Group Assignment Moore Medical Corporation

Q. 1 Which new information systems, if any, should Moore purchase Q.1 Which new information systems, if any, should Moore purchase? How did you arrive at this decision? Moore’s has the following options: Option 1: CRM (Customer Relationship Management) from Clarify It has comprehensive set of tools for managing interactions with sales prospects, customers, and clients. Focus is on sales and customer relationships. Integrated records will help to bring together customers from every channel. It is expensive, but has greater impact Option 2: J.D Edwards ERP (Enterprise Resource Planning) add-on modules (Bolt-Ons) The bolt-on will solve the problem with existing system such as bid and quotes inefficiency, lack of marketing functionality, over-complicated order entry, new account setup difficulty, and weak forecasting. This will be done by adding three modules to demand planning system: Warehouse transfer system, deal management and module with ability to do stock simulations Option 3: Combination of CRM and Bolt-Ons This would require huge amounts of adaptation and acceptance from internal users and would be expensive We think that Moore should currently go for Option 2: Bolt-Ons. This would solve all the short term problems that Moore is facing in a cost effective manner. Implementation of CRM can done in the long run, once all the existing problems are solved.

Q2. What are the most important things that Moore does not know about its customers at the time of the case? What are the best ways for the company to obtain this knowledge? Moore’s practitioner customers included general physicians, podiatrists, rescue squads and emergency medical technicians, industrial sites, schools/universities, government facilities and correctional facilities. Moore did not fully understand why penetration rates and shares of wallet were so different across customer segments. One way to understand this could be carrying out a market research and getting customer insights. Moore must also include capital equipments in its portfolio in order to increase the wallet share Moore did not understand why some of its customers left. Churn rate of Moore was high (30% as compared to industry average of 25%). Company must analyse why the customers are leaving and study potential reasons such as price sensitivity, loyalty, inability to become a single source for all medical purchases etc. Moore could not fully forecast customer requirements as only 68% of its orders were perfect orders. This can be achieved by having a better and robust demand planning system in place.

Q3. What are the pros and cons of Moore's move into e Commerce / online ordering? Do you agree that this was a good move for the company?  Pros Cons New customers attracted by the website accounted for 13% of the online orders and these customers were from a completely new segment for Moore, individual consumers, and better yet the company projects this market to account for $500,000 within in the next year Might even be more expensive if Moore Medical does indeed decide to hire two or three additional programmers at $75,000 to $100,000 each to continue to update the site Sales representatives were trained to walk customers through the site initially, which will lead to less reliance on these sales people in the future and the department may be downsized to save on labour costs It is an impersonal selling tool and some customers may not find it has added value to them, which could result in additional “churn” It is a time-saving ordering system for customers An expensive investment at a time when the company did not have any extra funds for projects and in fact caused Moore to not be profitable in 2000 A full catalogue has been added to the website, which is a savings to printing costs This investment should be credited as one of the best investments that Moore Medical ever made on several levels considering that the pros are outweighing the cons. The company was known to have a strong tradition of accurately and quickly filling customer orders and this investment promises to continue this tradition in the future. Hence I agree that this was a good move for the company. Customers have the ability to shop at their leisure and compare and contrast products and costs on their own 87% of the customers ordering from the site were converted from other channels, saving time for salespeople Since the introduction of the site, the number of orders per month grew from 1,423 to 2,218, translating to an increase of over $220,000 per month in additional income