Question

What is the difference between CRM (Customer Relationship Management and TQM (Total Quality Management) and then how would you use these two techniques to help you grow your business/company?

Please describe why a manufacturing company depends on cost accounting to help it record the proper financial transactions?

Answer 1

Since, multiple questions have been posted and the questions are unrrelated, I have answered the first one.

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Question 1:

The basic difference between CRM (Customer Relationship Management) and TQM (Total Quality Management) is that while TQM focuses on the improving the entire business operation system, CRM is more concerned with building and maintaining relationships with existing and new/potential customers. TQM can help a company in reducing wastage of resources and controlling costs by identifying areas of improvement and adding more value to the business processes. The end result would, however, lead to satisfaction of customers only. Similarly, relationships with customers can be enhanced only if they provided are with products/services that meet their requirements. Therefore, both TQM and CRM are related to each other and go hand in hand. While the focus of both may be slightly different, the end result is to achieve customer satisfaction and loyalty.

As I have worked with a manufacturing company, I have seen a lot of inventory of raw materials that gets accumulated because of inaccurate planning/ordering. To overcome this issue, I would have implemented JIT (Just in Time) inventory system which is considered a part of TQM. This system involves procurement of raw material as and when there is a need, thereby, reducing the costs associated with holding and maintaining inventory. To achieve this, it would be important to ensure that the suppliers have the capacity to provide sufficient inventory as and when required by the company. Thus, stronger relationships with suppliers and transport companies (which will transport materials from suppliers) is also required.

Once, implemented, I would inform the customers about the benefits of JIT and how it will provide additional value to them (in terms of lower costs). This in turn would help my company to establish strong relationship with its customers. Lower costs with high quality would further help in retaining customers and achieving long term customer loyalty.