Chapter 9

Achieving Operational Excellence and Customer Intimacy

Enterprise applications and e-commerce have revolutionized the way businesses operate and interact
with customers.

This module will explore

- how enterprise systems help businesses achieve operational excellence,

- how supply chain management systems coordinate planning, production, and logistics with
suppliers,
- how customer relationship management systems help firms achieve customer intimacy,
- the challenges that enterprise applications pose, and
- how they are taking advantage of new technologies.

An initial example of operational excellence would be a store’s analyzing data to ensure that its

- inventory and
- prices

match those that the customers have shown

- demand for and

- willingness to pay.

Enterprise Systems and Operational Excellence

Enterprise systems are integrated software packages that automate business processes and information
flows across the entire organization.

Enterprise systems help businesses achieve operational excellence by

- streamlining business processes,

- reducing costs,
- improving efficiency, and
- enhancing communication across departments.

Enterprise systems

- provide real-time access to data,

- allowing businesses to make more informed decisions and
- respond quickly to changes in the market.

The use of enterprise systems also enables businesses to

- standardize processes and procedures,

- reducing the risk of errors and
- increasing productivity.

In implementing an enterprise software system, the first step would be to select the functions of the
system that are needed for this particular company or project. Otherwise, the number of features built
into some enterprise systems would become overwhelming and cause the company to waste time and
resources.

Supply Chain Management Systems

A supply chain is a network of organizations and business processes for

- procuring raw materials,

- transforming these materials into intermediate and finished products, and
- distributing the finished products to customers.

Supply chain management systems are software applications that help businesses manage their supply
chain operations.

Supply chain management systems coordinate

- planning,
- production, and
- logistics

with suppliers by providing

- real-time visibility into inventory levels,

- order status, and
- production schedules.

This information helps businesses

- optimize their supply chain operations,

- reducing costs and
- improving efficiency.

Supply chain management systems also enable businesses to collaborate with suppliers, allowing for

- better coordination and

- communication

throughout the supply chain.

A key goal of supply chain management is order fulfillment, which is a process that includes all steps
from when the customer orders the product to when the customer receives it.

This could include, for example,

- running credit checks on the customer,

- making and assembling the product,
- submitting and processing the order, and
- shipping the product to the customer.

It would not, for example, include pre-order processes such as advertising and customer acquisition.
Supply chain functions include distribution management, which manages how the product is distributed
to the buyers.

It also includes planning for demand—how much product is needed to satisfy all customer demands and
orders—and how the company can logistically fill the orders.

Customer Relationship Management Systems

Customer relationship management systems, or CRM, are software applications that help businesses
manage their interactions with customers.

CRM systems help firms achieve customer intimacy by providing a comprehensive view of customer
data, including

- purchase history,
- preferences, and
- behavior.

This information allows businesses to

- personalize their interactions with customers,

- providing targeted marketing,
- customized products, and
- improved customer service.

CRM systems also enable businesses to track customer satisfaction and loyalty, allowing for proactive
measures to address any issues or concerns.

What are the challenges that enterprise applications pose, and how are enterprise applications taking
advantage of new technologies?

Enterprise applications pose several challenges, including

- high costs,
- complexity, and
- the need for extensive training and support.

Additionally, enterprise applications may require significant changes to existing business processes and
organizational structures.

However, enterprise applications are taking advantage of new technologies such as

- artificial intelligence,
- machine learning, and
- the Internet of Things

to improve their functionality and usability. For example, enterprise applications can use machine
learning to analyze data and make recommendations for process improvements or identify potential
issues before they occur.
Internet of Things devices can provide real-time data on operations, enabling businesses to optimize
their processes and improve efficiency.

E-commerce, Digital Markets, Digital Goods

E-commerce has revolutionized the way businesses operate and interact with customers.

Digital markets and digital goods have transformed the traditional retail model, allowing businesses to
reach a wider audience and sell their products and services online.

Digital markets enable businesses to access new markets and reduce costs, while digital goods provide
new revenue streams and opportunities for innovation.

MIS and Supply Chain Management

Supply chain management is an essential part of any business that involves the production and
distribution of goods and services.

It involves managing the flow of goods and services from suppliers to customers, ensuring that products
are produced and delivered on time, and optimizing the overall process to reduce costs and improve
efficiency.

The use of management information systems (MIS) and enterprise systems can have a significant impact
on supply chain management.

These systems provide real-time access to data, enabling businesses to make informed decisions and
respond quickly to changes in the market. This can help businesses to better manage their inventory
levels, reducing the risk of stockouts or excess inventory.

One of the challenges that businesses face in managing their supply chains is the bullwhip effect.

This occurs when demand for a product or service fluctuates, causing variations in the production and
distribution of goods.

The bullwhip effect can result in

- inefficiencies,
- excess inventory, and
- increased costs.

However, the use of enterprise systems and MIS can help to mitigate the effects of the bullwhip effect
by providing real-time data on customer demand and production levels, enabling businesses to adjust
their operations accordingly.

Customer relationship management software is another tool that can have a significant impact on
supply chain management.

CRM software provides businesses with a comprehensive view of customer data, including purchase
history, preferences, and behavior.

This information can help businesses to

 - personalize their interactions with customers,
- providing targeted marketing,
- customized products, and
- improved customer service.

In terms of supply chain management, CRM software can help businesses to better forecast demand and
adjust production accordingly. For example, if a business notices that a particular product is frequently
ordered by a specific customer segment, they can adjust their production levels accordingly to meet
demand.

Additionally, CRM software can help businesses to build stronger relationships with their suppliers,
ensuring that they receive high-quality goods and services in a timely manner.