Chapter 11 - Customer Relationship Management and Supply Chain Management Flashcards

1
Q

What is customer relationships management?

A

A customer focused and customer driven organizational strategy that concentrates on addressing customers requirements for products and services, and then providing high quality responsive services.

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2
Q

What are the two basic elements of a successful CRM?

A
  1. The company must identify the many types of customer touch points
  2. It needs to consolidate data about each customer.
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3
Q

What is customer churn? What is the optimal result of a CRM effort?

A

Over time, all organizations inevitably lose a certain percentage of customers. To maximize the number of high value repeat customers, while minimizing customer churn.

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4
Q

What is an organizations overall goal?

A

Shift from conducting business transactions to managing customer relationships. Maximize the life time value of a customer, which is that customers potential revenue stream over a number of years.

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5
Q

Why is customer relationships management so important?

A

Organizations recognize that customers are at the centre of a successful enterprise, and to be successful they must focus on them.

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6
Q

What is a touch point?

A

Any interaction between a customer and an organization.

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7
Q

What are examples of traditional customer touch points?

A
  1. Telephone contact
  2. Direct mailing
  3. Actual physical interactions
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8
Q

What are examples of new customer touch points?

A
  1. Email
  2. Websites
  3. Communications through the smart phone.
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9
Q

What is market capitalization

A

The number of shares of the company’s stock outstanding multiplied by the price per share of the stock.

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10
Q

What is a low end CRM system?

A

CRM systems designed for enterprises with many small customers

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11
Q

What is a high end CRM system?

A

CRM systems designed for enterprises with few very large customers.

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12
Q

What type of system does Amazon use?

A

Low end system, to recommend products to returning customers.

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13
Q

What type of system does Bently Use?

A

High end system, to increase lead generation and enhance the brand experience for customers.

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14
Q

What are organizational CRM systems?

A

The component of CRM that supports front office business processes that directly interact with customers

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15
Q

What are front office processes?

A

Those processes that directly interact with customer. Like sales, marketing, and services.

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16
Q

What are the two major components of operational CRM?

A
  1. Customer facing applications.
  2. Customer touching applications.
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17
Q

What are the benefits of an organizational CRM system?

A
  1. Efficient, personalized marketing, sales, and service.
  2. A 360 degree view of each customer.
  3. The ability for sales and service employees to access a complete history of a customers interactions with the organization, regardless of the touch point.
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18
Q

What objectives are CRM tools used to reach?

A
  1. Improve sales and account management by optimizing the information shared by multiple employees and streamlining existing processes.
  2. Form individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits.
  3. Identify the most profitable customers and given them the highest level of service.
  4. Provide employees with the information and processes necessary to know their customers.
  5. Understand and identify customer needs, and effectively build relationships among the company, its customer based, and its distribution partners.
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19
Q

What are customer facing CRM applications?

A

Areas in which customers directly interact with the organization, including customer service and support, sales force automation, marketing, and campaign management.

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20
Q

What are customer interaction centres (CIC)

A

A CRM operation in which organizational representatives use multiple communication channels to interact with customers in functions such as inbound tele service and outbound telesales.

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21
Q

What is a call centre?

A

A centralized office set up to receive and transmit a large volume of requests by telephone.

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22
Q

What are customer touching CRM applications/ electric CRM?

A

Applications and technologies with which customers interact and typically help themselves.

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23
Q

What is sales force automation?

A

The component of an operational CRM system that automatically records all the aspects of a sales transaction process.

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24
Q

What is a contact management system?

A

Tracks all communications between the company and customers, the purpose of each communication, and any necessary follow ups.

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25
Q

What does contact management systems eliminate?

A

Duplicated contacts and redundancy, which in turn reduces the risk of irritating the customer.

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26
Q

What is a sales lead tracking system?

A

Lists potential customers or customers who have purchased related products. Products similar to those that the sales person is trying to sell to the customer.

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27
Q

What is a sales forecasting system?

A

Mathematical technique for estimating future sales.

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28
Q

What is a product knowledge system?

A

Comprehensive source of information regarding products and services.

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29
Q

What are configurators?

A

Enable customer to model a product to meet their specific needs.

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30
Q

What is data mining?

A

The process of sifting through volumes of customer data

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31
Q

What is a purchasing profile?

A

A snap shot of a customers buying habits that may lead to additional sales through cross selling, upselling, and bundling.

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32
Q

What is cross-selling

A

The marketing of additional related products to customers based on a previous purchase. If you have a checking accounts, banks will get you to open a GIC.

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33
Q

What is up-selling

A

A strategy in which the sales person provides customers with the opportunity to purchase related products or services of greater value in place of, or along with, the customers initial product or service selection.

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34
Q

What is bundling?

A

A form of cross selling in which a business sells a group of products or services together at a lower price than their combined individual prices.

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35
Q

What are campaign management applications?

A

Helps organizations plan campaigns that send the right message to the right people through the right channel.

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36
Q

What are loyalty programs?

A

Programs that offer rewards to customers to influence future behaviour.

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37
Q

What are analytical CRM systems?

A

CRM systems that analyzes customer behaviour and perceptions in order to provide actionable business intelligence.

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38
Q

What is the purpose of analytical CRM systems?

A
  1. Design and execute targeted marketing campaigns.
  2. Increase customer acquisitions, cross selling, and up selling.
  3. Providing input into decisions relating to products and services.
  4. Providing financial forecasting and customer profitability analysis.
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39
Q

What is an example of an analytical CRM technology?

A
  1. Data mining
  2. Decision support
  3. Business Intelligence
  4. Online Transaction Processing Systems.
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40
Q

What are the different customer touching applications?

A
  1. Search and comparison capabilities
  2. Technical and other information and services
  3. Customized products and services
  4. Personalized Web Pages
  5. FAQ’s
  6. Email and Automated Responses
  7. Loyalty Programs
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41
Q

Describe the search and comparison capabilities

A

It is difficult for customers to find exactly what they want from a vast array of products and services on the web. Companies provides customers with search and comparison capabilities to find exactly what they are looking for.

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42
Q

Describe the technical and other information and services

A

Organizations offer personalized experiences to induce customers to make purchases and remain loyal. Allows customers to download product manuals.

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43
Q

Describe the customized products and services

A

Mass customization where customers can configure their own products. Like how Dell allows the customers to configure their own computer systems, Melanie Lynn allows customers to mix and match, and Indochino enables customers to fully customize clothing items.

You are also able to check account balances or shipping status of orders any time and from any device.

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44
Q

What are personalized web pages

A

The customers can design the webpage however they want, and to record purchases and preferences, as well as problems and requests.

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45
Q

What are FAQ’s?

A

Simple tool for answering repetitive customer queries. They can find information without having to interact with another person.

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46
Q

What are email and automated responses?

A

Popular tool for customer service. It is cheap fast, and they can answer questions, disseminate information, alerts, and surveys.

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47
Q

What are examples of channels used by CIC?

A

Telephone, web, face to face, fax

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48
Q

What is omnichannel marketing?

A

An approach to customers that creates a seamless experience regardless of channel used to touch the business.

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49
Q

True or False: Customer relationships management is not a technology or a process, but rather it is a customer centric way of thinking

A

True

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50
Q

What is one of the biggest issues with managing relationships?

A

The lack of time or information.

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51
Q

Describe the CRM process

A
  1. Marketing efforts, where we solicit prospects from a target population of potential customers..
  2. A certain number of these prospects will make a purchase and become a customer.
  3. A certain number of these customers will become repeat customers.
  4. The company will segment the customers into high and low value repeat customers
  5. The company will maximize the lifetime value of a customer.
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52
Q

What is the simple concept that CRM follows?

A

Treat different customers differently because their needs differ and their value to the company also differs.

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53
Q

What is the result of a successful CRM?

A
  1. Improve customer satisfaction.
  2. Make the company’s sales and services employees more productive.
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54
Q

What is a CRM system?

A

Information system designed to support an organizations CRM strategy. To have good customer relationships we must have good CRM systems.

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55
Q

What are examples of customer touch points

A
  1. Call centre
  2. Email
  3. Direct Mail.
  4. Web.
  5. Smartphone
  6. Service Center
  7. Computer.
  8. Sales Rep
  9. Field Service technician.
  10. Physical store
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56
Q

What is a collaborative CRM system?

A

A method of data consolidation. A CRM system in which communications between the organization and its customers are integrated across all aspects of marketing, sales, and customer support processes.

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57
Q

What is customer identity management?

A

A marketing technology intended to complete a 360 degree view of a customer across an organization.

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58
Q

What are five other types of CRM systems?

A
  1. Open
  2. Mobile
  3. Social
  4. Real Time
  5. On Demand
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59
Q

Describe the history of the implementation of the CRM systems

A

There is the ability of both the on premise and on demand implementation. On premise meant that they purchased the system from the vendor and installed it onto their systems. These were expensive, inefficient, and time consuming and could not be justified by both the customers who purchased them.

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60
Q

What is an on demand system?

A

A CRM system that is hosted by an external vendor on the external vendors systems.

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61
Q

What are the benefits of the on demand CRM system?

A

Spares organizations the heavy burden costs of on premise decisions.

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62
Q

What is an example of an on-demand CRM vendor? What do they do.

A

Sales force. They keep the customer relationships between Telus and the clients of Telus. Salesforce representatives go around and sign clients up, allowing them to complete key parts of the sales process while they are on the road.

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63
Q

How has the CRM system helped Durabuilt Windows and Doors Company?

A

Durabuilt uses the CRM to allows the sales and services teams to access shared customer data allowing them to have a 360 view of their profiles, history, and orders. It allows them to hit key performance indicators. They are also able to immediately respond to the needs of their consumers.

64
Q

What are the disadvantages of an on-demand CRM system?

A
  1. The vendor can be unreliable, meaning the company will have no functionality of a CRM system.
  2. Hosted software is difficult or impossible to modify, only the vendor can upgrade it.
  3. Vendor hosted CRM may be difficult to integrate with the organizations existing software.
  4. Providing strategic customer data can pose security and privacy risks.
65
Q

What is a mobile CRM system?

A
  1. An interactive CRM system in which communications related to sales, marketing, and customer service activities are conducted through a mobile medium.
66
Q

What is the purpose of the mobile CRM system?

A

To build and maintain customer relationships between an organization and its customers.

67
Q

Describe the benefits of the mobile CRM system.

A
  1. They involve directly interacting with the consumer through mobile devices.
  2. Creates personalized customer relationships that can be accessed anywhere and anytime.
68
Q

What is an open source CRM system?

A

CRM software whose source code is available to developers and users at no charge

69
Q

True or False: Open source CRM systems provide the same features or functions as other CRM software, and they may be implemented on premise or on demand.

A

True

70
Q

What are examples of leading open source CRM vendors?

A

SuiteCRM, SugarCRM, and Vtiger.

71
Q

What are the benefits of an open source-CRM?

A
  1. Favourable pricing
  2. Wide variety of applications.
  3. Easy to customize. - Attractive feature as they can be molded to meet the specific needs of a company.
  4. Updates and bug fixes for open source of CRM systems are rapidly distributed, and extensive support is available.
72
Q

What is the risk of an open-source system?

A

Quality control, since the system is created by a large community of unpaid developers, there is sometimes no central authority to oversee the quality of the product.

73
Q

What is the Larson company

A

Larson is an Australian Jeweller who made niche fine jewelry focusing on special experiences, lifetime customer relationships, and personal service.

74
Q

Describe Larson’s original business strategy

A
  1. Operates without a traditional store, through the use of established studio workshops where customers work with jewellers to participate in the creation of their unique pieces of jewelry.
  2. Managed customer information entirely on paper, including inquires, payments, production, and servicing. This was fine for low volume, high value sales but he wanted to expand so this was no longer possible.
75
Q

Describe the issues faced by Larson through their original strategy

A
  1. Since it was manual it was hard to find the data, but they needed to access it from a central depository.
  2. They could not analyze the manual data, it was hard to understand who became customers and how to shape their strategy better
  3. Had to contend with online Jeweller who had high volume, low margin business, impacting the customers attitudes and lower the price expectations. While Larson provided value, it was not the cheapest and it came from creating a memory that would last forever.
76
Q

What was the solution that Larson picked?

A

SugarCRM, allowed Larson to quickly capture information and enhance the customer experience.

77
Q

What is Flexidocs?

A

Allows users to generate documents with a single click using data from a CRM system.
Companies can then email it top their customers, and easily get electronic signatures.

78
Q

What is social CRM?

A

The use of social media technology and services to enable organizations to engage their customers in a collaborative conversation.

79
Q

What is the purpose of the social CRM?

A

Provide mutually beneficial value in a trusted and transparent manner.

80
Q

Why do companies suddenly implement a CRM? How is it used?

A

Respond to the customer ownership in this two way conversations. Monitor services like Facebook, Twitter, Linkedin for mentions of they products, services, brand, and respond accordingly.

81
Q

What is a real time CRM?

A

A CRM system enabling organizations to respond to customer product searches, requests, complaints, comments, reviews, rating, and recommendations in near real time 24/7/365

82
Q

What is a supply chain?

A

The coordinated movement of resources from organizations through conversion to the end consumer.

83
Q

What is the trend with the supply chain recently?

A

Reliance on other companies for the supply of goods and services, as they recognize that other companies can do it more efficiently and effectively then they can, thus an increasing number of suppliers.

84
Q

What does the supply chain include?

A
  1. Flow of materials, information, money from raw material suppliers.
  2. Organizations and processes that create and deliver information and services to the end users
85
Q

What is supply chain visibility?

A

The ability of all organizations in a supply chain to access or view relevant data on purchased materials as these materials move through the their suppliers production process.

86
Q

What is inventory velocity? What is the benefits of the inventory velocity?

A

The speed at which a company can deliver products and services after receiving the materials required to make them. Customer satisfaction.

87
Q

Describe the history of collecting supply chain information

A

Manual, labour based tracking, and monitoring

88
Q

Describe the new approach to collecting supply chain information. What are the benefits?

A

Sensors, RFID tags, meters, GPS, and other devices and systems.

  1. Real time information on all products moving through the system, creating better supply chain visibility.
89
Q

What are the three segments of the supply chain?

A

Upstream, downstream, and internal.

90
Q

What is upstream segment

A

Sourcing or procurement from external suppliers.

91
Q

What is downstream segment

A

Distribution takes place, frequently by external distributors.

92
Q

What is internal segment

A

Packaging, assembly, or manufacturing takes place.

93
Q

Describe the upstream segment. What do the supply chain managers do?

A
  1. Select suppliers to deliver the goods and services the company needs to produce its products or services.
  2. Develop pricing, delivery, and payment options between a company and a supplier
94
Q

What is included in the upstream process?

A
  1. Managing the inventory
  2. Receive and verify shipments
  3. Transfer the goods to manufacturing facilities
  4. Authorize payments
95
Q

Describe the internal segment. What do the supply managers do?

A
  1. Schedule activities for production, testing, and package, and prepare goods for delivery.
  2. Monitor quality levels, production output, and worker productivity.
96
Q

Describe the downstream segment. What do the supply managers do?

A
  1. Coordinate the receipt of orders
  2. Develop a network of warehouses.
  3. Select carriers to deliver products to customers.
  4. Implement invoicing systems.
97
Q

What is reverse flow or reverse logistics?

A

Information and goods can go in the opposite direction. For example in the retail industry, any unwanted or damaged goods the customer will return to the retailer, which may be sent back to the manufacturer.

98
Q

What are tier 3 suppliers?

A

Produce basic products such as glass, rubber, and plastic.

99
Q

What are tier 2 suppliers?

A

Suppliers use the tier 3 inputs to make windshields, tires, and mouldings.

100
Q

What are tier 1 suppliers?

A

Suppliers produce integrated components such as dashboards and seat assemblies.

101
Q

What are the three flows in the supply chain?

A
  1. Material
  2. Information
  3. Financial
102
Q

What are material flows? What approach is followed?

A

Physical products, raw materials, suppliers, etc along the supply chain. A product life cycle from dirt to dust as reverse supply chain also takes place.

103
Q

What are information flows?

A

Data related to demand, shipments, orders, returns and schedules as well as changes to these data.

104
Q

What are financial flows?

A

Involves money transfers, payments, credit card information/authorization, payment schedules, e payments, and credit related data.

105
Q

What is supply chain management?

A

An activity in which the leadership of an organization provides extensive oversight for the partnerships and processes that compose the supply chain and leverages the relationships to provide an operational advantage.

106
Q

What is the purpose of SCM?

A

Improve the processes a company uses to acquire the raw materials it needs to produce a product or service then deliver that product or service to its customers. Ultimately reducing problems and friction,

107
Q

What are the 5 components of SCM?

A
  1. Plan
  2. Source
  3. Make
  4. Deliver
  5. Return
108
Q

Describe the planning component of SCM. (3 points)

A
  1. Strategic component of the SCM.
  2. Have a strategy for managing all the resources that are involved in meeting customer demand for their product or service.
  3. Involves a set of metrics (measurable deliverables) to monitor the organizations supply chain and ensure it is efficient and delivers high quality value to customers for the lowest cost.
109
Q

Describe the source component of the SCM. (3 points, remember this one is a copy of the description of the upstream question)

A
  1. Organizations choose the supplier to deliver the goods and services they need to create the product or service.
  2. Supply chain managers develop the pricing, delivery, and payment options with suppliers.
  3. Develop the managing of inventory, receiving and verifying shipments, ship to manufacturing, and authorize the payment.
110
Q

Describe the make component of SCM. (3 points, remember this one is a copy of the description of the internal question)

A
  1. Manufacturing component.
  2. Schedule the production, testing, packaging, and delivery of the goods and services.
  3. Monitor quality, work performance, and production output.
111
Q

Describe the deliver component of SCM. (2 points, this is a copy of the description of the downstream question)

A
  1. Refers to as logistics
  2. Coordinate the receipts of customer orders, develop a network of warehouses, select who ships the products to the customer, invoice system to receive payments.
112
Q

Describe the return component of SCM. (2 points)

A
  1. Create a responsive, flexible, network for receiving defective, returned, or excess products that come from the customer.
  2. Support customers who have problems with the delivery
113
Q

What does friction in the SCM increase? What does it decrease?

A

Costs, time, inventory
Customer satisfaction.

114
Q

What does SCM reduce?

A

Uncertainty and risks by decreasing inventory levels and cycle time while improving business processes and customer servicer.

115
Q

What is ship from store?

A

Goods ordered online are delivered from a physical store.W

116
Q

What is click and collect?

A

Customers buy products online and collect the products at a physical store or warehouse.

117
Q

What is Endless Aisle?

A

Using in store kiosks, customers can order products not in stock in their local store but available in another one. Products are then delivered using the ship from store or click and collect process

118
Q

What is an inter organizational information system (IOS)

A

An information system that supports information flow among two or more organizations.

119
Q

What are the benefits of an inter organizational information flow?

A
  1. Reduce the cost of routine business transactions.
  2. Improve the quality of the information flow by removing or eliminating error.
  3. Compress the cycle time involved in fulfilling business transactions.
  4. Eliminate paper processing and its associated inefficiencies and costs.
  5. Make the transfer and processing of information easier for users.
120
Q

What model is implemented by most SCM systems?

A

The push model.

121
Q

What is the push model?

A
  1. A business model in which the production process begins with a forecast, predicting the products that customers will want as well as the quantity of each product.
  2. The company then produces the amount of product in the forecast, typically by using mass production, and sells or pushes those products to the customer.
122
Q

What is another name for the push model?

A

Make to stock.

123
Q

What are the disadvantages of the push model?

A

Forecasts are often incorrect, typically you never get it right. If you produce too much, you have excess inventory and thus holding costs therefore you lose money and will have to sell them at a discount. If you have not enough you will lose sales and will lose the customers to the competitors.

124
Q

What is the pull model?

A
  1. A business model in which the production process begins with a customer order and companies makes only what the customer wants.
  2. A process closely aligned with mass customization.
125
Q

What is the benefit of the pull model? What is the other name for the pull model?

A

It avoids the uncertainties posed by the push model, and it is also called make to order

126
Q

What is an example of a company that uses the pull model?

A

Dell, their intricate system begins when an order is sent, ensuring that only the necessary products are sent and used in the process.

127
Q

What type of company cannot use the pull model?

A

Automobiles, as they are complex to manufacture and have long lead time, thus they need to mass produce.

128
Q

What are the two sources of problems in the supply chain? What is a major source for the first source of problem?

A
  1. Uncertainty - Demand forecasts and delivery times
  2. The need to coordinate multiple activities, internal units, and business partners.
129
Q

What factors influence demand?

A
  1. Competition
  2. Price
  3. Weather Conditions
  4. Technological Developments
  5. Overall economic conditions
  6. Consumer Confidence
130
Q

What is the bullwhip effect?

A

Erratic shifts in orders up and down the supply chain.

131
Q

Describe the bullwhip effect

A

When the different factors affects the customers demand and they are viewed from the eyes of the managers at each level differently, they will be magnified at each link. If one segments put their interests about those of the chain, stock piling can occur.

132
Q

What is vertical integration?

A

Strategy of integrating the upstream part of the supply chain with the internal part, typically by purchasing upstream suppliers, so as to ensure timely availability of supplies.

133
Q

What is the Just In Time System?

A

An inventory system in which a supplier delivers the precise number of parts to be assembled into a finish product at precisely the right time.

134
Q

What is the disadvantage of the JIT?

A
  1. Suppliers are expected to respond immediately, as a result they must carry more inventory than they otherwise would, it does not eliminate excess inventory, as it shifts the excess inventory from the customer to the supplier.
  2. JIT charges a few large shipments into many small shipments making the overall process less efficient.
135
Q

Describe the ability of suppliers to spread excess inventory across their customers

A

it is possible but quite difficult.

136
Q

What is vendor managed inventory?

A

An inventory strategy where the supplier monitors a vendors inventory for a product or group of products and replenishes products when needed.

137
Q

What are the four solutions to supply chain problems?

A
  1. Building inventories
  2. Just in Time Systems
  3. Vendor managed inventory
  4. Information sharing.
138
Q

Describe information sharing?

A
  1. Facilitated by electronic data interchange and extranets.
  2. Sharing information along he supply chain allows for improved demand forecasting.
139
Q

What is an example of information sharing / vendor managed inventory IRL?

A

Walmart provides Proctor and Gamble with information to their inventory systems so they know when to ship more products for customers to purchase.

140
Q

What is electronic data interchange (EDI)

A

A communication standard that enables business partners to transfer routine documents electronically.

141
Q

How does EDI format?

A

In accordance with agreed upon strategies.

142
Q

How does it transmit messages?

A

Over the internet using a converter called a translator.

143
Q

What are the benefits of EDI?

A
  1. Minimizes data entry errors.
  2. Length of message can be shorter
  3. Messages are secured.
  4. Reduces cycle time
    5, Increases productivity
  5. Enhances customer service
  6. Minimizes paper usage and storage.
144
Q

What are the disadvantages of EDI?

A
  1. Business processes may need to be restructured to fit the EDI requirements.
  2. There are many EDI standards and so a company may need to use multiple EDI standards to communicate with varying business partners.
  3. EDI is actively being replaced by XML web based services.
145
Q

How do we implement IOS and SCM systems?

A

You must connect the intranets of its various business partners to create extranets.

146
Q

What do extranets do?

A

Link business partners over the internet by giving them access to certain areas of each others corporate intranets.

147
Q

What is the primary goal of the extranet?

A

Foster collaboration between and among business partners.

148
Q

Describe how extranets work

A
  1. The business will provide extranet access to certain B2B suppliers, customers, and partners.
  2. Individuals access the intranet through the internet
149
Q

What do extranets allow for? (3 points)

A
  1. Allows external business partners to collaborate with internal employees
  2. Allows business partners to enter the company’s intranet, to access data, place orders, check the status of those orders, communicate and collaborate.
  3. Makes it possible for partners to perform self-service activators such as checking inventory levels.
150
Q

What technology is used by extranets to ensure safe access?

A

VPN

151
Q

What are the benefits of extranets?

A
  1. Faster processes and information flow
  2. Improved order entry and customer service.
  3. Lower costs
  4. Improved business effectiveness.
152
Q

Describe the “A company and its dealers, customers, or suppliers” extranet. What is an example.

A

This extranet cents on a single company. For example, FedEx Intranet allows customers to track the status of a delivery, and customers can access the database. saving on HR costs.

153
Q

Describe an industry’s extranet. What is an example?

A

The major players of an industry can team up to create an extranet that will benefit all of them. Opentext enables companies to collaborate effectively through a secure network. Used for mission critical businesses.

154
Q

Describe the joint venture extranet. What is an example?

A

The partners in a joint venture use the extranet as a vehicle of communication and collaboration. The Bank of America and the lending Tree.

155
Q

What is a procurement portal?

A

Corporate portals that automate the business processes involved in purchasing or procuring products between a single buyer and multiple suppliers.

156
Q

What are distribution portals?

A

Corporate portals that automate the business process involved in selling or distributing products from a single supplier to multiple buyers.