 MIS Notes
 April 1 2015
 Managing Internal Firm Processes (ERP)
 Branching out into supply chain and Customer Relationship Management
(CRM)
 Upstream Supply Chain Management
 Just In Time productions
 Benefits of well oiled supply chains
 Synergies
 Process Innovations
 Just-in-Time production
 Vendor Managed Inventory (VMI)s
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Potential problems with bad supply chains
Distorted info
Excessive inventories
Inaccurate capacity plans
Missed product schedules
 Just0in-Time Production
 Keeping inventory is costly, storages, taxes, capital tied up that could be
else where, etc
 Either wasteful, or wasteful for not meeting demand
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JIT Optimizes ordering quantities
 Insures that materials are there when needed
Either smaller inputs more often.
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APPROACH PIONEERED BY Toyota
 Six Sigma- if something that occurs that is two SD away from the mean, that is
significant, so you want a process that is so specific, you are right %99.99999 of
the time. We don’t want over or under inventory
 Computer manufactures capitalize on this the most because they need to be
extra careful about inventory, as electronics are quickly outdated.
 Vendor-Managed Inventory (VMI)
 Business model in which suppliers manage the manufacturers inventory
levels based on pre-established service levels.
 Suppliers monitor’s stock levels and sales data
 You give the supplier access to your sales and projections, and the supplier
decides what to get to you to make sure order is filled.
 Requires retailer to share real time data
 Benefits
 Cost savings
 Minimized stock out situations
 Accurate forecasts
 Reduced errors a
 Prioritized goods shipments
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Great example at AMAZON- Can go right from supplier to
customer, mitigating just in time problem by serving as a
brokerage. Buyer can see if it is in stock, and supplier ships it
directly
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Optimize coordination of planning s
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Supply Chain Management (SCM) see page 19 of PowerPoint
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Safety Stock- Assign optimal extra stock
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SCM helps with ERP- Limits the ability of a human to screw up
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ERP systems are primarily used to optimize business
processes within the org
SCM is used to improve business processes that span
organizational boundaries
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Supply Chain Visibility – The ability to track products as they
move through the supply chain and foresee external events
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Supply Chain Analytics- the use of key performance indicators to
monitor performance of the entire supply chain, including
sourcing, planning, production and distribution.
 RFID- Radio Frequency Identification
 Counts and tracks every item/pallet/box through radio waves
 Bullwhip effect in Supply Chain
 Unexpected occurrences have a ripple effect and this ripple gets larger as
it moves up the supply chain
 Downstream has incentive to exaggerate demand
 True for hot items
 In fear of out of stock, retailers exaggerate demand to get more quota
 Apple I phone- orders are 3 times demand
 Promotions
 Distort the natural demand from consumers
 Information not shared through the supply chain
 Consequences
 Higher production and transportation costs because we are over
producing
 Creates more inventory in the supply chain, hurts bc there is now
inefficiency, excess
 Bullwhip effect
 Solutions to Bullwhip problem
 Share info across supply chain
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But not everyone wants to do this
 Can lose bargaining position by sharing info
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Porters 5 forces- whoever is at the weaker end will want to share info
Make it possible for those that want to share info to do so
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Basic Principles
Maximize Profit
 How Does IT help??
 Increases competitive advantage, but IT is just another part
required to further the objective of the firm
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What do you think about when it comes to attracting and retaining
customers? Exploit customer at maximum point they are willing to pay,
we need to dissect the market
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to find this info, and minimize competition
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Sales- Art or Science
 Answer-Both
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Data allows us to resolve issues of speculations so the firm can
deploy the assets to correct area (sales people to correct market)
CRM- Management of all aspects of the relationship between the firm and
its customers.
Objective
Increase Loyalty, retention, and overall, profitability--- Willingness to
pay
What this enables
 Identify customer types, customization
 of marketing, comprehension of buying behaviors
 CRM
 You are trying to emotionally lock in your customer, making it more difficult for
them to switch
 We do this through CRM
 We have info on the customer, and can analyze each on
 Think amazon, it knows what you bought, and what to display
because it can guess what you will buy next
 Developing a CRM strategy
 MARs- no CRM
 More than just software purchase and installation
 Enterprise wide changes
 Policy changes
 Need to reflect goals- customer or profit centric?
 Business values?
 Collect data on all customer
 Architecture of CRM
 Operational CRM
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Sales force Automation
 Analytical CRM
 Collaborative CRM
 Operational CRM
1) Salesforce Automation
 Get customer to do the work so you don’t have to
 Enables direct interaction with customers
 Access to complete info about consumer
 Sales force Automation
2)Customer service and Support
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Dissect customers concerns so that issues can be routed to correct
person
Better efficiency, better service, and hopefully customers can answer
their own questions
3) Enterprise Marketing Management (EMM)
 Improve management of promotional campaigns
 Make sure right messages are sent to the right people through
the right channels
 Customer lists need to be managed carefully
 Individualized attention to each potential customer
 Analytical CRM
 Looking for customer behavior and perceptions
 Customized marketing
 Upselling-cross selling
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Key technologies used to create predictive models
 Data mining
 Decision support systems
Continuous data collection and analysis is necessary
Analytical CRM also helps coordinate when people have multiple online
identities
 Facebook, yahoo, google, multi devices, firm needs to track all these to
understand each customer
 Collaborative CRM
 Refers to systems providing effective and efficient communication with the
customer from the entire organization
 Collaborative CRM enhances communication
 Greater customer focus
 Lower communication barriers
 Example – Threadless- a Company that Sells shirts online, runs
competition where customers design the shirts, all they do is print
and ship, no need to create product, customer does it for them and
chooses what they want
 Info integration
Critical Thinking
Why don’t focus group methods work
People dont know what they want
People don’t tell the truth
Expressed vs actual belief