By CommenceCRM

How a Well-Managed CRM Becomes a Supply Chain Manager’s Key to Success

Supply chain diagram

From procurement to logistics to distribution, it seems as though supply chain management (SCM) is separated entirely from customer interactions. In reality, customer-driven demand is what propels supply chain operations forward. Supply chains and how they manage products can greatly benefit from customer relationship management (CRM) software.

So how can CRM help supply chain managers resolve issues and achieve success with the supply chain? CRM can be utilized to predict customer behavior. Using clear data from customer information, supply chain managers can make better decisions that respond directly to customer needs and demands. 

The Relationship Between Your Customers and the Supply Chain

Customers are one of the most critical parts of any supply chain. Without customers, even an enterprise with a well-established supply system will lose profit. A supply chain manager’s decision-making process is influenced by the values and opinions held by consumers so that they can have a satisfying relationship with your business.

Supply chain buyers need to procure resources from the most cost effective suppliers so they can offer the best value to clients. They’re always on the hunt for new partners who provide high quality products and services that suit customer tastes. A disaster-resilient supply chain is also a major goal for its managers to protect what customers value the most about your business.

The problem with incorporating customer demands into your supply chain is that customer expectations vary. A one-size-fits-all approach won’t work and your enterprise may end up permanently damaging customer satisfaction. A competitive company has to provide plenty of choices among its offerings for its end-consumers.

In order to build and maintain profitable, long-term relationships with clients, you have to keep track of all relevant information. This is how investing in CRM becomes an advantage.

Customer relationship management centers on paying close attention to your market and learning who your consumers are. Aside from managing sales and marketing automation, CRM systems are built to gather customer information: who they are, what they need, and how to reach out to them.

For example, you want to know when your customers are likely to purchase your goods so you can adjust your next shipment of raw materials. Through a CRM platform, you can send an email survey to your customers and keep all the data you receive in one database.

You can also utilize CRM technology to forecast future customer purchases or alert you if a client is planning to move to a rival company. The predictive analytics component of modern CRM platforms can even recommend actions that respond to upcoming trends. By extending your knowledge of the customer, CRM can help you bridge the supply chain directly with the market.

Common Problems Encountered by Supply Chain Management

Modern supply chains face many challenges due to changing consumer demands. Most enterprises employ inventory and supply management systems similar to CRM that help keep everything flowing smoothly. However, supply chain managers still encounter setbacks and problems that prevent them from satisfying customers. Some common problems include:

1. Increased cost

Supply chains become pressured with their profit margins as hidden costs suddenly appear in all areas of the supply network. Whether it’s the rising price of fuel to transport goods, higher labor costs, or increased commodity prices for natural resources, these costs can catch supply chain managers unaware and reducing them can lead to higher operational expenses.

2. Heightened customer expectations

Aside from pricing, customers also consider speed, quality, and excellent service all around. Most consumers have a wide range of choices of products across multiple channels so supply chains are pressured to outperform their competitors. Consumers want to have positive experiences while purchasing retail goods, while online shoppers expect fast delivery. There is also a rising preference for environmentally-sound and ethically-sourced goods among modern customers. Without enough data on what your market expects, you won’t be able to maximize your supply chain.

3. Various supply chain risks

The more products your business offers, the more complicated the supply chain becomes. Suppliers, manufacturers, logistics, and customers are spread across the globe over different time zones, requiring careful coordination and management. International complexities, economic pressures, trade disputes, and environmental changes also create risks that can snowball, disrupt your supply network, and prevent you from earning a profit.

With all these problems, every supply chain manager needs to anticipate future challenges and plan contingencies and innovations well ahead of time. Supply chain management would also need to monitor relevant data so each resource is allotted adequately.

3 Reasons Why You Should Link CRM with SCM

A well-managed CRM platform can go beyond serving your sales force, marketing team, and customer service reps. Linking CRM with supply chain processes can help you tap into rich insights about your market that will provide you competitive growth. By linking your supply chain with CRM technology, you can:

  • Keep track of ever-changing customer demands

When a customer makes their first purchase with your business, CRM can help you track their preferences: the franchises they visit, their buying patterns, and the products they demand the most. This CRM capability can offer valuable data on how much of which goods you need to send to a specific location. CRM systems can also inform you which suppliers are delivering the most important goods or services and how they are performing, based on customer feedback. Lastly, CRM can be a powerful tool which allows you to forecast customer behavior and which customers you can retain by analyzing their product sale history.

  • Refer to an updated, organized database

Data management won’t be valuable to anyone if the data is fudged or outdated. CRM software will allow companies to develop their customer experience by leveraging clean and complete real-time information. Through CRM, enterprises can easily compile and share significant data about their customers so that the supply chain can respond accordingly. For example, many customers don’t mind spending more money on a higher-quality product so suppliers and companies can work to find new resources that meet customer satisfaction.

  • Collect and store unique customer information 

There are many sources you can hear the “voice” of your customer from. Surveys, focus group discussions, interviews, complaint logs, field reports, and observations are among the tools you can use to understand all of your customer’s stated and unstated needs. However, many enterprises neglect to regularly collect feedback due to lack of time or manpower. CRM platforms can collect and store valuable customer data in one database with a lot less effort on your part. With CRM software, you would be able to listen to your customers and improve how you operate your supply chain.

Success Stories: Using CRM for an Effective Supply Chain

Integrating your supply chain with CRM is easier said than done. There are many factors, stakeholders, and complications to consider before undertaking such an endeavor. However, it’s not entirely impossible; several companies from all over the world have managed to pull it off successfully. Here are three success stories on how CRM can help improve your supply chain:

  • Dell: Multinational company Dell pioneered the concept of reaching out to customers directly through the phone or Internet to create customized computers that are specific to what the customer wants. With the integration of CRM into their supply chain, they were able to ensure that the necessary computer parts were available when needed so the goods are delivered on time. With direct customer interaction informing how their supplies move, Dell was able to expand their market growth through product innovations.
  • McDonald’s: Global fast food business McDonald’s exerted effort to establish CRM efforts through their app, improving customer service hotlines, and touch-screen ordering technology. All of the customer information generated through these touchpoints allowed McDonald regional planners to analyze past performance and predict future demands. Each restaurant is also equipped with an inventory management system that displays data about their resources and allows them to manage the regional menu items for sale.
  • Zara: Fashion brand Zara’s in-house production allows its supply chain to be flexible and competitive. When customers let store managers know what styles they like or dislike, the feedback is recorded in their CRM platform and Zara’s designers pay attention to the collected data. When their CRM reflects that a particular style is suddenly popular, Zara can easily put new, similar items into stores while the style is trendy. The integration of CRM and supply chain also prevents Zara from overstocking items, which allows them to maintain their image of exclusivity because their products rarely have to go on sale.

Boost Your Organization’s Supply Chain With Commence CRM

Commence is a cloud CRM solution perfectly equipped to handle supply chains and other business processes for small and mid-sized enterprises. With Commence, you can quickly enter and access consumer data from anywhere and at any time. Experience a hassle-free way of tracking customer interactions and keeping everything organized under one database. Contact us to try out a test drive of Commence today.