Introduction to SCM CRM integration

While supply chain management (SCM) and customer relationship management (CRM) are not commonly thought of together, these software systems make a powerful team. SCM CRM integration can help manufacturers connect with their supply chain customers.

Supply chain management (SCM) and customer relationship management (CRM) software are not usually mentioned in

the same breath -- let alone SCM CRM integration -- and with good reason.

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SCM software chugs along, ensuring that materials and information flow through the supply chain with the highest possible efficiency and the lowest possible cost. Meanwhile, CRM software focuses on the identification, targeting, acquisition and retention of customers, and on the building of strong relationships between the business and its customers.

Thus, the two tools tend to sit at opposite ends of the enterprise and deal with different sets of data albeit with the same end goal. There have been exceptions -- notably Dell Inc.'s famous skill at building to order, which was based in part on tight integration between customer-facing functions and supply chain elements.

For the time being, however, most organizations are not run like Dell so "connecting SCM and CRM is not an integration challenge in the traditional sense," said Simon Ellis, an analyst with Manufacturing Insights. "CRM and SCM need to function in adjacent spaces and there needs to be a process that connects them loosely."

Still, even loose SCM CRM integration can be important. "We have all watched the economy over the last 18 months and it is clear that consumers are looking to get the bestpossible deals and they want to stretch their dollars further," Ellis said.

One implication of this trend has been the rapid increase in store brands or private label brands -- a trend that Ellis said can be offset by aligning sales and production, leveraging information to increase innovation and better management of the post-sales element of the customer relationship.

"Those things are a sweet spot for CRM and SCM integration," said Ellis.

About the author: Alan Earls had his first exposure to computer programming on one of Digital Equipment Corp.'s PDP-8 minicomputers. He went on to serve as editor of the newspaper Mass High Tech and is the author of the book Route 128 and the Birth of the Age of High Tech, a photographic essay on a key part of Massachusetts economic history. He currently is a freelance writer, covering many aspects of IT technology and writing regularly for SearchManufacturingERP.com.

This was first published in December 2009

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