Edu-Link May 2008
How Effective Is Your CRM Strategy? Be Honest Now!
Effective customer relationship management requires much more than simply tracking buying behaviors. A truly effective CRM strategy requires you to get personal, to understand your customers' preferences and to ensure that these preferences are reflected in how you communicate with your customer, each and every time.
You may be saying to yourself, "Ah, but we're already doing that. We've consolidated our customer information. We've given our employees broad access to this information across our sales and service organizations. And we routinely segment our customer database to support targeted marketing communications."
Well then, you're off to a very promising start. But can you honestly say that you have an enterprise customer communications strategy that complements your CRM initiative and guides each and every customer communication?
Is Your Supply Chain Too Long?
Last summer, when The Boeing Co. announced it would delay the introduction of its 787 Dreamliner, CEO Jim McNerney blamed the problem on the company's supply chain. A large product like an airplane uses thousands of individual parts, but Boeing attempted to mitigate the smaller, individual supply chain quandary by using major suppliers to construct large pieces of the plane. Parts of the wings, for example, are being assembled as far away as Japan.
McNerney reported to the press that the delays were attributed to a "slowing up in the supply chain rather than a fatal flaw in the supply chain."
Boeing's problem with its supply chain is emblematic of a challenge all U.S. companies now face: managing supply chains that are longer and more convoluted than ever before. For any given product, raw materials can be sourced in Africa, refined in India, produced in China, assembled in Mexico and finally distributed in the U.S.
Today, however, the biggest problem--faced not only by manufacturers but also by service companies like restaurants--is the rising cost of the supply chain. This is not necessarily because of the manufacturing piece of the chain, which can be performed in low-wage countries such as China, but because of the rapid rise in transport costs.
Documenting Your Carbon Footprint Can Be Eye Opening
According to history, the Greek temple of Apollo at Delphi is reputed to have had two inscriptions above its door: "Know yourself" and "Nothing to excess." In many ways, the exercise in establishing, reporting and working to reduce a carbon footprint pays homage to both of these principles.
"For many companies, this is the first time they've considered what their emissions actually are," says Paul Dickinson, CEO of the Carbon Disclosure Project. "Collecting this information can be extremely informative and acts as the first step on the path to carbon management."
The process can often lead to results that are both highly enlightening and fairly counterintuitive, says Jim Stanway, director of project development at Wal-Mart Stores Inc. Although Wal-Mart has the world's largest truck fleet, Stanway recounts that the footprinting process "provided the company data showing the refrigerants used in grocery stores made up a larger percentage of the company's greenhouse gas footprint than the truck fleet."
Lose One Link--Just One--and Disaster Looms
Perhaps it's time to throw out the term, "supply chain." It contains an inherent flaw: One slip-up in the sequence of events--a break in the chain--brings the whole business-to-business system to a screeching halt. Manufacturers can't afford that.
Even the B2B platforms introduced in the 1990s, which use electronic data interchange as a standard method of communication, are similarly marred. Those networks are based on a link-to-link messaging model that requires integration with multiple ERP applications. Same problem: One broken link, and the system comes to a halt. And perhaps more important, somewhere along the line, a small supplier might still be using spreadsheets and faxing documents, making it cumbersome to include the information in the electronic loop.
Distributors, Get to Know Your Customers' Systems
Taking a "systems approach" to your customers' needs is something distributors can implement with their manufacturers--with mutually profitable results.
The metals industry, for example, has special rotating equipment needs that can offer your distributorship opportunities for increased business. The key is to take a systems approach--one that will strengthen your position as a strategic partner.
The systems approach stresses efficient use of plant machinery and assets. It calls for a deep understanding of application requirements and it underscores the total cost of ownership, rather than simply focusing on replacement parts and components. The strategy involves careful management of the supply pipeline and usually entails close collaboration among distributor, supplier and end user.
This approach is particularly well suited for the metals industry, where a prolonged period of consolidation has drained many companies of knowledge, experience and the human resources necessary to manage certain business processes. As a result, steel, aluminum and other metals producers are increasingly relying on their supply chain partners for key services, such as inventory control, asset management and preventive and predictive maintenance.
Distributors serving the metals industry with rotating equipment technology can often team with their suppliers to provide expertise covering the entire application. This can lessen the risk of shutdowns.
Managed Supply Chains Require Special Contracts
One of the most important differences between traditional supply management/supplier relations and managed supply chains is the emphasis on active collaboration among supply chain partners. Of course, the idea that suppliers and their customers may collaborate is not new--what is new is the elevation of collaboration from an informal, ad hoc process to a formal, actively managed process. As with any business relationship, a well-drafted contract can provide the blueprint for a successful strategic sourcing relationship. If suppliers and their customers believe that collaboration has become an essential part of their relationship, then contract managers should look for ways to incorporate those obligations to collaborate into the written agreement between the parties.
However, while there is no shortage of materials to help contract managers draft traditional sale-of-goods contracts, or even contracts governing the use of electronic data interchange between trading partners, it may be hard to find assistance drafting contract terms to govern the collaborative aspects of managed supply chains.
Suing Your Software Vendor? Not a Good Idea.
Sure, sometimes, software developers and vendors deserve to have the book thrown at them. Plenty of software implementations have taken too long, cost too much and never worked as advertised because a vendor's "vaporware" wasn't ready for prime time. But think twice before you head to court.
Green IT on Minds of CIOs, in a Big Way
Eco-friendly computing practices, collectively termed green IT, have gained significant CIO mindshare lately, thanks to the almost ubiquitous debate around enterprise carbon footprints and all things environmentally friendly. However, tighter regulatory measures and advances in technology are driving the renewed interest in green IT in firms' business strategies.
In an independent survey conducted by Datamonitor, over 75 percent of respondent firms considered eco-friendly computing as an important element in their IT strategy, while a further 15 percent rated it as their top IT priority. Furthermore, one in five firms has incorporated the green IT agenda into their business strategy, with a further third set to do so within the next two years.
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