structure of Fuzzy Logie Systems is easy and understandable Fuzzy logic is widely used for commercial and practical purposes 3 4” 5) Fuzzy logic in AT helps you to control machines and consumer products Ttmay not offer accurate reasoning, but the only acceptable reasoning Fuzzy logic in Data Mining helps you to deal with the uncertainty in engineering 6) Mostly robust as no precise inputs required 7) Teean be programmed to in the situation when feedback sensor stops working Ik can easily be modified to improve or alter system performance 9) inexpensive sensors can be used which helps you to keep the overall system cost and complexity low 10) It provides a most effective solution to complex issues. 4.1.6. Disadvantages of Fuzzy Logic Systems vy Fuzzy logic is not always accurate, so the results are perceived based on assumption, so it may not be widely accepted. Fuzzy systems do not have the capability of machine learning as-well-as neural network type pattern recognition Validation and Verification of a fuzzy knowledge-based system needs extensive testing with hardware Setting exact, fuzzy rules and, membership functions is a difficult task Some fuzzy time logic is confused with probability theory and the terms. fe MANAGEMENT INFORMATION TECHNOLOGY (IT) IN SUPPLY CHAIN 4.2.1. Introduction The Information Technology basically deals with the use of computer science and technology in designing, developing, installing and implementing the information systems and related applications. The term IT involves the studying, designing, developing, implementing, supporting and management of the data made available through various sources in order to achieve the strategic goals. The Telecommunications technology is combined with the computin; Processing, storing, transmitting and producing the information as o voice, pictures, videos, words, numbers, sentences or graphs. IT is used in various fields like tclecommunications, software development, information systems, database management system, computer modelling, graphical and visual representation of the applications, if process for the purpose of obtaining, uuiput. The output may be in the form of In terms of SCM information is an inseparable part because it is the information on the basis of which the manager of supply chain makes the crucial decisions. Ifthe information is not accurate then the decisions Will cost to the organisation. IT provides various tools which ensure the accuracy of the information and then making the analysis accordingly. This will improve the decisions made by the manager regarding Supply chain. Information plays an important role in the SCM therefore managers must focus on. ite sources and analysis, Here, TT can be:a very useful tool for the managers of supply chain as it provides a tool through which the software and hardware are used, to collect, analyse, ears and a portion of brain Because it collects and perform accordingly. In SCM, the IT act as the eyes, i pean s¢ Mt collects (eyes and ears) and make analysi: ion of brai information to perform the work of decision making, i analysis (portion of brain) of the Scanned with CamScanner °° SREB ATUKH a ly Chain Management and Analytics MBA Founh Semester S00 42.2. R ize, Role of Computer/IT in SCM i “ IT plays a signiicant ote tne eld of Seve. wth he se fag ipreepenrnenete. fa Be inthe optimum uliston ofthe resources TT ineaaed wih Oe 3 implementation of the Process of SCM. IT performs following functional coe Role of Computer/IT in SCM. TansactonExesaton] [Cataborton nd Coordination [Decision Supra Figure 43: Role of Computer/IT in Supply Chaln Management 5 1) Transaction Execution: The most important aspect of the SCM is the transaction. IT helps in reduc} the time and cost involved in executing the transaction by fostering a smooth flow of informa between supply chain partners. Approximately two-third of the companies uses the IT in placing receiving orders. If e-mail is included in the TT then every company uses the IT in the $C Traditional EDIFACT and EXTRANET portals are the two major solutions that are mostly used alog with use of e-mails for carrying-out business transactions. There still exist some fields of companies in which manual methods like phone, fax is used. If seen practically then there exist company which is not using the IT for executing the transactions in one way or the other. It cannot neglected that IT has gained a significant importance in the SCM. Various sale and purchi transactions are performed by using IT. 2) Collaboration and Coordination: IT helps in maintaining the collaboration and coordination between Parties involved in the supply chain by sharing the accurate information. The information is transferred the companies between the parties of tier I and tier 2 of the supply chain with IT’ solutions and withou them as well. At least some information is given by more than half companies to their customers belongin to tier 1. From this information only a few are shared via IT channels. Same practices are adopted while information sharing with customers and suppliers of tier 1. And in the tier 2 information sharing is af execption and information technology channels are rarely used. 3) Decision Support: IT integrated with decision support system helps in advanced planning and scheduling (APS) and management of supply chain event management (SCEM). IT helps in collecting the data and this data is used by DSS in order to plan for different stages of the supply chain. DSS should take all th constraints into consideration while preparing the plan, 4.2.3. Process of Implementing an IT-Enabled SCM System 4 The supply chain management system involves various fiems o perform the work therefore, the systems is very complex and requires very much attention in performing the task. This must be done with proper planning a3 analysis. The steps involved in the process of implementing an IT-enabled SCM system are as follows: 1) Evaluating Organisational Requirements: The first step for implementing the IT enabled SCM System is fo evaluate the need and internal environment of the organisation. An analysis regarding the environment of the organisation must be made that whether the supply chain management will satisfy the need of the organisation and can be implemented with ease or not. Adopting ITT in the SCM tends 10 change the relationship of the organisation with suppliers and other parties and the personal touch is reduced to some extent. These all points should be kept in mind before implementing the IT in S There is a serious limitation of adopting the IT in SCM system that small suppliers and customers. cannot be contacted and the organisation may lose these customers. Proper SWOT analysis must BE made before implementing an IT-enabled SCM System. , “4 Afier making the SWOT analysis if the organisation seems that implementing an IT enable SCM. system would be beneficial then the implementation is managed by the IT department of the organisation. The course of action is decided by the IT department after interacting with the users functional area heads. The view of the employees regarding the implementation ox Tr sheald also considered during this analysis step. ld also Scanned with CamScanner geen Tes in SCM (Unit 2) Evaluating the External Environment: 3) 4) 9 9 is i iti ith regard to implementation of the IT cnblel SCM ts recived fom ihe mars of neal ovement thn evaluation of He Nt environment must be made. Extemal environment of the organisation includes the customers, supplicr, intermediaries etc. Firstly, a pilot project by taking few supply chain partners should be implemented. This selection must be made on the basis of time the parties want to continue the relationship with the organisation. Parties who want to continue a long-term relationship are most preferred. The parties that are selected must give their acceptance regarding such implementation, ‘The awareness and expert knowledge of the parties with whom such relations are to be established must also be considered as it w ease the process a8 well as beneficial for the organisation. ‘The technical resources of the parties should be compatible with the resources of the organisation in order to a successful implementation. After selecting the pilot project partners, the technology to be adopted should be decided. [Evaluating Organisational Requiremend q Evaluating the Extemal Environment y dentification of Infrastructure [Actual Implementation of the IT Syste Sealing pte Sytem ; 4 Resolve Implementation Isues Identification of IT Infrastructure: IT infrastructure facilitates in smooth functioning of the IT systems and applications, In identifying and selecting the best IT infrastructure, features like ~ reliability, quality, functionality of the hardware and software should be analysed. The selected IT infrastructure should be able to meet the requirement of the organisation itself as well as be compatible with the supply chain partner. Actual Implementation of the IT System: The IT infrastructure to be adopted may be either an in-house TT system or an outsourced IT system. There is also an option of purchasing an off-the shelf package available in the market. The working of SCM involves various partners so it is a very complex and time- consuming process. It will be wrong to say that the expertise and ability of the organisation will make the implementation to be successful because the organisation cannot work in vacuum, ‘The IT system adopted must be acceptable by the partners involved in the supply chain, Only then the implementation would be successful. While actual implementation of the IT system the systems that are already implemented in the related firms must be considered to make the compatibility with them. The organisation can offer incentives and concessions to encourage the partners to accept and adopt the system. System sealing up: The success of the pilot project will open the way to expand the system to the other partners of the supply chain, Gradually the partners in the pilot project are increased to cover whole of the supply chain members. The functions involved in the IT system can also be increased on the successful implementation of the previous application. For example, on the successful implementation of the e- procurement application iwith the partners the organisation can extend the function by adding the electronic Payments to the system. Resolve Implementation Issues: There may arise various issues while implementation and that must be resolved. The main issue is the selection of method of implementation. The methods of implementation include module-by-module and system-wide implementation. The module-by-module deals with the implementation of the certain modules before others, Q t ae Scanned with CamScanner 4.2.4, With the di Some of su 1) Electronic Data Interchan; organisation with the help mails, couriers, fax or post using the electronic media, business documents. Capabi efficient use of the compute members to share the information by their own will and ut EDI is used as a linking phenomenon as it links the mem! respect of order processing, production, the materials, EDI deals with the exchan, known as transaction sets. The messay invoices, shipping notices sending the transaction sets that enables the computer of one or; 2) Internet Technologies: Internet technology is making its helps i main advantages of using the internet technologies are implemented and maintained. These advantages facilitat and maintaining the collaboration and cooperation among the members. Some of the widely used internet technologies in the field of SCM are given below: 3 id ii) re ‘ MBA Fourth Semester (Supply Chain Management and Analytics), ae oa ta olved in such implementation is very less and the ed ged ea ter tho OF Litt is invested in system-wide implementation, Module-by-mod fori Sn Som Set Sieleanell- tepteatigien teases modale-by-module implementation is p Over system wide implementation as it keeps the ‘company at par with its competitors. IT Solutions for SCM sc fete rgPment inthe IT sector various alternatives solutions are available in order to manage the ScM ich IT solutions are given as under: TT Solutions for SCM [Electronic Data Interchange (EDD Tnternet Technologies Enterprise Resource Planning = (ERP) 7 Data Mining/Data Warehousing and Data Mart ‘Supply Chain Management Software 'ge (EDD: This deals with the exchange of business documents in of computers. The traditional methods of exchanging the information are now being advanced to modern methods. Now such exchange is done EDI deals with the capability as well as the practice of transferring th ility here refers to the ability of the supply chain members to make ¥ for communicating and practice refers to the ability of the supply chain, ise the information so received. In SCM, bers of the supply chain management in inventory, accounting, transporting, purchasing and arranging ize of business documents between the organisations in a form that can b machine. It sends the message in the form of standardised electronic mes: ge that are sent may be the requests for quotations, purchase o and other standard business correspondence documents. EDI facilitates portant place in the field of SCM. Intemet ween the members of the supply chain, that it is cost efficient, and can be easi automating the operations of the supply chain making a wide network area for communication bet Intranel/Extranet: An intranet isthe network in which the employees within the organisation create, communicate and perform the work whereas an extranet is network in which ge specific vendors, Suppliers or customers can participate in the intranet. These specific permet . the intranet services, This access to the internal network helps in rea tine wegen oe improves work efficiency as well. 4 E-Business: The business done via electronic mode is known as E-Business, E-business j performed withthe Relp of tlecommunications. Fw of infomnaion, pola cong supply chain transactions that are included in the e-business E-busheere can execute the foll transactions: yo 8) The information about the product like time, ualty and quanty can be Pe rie the supply chain. : smbers b) Orders can be placed with the suppliers. Scanned with CamScanner svc es in SCM (Unit 91 ) The customers rs can place and communicate the orders within less time. a) The customers can track the status of the placed orders. ©) The quantity of inventory available can be checked and monitored, . 1) Any changes in the product design can be rapidly communicated, 2) The orders placed can be delivered to the customers, hh) Payments can be received from the customers. 3) Enterprise Resource Planning (ERP): The concept of material resource planning. is concept behind enterprise resource planning, ERP is a system that is integrated with the other applications in order to automate the business practices that are related tothe operations or production. ERP can be used with other epartments of the business as well. ‘ ERP integrates various business practices into one single suit. The information from each functional area is collected and used as a whole to derive at some conclusions. 4) Data Mining/Data Warehousing and Data Marts: The increasing importance of storing the data tends to make analysis for the need of storing such data. Earlier such data was used only for finding answers to the common questions but now the time has changed and the data is used for various other meaningful purposes. Data mining helps in identifying the patterns and relationships on the basis of the data. It will result in following: i) Association, or finding the correlation of one event with the other, ii) Sequence, or identifying which event occurred on former time and which one occurred on later time, iii) Classifying, or dividing the data on the basis of some patterns, ), Clustering, or identifying the facts which were earlier unknown, ¥) Forecasting, or making estimations of the future on the basis of the pattern identified. The data warehouse is so popular because it leads to efficient data mining. The main aim of designing data warehouse is to store the data and retrieve it as and when needed, Information from all past of the enterprise and different sources is stored in the data warehouse ‘The information in the data warehouse is a precise form of enterprise-wide information and the information used by top and middle level management, The data mart consists of the department or division-wide information, The data mart is cheaper and easy to operate as compared to that of the data warehouse. However, it has a serious limitation of | becoming isolated. 5) Supply Chain Management Software: The SCM software enables to perform the online transactions including placing the orders, sorting out the queries of the customer related to supply immediately. The Companies are moving towards creating the accessible, comprehensive, efficient and flexible processes in the supply chain so that inventory management and production can be done efficiently. Supply chain management software can be classified into following two categories: i) ’Supply Chain Planning (SCP) Software: It deals withthe planning of the supply chain process by 1 the power of computing and IT with the help of ERP. ii) Supply Chain Execution (SCE) Software: The term execution refers to the process of implementing the decisions as per the instructions. SCE software helps in the movement ofthe inventory between the ‘members as per the predetermined rules. EWEN oye e is teem Sh Codd) 43.1. Meaning and Definition of CRM The mult-dimensional process through which the organisations gain knowledge about the needs, wants, desires and buying patterns of their customers by establishing a two-way communication with them with the use of information technologies, is known as Customer Relationship Management (CRM). Scanned with CamScanner * MBA Fourth Semester Supply Chain Management and Analyjc, ; a moot Ssxeloping a business philosophy and sever strategies, SYS aod pon ae ionships womets and: bul ralty, It function! ne toa nas whiter come can nea nse ole PAY kg the main ree is not same, Thus, creating loyal customers who : According to Gartner, Satisfaction”, : According to PWC Consulting, “CRM is a business strategy that aims to understand/apprecite, Personalise the needs of an organisation's current and potential customers". According to Parvatiyar and Sheth, “CRM is a competitive strategy and process of aeauiing, Partnering with selective customers to ereate superior value for the company and the customer’, CRM can be divided into three main components: ee i f 1) Customer: It is important to recognise and manage customers for an organisation as its profit and solely depends on customers. Information technologies play a very important role here. a 2) Relationship: Uninterrupted bi-directional communication between the organisation and its builds the relationship between them. This relationship can take any form such as continuous of Tepetitive or one-time, and short-term or long-term. ‘g 3) Management: CRM is a management function that should be considered not only in marketing depart but in the whole corporate culture, departments, and activities. A broad change in the procedi functions of the organisation and employee attitude is required for CRM. CRM is a new phase of marketing industry which drives the philosophy of information technology enibl relationship marketing. There is an emerging need for CRM in the current marketing scenario as it is with several IT tools such as MS Access, Spreadsheets, Data warehouses, MIS, SMS, Fax, E-mails, Telephone. | Loyalty cards, ATMs, etc. These tools help in developing customer loyalty thus profitability of the organisation | by improving customer service processes within the organisation with the help of improved analysis of te | processed customer data. | Process of Relationship Management + IT = CRM . Hence, CRM inculeates all the IT tools and techniques essential for maintaining relationships with cist 4.3.2. Characteristics of CRM. Characteristics of CRM are as follows: a 1) Share of Customer: Historically, marketers have measured success in a product category by their market. For example, if there are 100 million pairs of athletic shoes sold each year, a firm that million of them has a 10 per cent market share. I the shoemaker's marketing objective is to increase share, it may lower the price of its shoes, increase its advertising, or offer customers a free baskelb every pair of shoes purchased. 2) Lifetime Value of the Customer: With CRM, a customer’s lifetime value is identified and is the & fot an individual transaction. It just makes sense tat a firm's profitability and long-term succes ae to be far greater if it develops long-term relatonships with its customers to ensure epeatpurcse®, equity. Scanned with CamScanner Recent Issues in SCM (Unit 4) 8 4) Greater Focus on High-Value Customers: Using a CRM approach, customers must be prioritised and communication customised accordingly. For example, any banker will tell that not all customers are equal—when it comes to profitability, So, some banks (about one out of every eight at this point) now uss CRM systems to generate a profile of each customer based on factors such as value, risk, attrition, and interest in buying new financial products, 4 CRM Systems A Customer Relationship Management (CRM) s ‘management, sales management, and productivity. tem is a customer database which helps with contact Customer Relationship Management (CRM) System is a suite of pre-engineered, ready-to- implement, integrated application modules that focus on automating and optimising all customer-centric and customer responsive functions ~ sales, marketing, service, and support-of an enterprise and possessing the flexibility for configuring, customising, and personalising dynamically the delivered functionality of the package, through any channel of interaction, to suit even the specific requirements of an individual customer. CRM enables an enterprise to operate as a relationship-based, information-driven, integrated, enterprise-wide, process-oriented, real-time, and intelligent customer-centric and customer-responsive enterprise. The primary goal of CRM systems is to integrate and automate sales, marketing, and customer support. Without a robust CRM system, customer details and interactions can get lost, calls are not followed up promptly and prioritising customers can be a matter of guesswork, As the customer has become more connected, the focus on ‘customer relationship management’ has transitioned and also become a strategy to customer engagement. Following are the various types of CRM systems: 1) Operational CRM: An operational CRM deals with the automation, improvement and enhancement of various customer-centric processes (customer-facing or customer support) in the business. In operational CRM, numerous interconnected delivery channels are used in business for automation of horizontally linked processes like front office touch points for customers (customer service, sales, marketing, etc.). Italso involves the integration of front office and back office. Organisations having direct interaction with their customers implement operational CRM for automated support of their business. In this, personal preferences of customers and their interactions with the organisations are recorded and used by several departments in order to generate customer information. Operational CRM is focused towards supporting customer-facing processes like point of sale, phone interactions, direct mails, online communications, etc., by providing product and customer’ related transaction data. The operational CRM is the first component which is implemented within a CRM strategy as it directly influences the customers. 2) Analytical CRM: The analytical CRM deals with automation and improvement of different back-office operations and analysis functional in an organisation. It controls all the processes and operations that are indirectly connected to the customers. Thus, the analytical CRM differs from the operational CRM. In operational CRM, horizontally linked processes like front office touch points for customers (customer service, sales, marketing, etc.) are automated to generate customer information. Whereas, analytical CRM is focused towards exploring the intentions of the customers (by thoroughly analysing the customer related information) to be used by the organisation. Analytical CRM highlights the significant patterns and predictions of the customer data (provided by operational CRM systems), thus, supports and improves the functional operations and decision-making ability of the concemed organisation. Analytical applications influencing databases more often exhibit analytical CRM, as data warehouses and analytical CRM are closely attached to each other.. Analytical CRM is involved in finding opportunities, supervising business performance and, enhancing customer interactions, through producing and interpreting operational data. Scanned with CamScanner . MBA Fourth Semester (Supply Chain Management and Analytics) INTy, Ans Rature of consumer behaviour required for applying intellectual peso analytical CRM, A series of steps is involved in analytical CRM, i.¢.. ort tool for teat Plane: interpreting, and reporting of customer data. Analytical CRM acts as support tool for state Finer Of the organisation and produeUmarket group, key accounts, promotional Campaigns, et. se different data sources for it 3) Collaborative CRM: Coltaborative CRM is focused towards refering the customers an organised ; reliable way by integrating and coordinating the communication channels (phone, fax, e-mail, web, and customer interactions. sa nalisation is also described by collecting, storing, extracting ‘The concept of collaborative CRM not only encompasses enhancing the customer interactions but als inculcates enhancing customer retention as well as freedom. Different departments (marketing, fins sevice, sales, etc.) of the organisation are covered under collaborative CRM. In order to develop effective understanding of the customer, customer information is shared among these departments 6 collaborative CRM. : For example, marketing department of an organisation is provided with information about prefere Products by customers, which is analysed to offer preferred products to customers, Finance department Provided with information about different prices of a particular product experienced by customers, Th s, information is analysed by designing different strategies to comparatively study the product with other Products in the market so as to launch a new product which is efficient and reasonable. Similarly, th service department is provided with information about desired service(s) by customers that are not yet available with the organisation. This information is analysed in order to introduce required service(s)) the organisation. Therefore, the needs are effectively automated with minimum time consumed, 4.3.4. Importance of CRM ‘The major advantages of CRM in the business processes are explained below: —temerteie, Tamed Slee Rereametand Tncesed Conner Susfacton Tower Cost ofReenitiog |_| [tensed Guster Renton aa — ae valuaon of isomer Proiabiliy