CRM and Supply Chain Management

Dresser-Rand has an established reputation in the world of energy conversion. In recent years the company has incorporated e-business solutions into the company's overall business strategy. The purpose of this discussion is to develop a business model for a customer relationship management and supply chain management system to support Dresser-Rand's e-business. Before we can develop a business model, we must clearly define the terms; business model, customer relationship management and supply chain management.

Defining Terms

An article entitled "Business Models on the Web" explains that a business model contains the techniques that a business utilizes to maintain and produce a profit. The article also explains that "the business model spells-out how a company makes money by specifying where it is positioned in the value chain...Internet commerce will give rise to new kinds of business models." ("Business Models on the Web") A business model is the most essential component in creating a successful business.

Customer Relationship management (CRM) is an important aspect of a business model. Customer relationship management is defined as, "all aspects of interaction a company has with its customer, whether it be sales or service related." ("CRM") E-business has greatly influenced thee manner in which firm's control CRM. E-business has changed the way that customer's interact with businesses and how businesses respond.

The last term that we will define is supply chain management. Supply chain management involves,

Optimizing business processes and business value in every corner of the extended enterprise -- from your supplier's supplier to your customer's customer. Supply chain management can use e-business concepts and Web technologies to manage beyond the organization, upstream and downstream. It is the strategic approach that unites all steps in the business cycle, from initial product design and the procurement of raw materials, through production, shipping, distribution, and warehousing until a finished product is delivered to a customer." ("Supply Chain Management")

Development of Business Model

Now that we understand the concept of a business model and the specifics of Customer Relationship Management and Supply chain management we can create a business model for Dresser-Rand's e-business. The current e-business that the company has is rather limited in its scope. The current website allows customers to purchase products through the internet or to call and order products over the phone. The design of the current e-business in plain and simple and provides very little in the way of customer relations and supply chain management.

In an effort to improve customer relationship management the business model should include the purchase of software that will improve the relationship between customers and Dresser-Rand. Customers will be able to suggest changes to the website that will make transactions easier; incorporating a business strategy that is sensitive to the needs of customers and other businesses.

This software will allow Dresser-Rand to record and study customer's spending patterns which will allow the company to better meet the needs of the customer. The software will also allow the company to discontinue or improve upon products that do not sell well. The relationship between customer and supplier is essential because it creates and establishes loyalty in the mind of the customer. Customer loyalty is essential to ensuring that the company can sustain and create a profit which is the purpose of a business model.

The advent of the Internet has created an environment whereby the customer/supplier relationship is handled through the use of technology. Dresser-Rand must invent ways to combat this phenomenon with strategies that make the relationship more personalized. Dresser-Rand can realize this personalization through the use of e-mail organizers, Web development applications and help-desk software. ("CRM") Each of these strategies provides consumers with the ability to effectively communicate with Dresser-Rand and vice versa.

Supply chain management for Dresser-Rand will also involve the use of software and other technologies. The elements of the supply chain that Dresser-Rand will focus upon forecasting, warehousing, Logistics, inventory management and procurement. ("Supply Chain Management") According to IBM a successful Supply chain management system will begin with a creation of a vision for the e-business. ("Supply Chain Management") The company must then be successful at integrating technology and business processes for the e-business. ("Supply Chain Management") The next step involves the implementation of solutions that are unique to the energy conversion industry. ("Supply Chain Management") Finally, Dresser-Rand must capitalize on providing the appropriate products to the members of the supply chain. ("Supply Chain Management")

In addition to incorporating the aforementioned factors into the business model for Dresser-Rand, the company must also make supply chain management e-business enabled. IBM explains that this can be accomplished through the use of groupware, Extranets and web servers. ("Supply Chain Management") IBM also asserts that an e-business that incorporates these tactics to their supply chain management system can expect to,