Can demand chain management improve on CRM's returns?

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By: Wise Marketer Staff |

Posted on September 27, 2002

Manufacturers, distributors and service providers that achieve efficiency in their supply chains, but haven't got similar returns from classic CRM solutions, are increasingly embracing demand chain management (DCM) to cut costs and optimise sales processes, according to Aberdeen Group.

Aberdeen's new report, What Works: Sell Side/Demand Chain Best Practices - Empowering the Multichannel Buyer, reveals that, with the widespread adoption of internet technologies, and the sales challenges stemming from the global recession, sellers are heightening their focus on the demand side of the value chain.

Leading companies in a number of vertical sectors are now deploying 'sell-side' applications that automate processes throughout the demand chain. In doing so, they are speeding up cycle times, eliminating redundant activities, extending market reach and, most importantly, giving buyers of all kinds more choice and greater control over those business processes to which they are exposed.

Sell-side internet applications
According to the report, the 'sell-side' e-commerce space has traditionally included an evolving set of applications that help suppliers, manufacturers, service providers, distributors, and a variety of resellers to leverage the internet as a channel through which they can reach and educate customers about their companies, and the value of their products and services.

Demand chain technologies
Demand chain management (DCM) technologies not only guide the online selling process from initial interest through to the actual order but they also commit to the fulfilment of orders as well as the management of post-sale processes.

The report profiles demand chain technologies that improve a wide range of sell-side business processes, including brand and product information management, merchandising, order management and post-sales and after-market replenishment. It also provides an overview of twelve innovative selling organisations that demonstrate best practices in deploying customer-facing process management applications throughout the demand chain - efforts that often serve as a 'technology bridge' that connects supply chain management (SCM) applications and classic customer relationship management (CRM) systems.

The main benefits
In terms of the adoption of internet technologies among both large and small companies, Aberdeen found that, for example, 86% of Staples Contract's new business-to-business (B2B) customers conduct some of their commerce activities online, and the company expects the online channel to drive 70% of all orders by the end of 2002.

Similarly, the report reveals that WayToBe, a small company that provides apparel and merchandise to companies like McDonald's, has decreased development efforts associated with both print and electronic catalogues by up to 35%, and that this streamlined process for catalogue circulation has boosted revenue by 10% or more.

And in terms of benefits from order management solutions, Day-Brite Capri Omega, for example, has reduced its order-to-ship process flow from 24 hours to less than an hour through the use of DCM solutions.

"Even in light of the continued sluggishness of technology buying, our practice expects to see accelerated adoption among end user organisations of customer-facing, web-based technologies that sit between SCM and CRM applications, automating demand-driven business processes," said Kent Allen, DCM research director for Aberdeen.

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