CRM Blog TeamNovember 3, 2022

What is the Difference Between SCM and CRM

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What is the Difference Between SCM and CRM

SCM and CRM use tons of data that can be used by people to make informed decisions for their organization by tracking information critical to their business. Businesses use both or at least one of the management systems to improve and diversify their business management software solutions.    

It would not be wrong to say that supply chain management greatly influences customer relationship management and a healthy customer relationship drives supply chain operations. Hence, the relationship between the both   

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What is Supply Chain Management (SCM)? 

Supply Chain Management is the centralized management of the production flow of goods and services in the process of creating a final product from raw materials. This management system helps achieve an improved quality of product, timely delivery of the product, build a strong customer brand, and increase brand profitability. It tracks products and manages the supply chain process that includes product inventory, sales and product distribution, logistics, tracking of finished goods, distribution, and more. 

What is Customer Relationship Management (CRM)? 

Customer Relationship Management is a system that manages the relationship between an organization and its customers. Businesses use strong marketing strategies, programs, and technologies to analyze data and customer behavior that can help them serve their customers better and improve customer service relationships. This system also involves recording interactions using phone, email, or social media and based on the past behavior of a customer, companies predict what they are likely to buy. This way the CRM solutions help track the response from a particular marketing strategy and measure ROI from the same which in turn retains customers and drives sales opportunities. 

What is the Difference Between SCM and CRM?

While the motive of the two enterprise systems is to use data to make informed decisions that will help them satisfy their customers, the way SCM and CRM functions are different. SCM keeps a tab on the material and product shipments by the production and distribution department, while CRM keeps track of the customer interactions that go on in the sales and marketing departments. The different processes of SCM and CRM occur at varying stages of the customer lifecycle. 

SCM manages product and services information while CRM manages customer information

SCM manages product and service inventory, logistics, sales, and delivery and this management is backed by a data-driven approach.

CRM involves marketing strategies to gain customers and further maintain customer relationships through CRM software, communication tools, and reporting and data analytics features.  

SCM executes the sales process while CRM increases sales  

SCM is a kind of management that focuses on improving the sales process by speeding up the product delivery time and automating the supply chain process. Whereas, CRM increases the overall ROI for a business.  

SCM supports cost reduction while CRM boosts revenue

SCM functions in a way that manages to deliver products and services on time and also reduces the cost of the same. Unlike SCM, a CRM system is integrated within a business with the sole purpose of generating more sales and revenue.

SCM and CRM systems have differing objectives 

SCM strategies allow organizations to produce quality products and services timeously by providing the information, materials, and resources as and when needed. This ensures that the supply management techniques are effectively executed and product availability is achieved. 

On the other hand, a CRM system makes sure that the customers are satisfied with the organization’s products, services, and support. Businesses make effective use of business process automation for their service, support, and sales. 

SCM and CRM offer individual benefits to an organization

Supply chain management streamlines operations that are a part of the product cycle, storage, transportation, inventory management, and distribution and improves other aspects of a business especially the efficiency of such operations with reduced costs. SCM offers additional value to a business as the system is backed by data and behavioral analysis that helps by providing meaningful implications that can benefit the organization.

On the other hand, Customer relationship management improves the customer’s relationship with a brand and parallelly helps the sales team in a business operate efficiently and effectively. The CRM tools allow the sales and marketing team to manage customer contacts, sales, future aspects, productivity, and more.   

While both SRM and CRM systems bring individual benefits to an organization, there are various aspects that need to be considered when choosing one of the systems or both for their business. The right integration of these systems can be a game-changer for a business and help it grow immensely.