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Saturday, 4 May 2024, 6:28 PM
Site: Bcom International Supply Chain Management
Course: Bcom International Supply Chain Management (IMM)
Glossary: SCS Glossary

Customer Exits

Part of managing a key account is the ability to know when to adopt, and similarly when to retire an account. A company with an unmanageable portfolio, since inappropriate customers have not been cleaned out, simply drains company resources, and ultimately profitability. There are two options for customers who should leave the portfolio: they should either be exited to customer tier below, or they should be completely exited, and their business lost to the supplier. When the choice to exit the customer to the below tier is done, the customer could be carefully and slowly withdrawn from company resources, as not to notice the change in key account status.

Resource Allocating

This is the process of assigning resources to a task, client etc.

Relationship Stages

KAM is concerned with managing the relationship with the customer, with the goal being business development, and making profit for the company. Hence, it is important to understand these relationships, and to understand the hierarchy of different relationship levels. Relationship stages refere to the level of the relationship; Basic Cooperative, interdependent or integrated.

Key Relationships

Important relationship.

Relationship Hierarchy

Relationship hierarchy is the levels of a relationship, it is a system in which members of the relatioship is ranked according to relative status or authority.

Exploratory Relationship

The exploratory stage is the earliest stage of relationship development before trading begins. Woodburn and McDonald (2011) describe it as the investigation and development or understanding stage, where the potential of importance of the relationship qualifies the customer as a future key account.

Integrated Relationship

In an integrated relationship the two parties come together to operate as a single entity, while maintaining their separate identities, to create value over and above what either could achieve individually.

Interdependent Relationship

As explained by Woodburn and McDonald (2011), in an interdependent level the organisations collaborate across a range of functions. Interactions are orchestrated and managed by a key accounts manager whose role is to manage the relationship, and ensure that nothing discredits the partnership.

Cooperative Relationship

The cooperative relationship is more of a network, although it a loose one. More people in the supplier’s organisation are getting involved with the customer, not only the key accounts manager.

Basic Relationship

At the basic stage, neither party feels particularly committed to the relationship. The business is based on a simple exchange of money for goods and services supplied. There is no extra value received or perceived by the buyer, and the supplier is aware of this.