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Moore Medical Corporation Case Study Solution

Presentation on theme: "Moore Medical Corporation"— Presentation transcript:

1 Moore Medical Corporation
Case Study Presented by:Andrew MetcalfSandra RiebelJoseph JerusaRobert BuchananAnsel Colvin

2 Problem StatementThe problem is that Moore Medical needs Customer Relationship Management (CRM) software that will allow Moore Medical to improve their ability to sense and respond to customer desires. Moore Medical desires to win new customers as well as keep their existing ones by increasing the interaction with its narrow group of market practitioner customers.

3 Key Issues Moore faces:
Churn rate too high (between 30% and 35%, while industry average is 25%)Share of wallet too lowProduct family too narrow (Moore does not stock all requirements for customers)Perfect Orders are 68%; remaining 32% included 17% of split shipments, 10% back orders, and 5% late shipments; everything but late shipments can be resolved by better demand planning and if that is achieved they will have surpassed their perfect order goal of 90%

4 Key Issues Moore faces:
ERP IssuesBids and Quotes – Creating and Retrieving quotes became cumbersomeDoes not offer a total marketing campaign solutionOrder Entry became more difficultNew account setup adds much time to customer callsNew accounts can’t be reviewed with existing ones

5 Moore Medical Alternatives Option # 1
Purchase and implement a new CRM (Customer Relationship Management) System.The list price for the product is $500,000.00In addition, Moore would have to purchase a technology escrow agreement for $2,A customer care support system is also needed and it will cost $7, per/month.For a one year subscription to the customer care support system this will add $90, to their investment.The total cost to implement this new system will cost Moore Medical Corporation $592,Benefit: Makes processing bids and quotes with their customers easier and allows them to have an integrated network through all of their channels such as phone, , and web.

6 Moore Medical Alternatives Option # 2
Install bolt-on modules to their existing ERP system.Module 1= Demand planningBenefit: Purchase based on previous sales history and expected future activity.Module 2= Warehouse transfer systemBenefit: Check all distribution centers for excess stock before an order is placed to a vendor.Module 3= Deal managementBenefit: Compare and analyze different vendor deals to determine optimal stock levels.Module 4= Stock simulationsBenefit: Determine customer service levels that would result from different stock levels.Estimated cost per module is $300,4 modules * $300, each = Total cost of $1,200,

7 Moore Medical Alternatives Options # 3 and 4
Install Both the CRM system and the bolt-on modules for the existing ERP system.Benefits: Achieving the benefits of the CRM system and also being able to choose which modules they would like to add to their ERP system.Cost: A base cost of $592, $300, for each module they choose to integrate.1 Module = $892,500.002 Modules = $1,192,500.003 Modules = $1,492,500.004 Modules = $1,792,500.00Option # 4Moore could choose not to purchase either. This option would require them to try and fix their problems with their current ERP system because it was a very costly investment of $7,000,

8 Analysis – Option A Clarify CRM (Customer Relationship Management)
Comprehensive set of tools for managing a company’s interactions with sales prospects, customers, and clients.Focus on sales and customer relationships.Integrated records bringing together customers from every channel.Greater visibility.Expensive.

9 Analysis – Option B Bolt-Ons
J.D. Edwards ERP (Enterprise Resource Planning) add-on modules.Problems with the existing system:Bid and quotes inefficient.Lacks marketing functionality.Over-complicated order entry.New account setup difficult and complex.Weak forecasting.Complexity a major issue even when lack of functionality is not.

10 Analysis – Option C & D Combination of Clarify CRM and Bolt-Ons.
Expensive.Difficult to implement.Would require huge amounts of adaptation and acceptance from internal users.No upgradesSaves money.Unfavorable for long-term growth.

11 Enterprise Systems Supply Chain Customer Relationship Management
(SCM)Customer RelationshipManagement(CRM)Enterprise ResourcePlanning(ERP)It is important to understand where the CRM system fits in the overall enterprisesystems model for a company. While there are many other systems in a company’sportfolio, these are the three main components: the ERP system is the internalcontrol system or software that runs the main operations of the company, the supplychain management system controls the supply of materials and services needed tosatisfy the manufacturing, distribution and other materiel requirements of thecompany, and the CRM System manages the marketing, sales and customerfunctions of the customer relationship. Typically the ERP system is the datarepository for the SCM and ERP systems.(2012,11).http://faculty.babson.edu/grossman/breeze/crm/CRM_Printable_Version.pdf,Retrieved11,2012

12 Why care about customers
Average company loses half its customers over a five year period.5% increase in customer retention can lead to a considerable rise in net present value profitsTypically companies spend 5 times more on acquisition than retention65-85% customers who deflect say they were satisfied with the supplierA happy customer tells five people, a dissatisfied customer tells nine

13 CRM Benefits Profit Cost Customer Retention Marketing Cost
Wallet ShareSales CostUp-Sale/ Cross SellService Cost(2012,11).http://faculty.babson.edu/grossman/breeze/crm/CRM_Printable_Version.pdf,Retrieved11,2012

14 ERP bolt-onsProduct line – in 2001 more than8,500 products, still considereda fraction of all products in theMedical supplies marketplace.Moore’s strategy was to providea one-stop place for all theproducts the customers needed and to dominate their orders.Markets – Moore divided its customers into 6 groups: Physicians,Podiatrists, Emergency Medical Services, Public Sector, Correction Facilities, Industrial, and Resellers.Demand planningWarehouse transfer systemDeal managementStock simulations

15 ERP bolt-onsA Performance MeasureThe Perfect Order – Moore created this conceptbased on a performance measurement systemdeveloped by the company in late The “perfect order” had all of the items in stock, was shipped on time from the closest distribution center and arrived on time, damage free.Moore’s accuracy was only 68%*2000 orders per day and 17% have to be split between to different distribution centers at a cost of $2.82 per shipment. This cost is absorbed by Moore Medical x $2.82 = per day cost to the company. If Moore Medical work an average of 20 day per month this would result in a $19,176./month cost to the company.

16 CRM from Clarify Consultants ERP bolt-ons > implementation
ConclusionTechnology SolutionsCRM from Clarify ConsultantsERP bolt-ons> implementation> training

17 Ensure the skills, knowledge and associated behaviors required by the
conclusionStrategies for ImplementationMoore is looking to optimize internal functions and predict marketdemand though a CRM systemKnow corporate goals and support these goals through implementation selectionEnsure the skills, knowledge and associated behaviors required by theworkforce support the implementationChange the compensation of the workforce to achieve thedesired behaviors and cultural shifts and motivate employeesto rally behind strategyPlan ERP bolt-ons and CRM to fit in with the visionand goals of the companyBuild everywhere conservativelyTrain employeesBoth short and long term ROI’s should be realized as long as Moore stays customer focused and true to their aim of being a one-stop shop that meets all their customer’s needs

Moore Medical is the average distributor of medicines for practitioners, such as pediatricians and emergency medical equipment. At the time of the case, he relied on traditional channels of customer, such as catalogs, phone and fax to communicate product offerings, promotions, and availability, and take orders. He is now trying to move to the "bricks and clicks" distributor with a strong presence of the internet. He has already made significant investments in e-commerce, web site and in the "back office" ERP software to improve productivity performance of its four distribution centers. ERP software has not met expectations in all areas, and the company must decide whether to invest in additional modules for the system, which could solve their shortcomings. He must also decide whether to make a substantial additional investment in software for managing customer relationships. "Hide
by Andrew McAfee, Gregory border Source: Harvard Business School 21 pages. Publication Date: April 23, 2001. Prod. #: Six hundred and one thousand one hundred forty-two-PDF-ENG

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