Topic > Apply chain management versus traditional management...

A. ApproachThe use of information technology by companies wishing to gain a competitive advantage has increased significantly over the past twenty years. Companies large and small use information systems to connect their internal business functions and business activities to stakeholders such as suppliers and customers. (WEB FORM 13). Supply chain management and customer relationship management are some of the many systems used by companies to perform the above functions. Before comparing supply chain management and customer relationship management systems with traditional systems, a brief description of supply chain management and the activities it entails is fully warranted. This short and simple attempt to compare and contrast SCM and CRM systems with traditional management systems in terms of approaches, efficiency, cost savings and profitability of the company. Jiambalvo (2010) describes supply chain management as “the organization of activities between a company and its suppliers in an effort to provide for the development, production, and profitable delivery of goods to customers” (P, 15). Sunil & Peter further describe the supply chain as “consisting of all parties involved, directly or indirectly, in fulfilling a customer demand. The supply chain includes not only the manufacturer and suppliers, but also the transporters, warehouses, i retailers and even customers themselves. Within each organization, such as a manufacturer, the supply chain includes all functions involved in receiving and fulfilling customer demand. These functions include, but are not limited to the development of new products, marketing and operations, distribution, finance and customer service. Alan et al. (2009) state that “large-scale implementations lead to system-wide inventory optimization. which in turn leads to improvements in costs associated with inventory balances and turns." (See page 21 for note) Mikko & et al (2002) conducted a study on the cost reduction benefits of SCM and found that “sharing demand information in supply chains typically increases supply chain performance by increasing availability and reducing inventory-related costs.” Another important distinction between the two systems and traditional management systems is that the former requires a small amount of data input and output to perform sophisticated and complex functionality, while the latter takes and produces data in a large amount of profitability