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How CRM becomes important in supply chain management

A ship loaded with containers on the water.

Many underestimate customer relationship management’s impact on a business’s supply chain. Predicting consumer behavior, analyzing customer data, and accurately forecasting can all positively impact your bottom line. 

A CRM supply chain maintains the flow of your goods and services, making production more efficient and intuitive.

This guide will tell you what you need to know to leverage your customer relationships and simplify supply chain processes.

The role of customer relationship management

CRM helps maintain long-term customer relationships, keeping your business profitable and output predictable.

With CRM software, you can track customer behaviors, preferences, and other information that informs your decisions regarding your supply chain workflows.

What is a customer relationship management system?

CRM systems use technology to collect business-related information, such as:

  • Contact details.
  • Service issues.
  • Sales opportunities.

You might use CRM software to track data regarding your customer, vendors, suppliers, and stakeholders.

In addition, CRM software is a powerful tool for streamlining customer interactions and keeping information consistent across all teams.

It gives you a clear overview of what customers want and makes it easy to share these demands with other team members.

What is supply chain management software?

Like CRM software, SCM (supply chain management) software centralizes information regarding your supply chain and manages your production process.

With it, you can maintain healthy supplier relationships, apply inventory management to your stock, and track operational processes.

SCM works by standardizing production, shipping, and distribution. In addition, it keeps tight control of your inventory, enabling manufacturers to manage orders according to stock levels and costs.

What does an SCM offer?

SCM offers an easy way to simplify the distribution process by tracking raw materials as they undergo assembly into your final product.

In addition, SCM synchronizes your protocols and logistics with supply chain managers, ensuring that distribution goes according to plan.

How CRM can benefit the supply chain management

CRM adds value to your supply chain by improving customer retention, customer satisfaction, and profit margins.

Because CRM software tracks customer demands and feedback, you have the competitive advantage of adjusting aspects of your supply chain operations, such as:

  • Shipping options: Do your customers prefer specific distributors?
  • Delivery times: Is there a way to improve your shipping times?
  • Inventory control: Are you keeping up with customer demand?

CRM data can also inform service teams of any fluctuations in consumer demands.

For instance, your CRM platform can tell you what products your customers prefer and whether they are more popular during a specific season.

Before diving deeper into the advantages of a CRM supply chain, let’s look at the main differences between CRM and SCM.

Key differences between CRM and SCM

While CRM and SCM systems are interconnected, the two still have some key differences.

Customer and product management

CRM improves customer service through unified communications and marketing automation. It provides sales resolutions and lead-generation efforts from a consumer-facing perspective.

On the other hand, SCM manages product delivery, using sales data to predict future revenue.

It also doubles as inventory management software, collecting logistical information to help you make data-driven decisions. 

Revenue generation and cost management

While CRM provides opportunities to increase revenue, SCM simplifies supply chain operations and keeps cash flow healthy.

For instance, CRM software can tell you what products are more popular with customers and what marketing tactics are most effective.

On the other hand, SCM helps manage inventory, so you aren’t overstocking and spending more than you need.

Ultimately, CRM takes a more external approach with end users, while SCM occurs internally. And this is where a CRM supply chain shines.

The relationship between your customers and the supply chain

Customers are integral to your supply chain, as they keep your business profitable. Businesses wanting to maximize value should make supply chain decisions with customers in mind.

For instance, you might collaborate with suppliers with experience in inventory management to keep your supply chain stocked at all times.

In addition, by integrating CRM into your sales processes, you can gather the necessary information to make informed decisions on adjustments to your supply chain.

CRM platforms let business owners predict behaviors, such as:

  • When customers are most likely to make a purchase.
  • What products are most popular at a given period.

Let’s look at the main advantages of a CRM supply chain.

Advantages of CRM-SCM integration

Integrating SCM and CRM keeps your product flow steady. Collecting CRM data can help you specify material needs to supply partners.

Thanks to accurate data analysis and real-time updates, business owners enjoy:

  • Reduced overhead costs.
  • Fewer bottlenecks.
  • Predictable production schedule.

In addition, a CRM supply chain integration enables immediate feedback and problem-solving through customer and supplier portals.

This software also centralizes contact information, making reaching out to the appropriate point persons easy.

CRM-SCM integration considerations

The benefits for businesses that implement a CRM supply chain integration are evident.

However, there are a few things to consider before combining your systems:

Employee skills

Some employees that are well-versed in CRM technology may not be as knowledgeable about SCM and vice-versa.

Consider whether integrating your systems will require additional training and, if necessary, facilitate this ASAP.

Sometimes, you may need to outsource talent to manage this shift temporarily.

Required system features

Not all software is compatible with each other.

Consider what features are necessary – do you want to open a customer portal? Do you need reporting and accounting features?

Identify the primary needs that you can satisfy with each system.

File load needs

Technically, you can make uploading data easier by determining each system’s file load needs.

Some systems require full file loads, while delta loads may suffice with others.

Unexpected errors

Integrating two systems for the first time can lead to unexpected errors and failures.

Prepare to resolve potential risks that can hurt your bottom line or cause costly delays.

How a well-managed CRM becomes key to success for supply chain management

Supply chain management is essential to any business’s success, as it involves:

  • Streamlining operations.
  • Ensuring timely goods and services delivery.
  • Managing resources to maximize profits.

In today’s world, having a well-managed CRM system is crucial to successful supply chain management.

A CRM supply chain helps businesses develop better customer relationships by providing the necessary information about customers.

With this data handy, companies can better identify opportunities for improvement in the supply chain process and make informed decisions.

Combining ERP, SCM, and CRM

Another system you might consider incorporating into your SCM and CRM ecosystem is enterprise resource planning (ERP).

ERPs manage other aspects of your business that CRM and SCM don’t, including financing, HR, and manufacturing.

That said, ERPs also offer features that cover the supply chain and distribution.

When you combine all three systems, you reap the benefits of organized planning, material purchasing, simplified business processes, and scalable software. 

In the video below, check out how an integration with Method helped double this shipping container company’s revenue in just three years.

Key takeaways

Integrating your CRM and SCM systems can provide your business with all the information it needs to stay profitable.

Keeping customers, partners, and suppliers in the loop reduces errors, saves time and money, and distributes your resources wisely.

If your supply chain could use the benefits of a robust CRM program, consider Method:CRM.

Method unifies all team communications and distribution data, streamlining your supply chain processes. It also integrates with systems you already use, such as Gmail, Google Calendar, Outlook, Mailchimp, Zapier, and more.

CRM and supply chain management FAQs

How does the supply chain relate to CRM?

The supply chain relates to CRM because inventory and distribution depend on consumer demands. With a robust SCM strategy, you can get products to customers quickly and with minimal delays.

Why is CRM important in the supply chain?

CRM is essential to your supply chain because it provides accurate data that can drive purchasing and distribution-related decisions. Business owners can anticipate when to restock and what products perform best.

What does CRM mean in logistics?

CRM logistics use contact lists, schedules, and client communications to acquire and retain customers. It leverages technology to create accurate sales forecasts, automate marketing efforts, and streamline operations management. 

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