Efficient Consumer Response (ECR) and Supply Chains

International Retailing industry though global originated and developed in Europe and US. Europe has been always been the harbinger of changes and evolution of Supply chain models operating in International Retailing as well as FMCG and other retail industries as well as automobile industry too. When the retail industry was ridden with problems faced in operations resulting in un co-ordinated and inefficient supply chains, long lead times, that resulted in inventory holdups and blockage of funds, there arose the need for detailed study involving all aspects of supply chain to address the industries needs.

ECR or Efficient consumer response was coined by the group of various industry associations who came together to engage with this study and take the agenda forward.

It was in the year 1994 that several European Associations including European Organisation for Retail and Wholesale Trade, International Article Numbering Association and Euro commerce as well as EAN International, Food Business Forum, CIES and European Brands Association etc joined the ECR initiative and commenced the supply chain re-invention exercise.

ECR studies have perhaps changed the course of supply chain both in Europe as well as in globally and been responsible for the series of changes and evolution of modern supply chain networks.

ECR studies aimed to provide a totally different view of the problems faced by the retailing industries.

Most significantly the study aimed to identify and involve all partners in the supply chain starting with raw material suppliers, the transportation and other logistics service providers engaged at various stages in the supply chain as well as all the players involved in the upstream value chain involving the wholesalers, warehouses as well as retailers and the domestic distribution service providers at multiple levels of supply chain activities.

The initial studies in Europe were carried out by Coopers and Lybrand in 1996 where in they identified fourteen areas for remodelling of existing supply chain operations and these were in turn categorised into three categories.

The unique outlook adapted by the study provided a totally new perspective to the way the industry worked.

ECR looked at the entire supply chain from the point of view of customer demand and the efficient response to the demand drive. Hereto the ruling concept was based on supplies and inventories were controlled by the suppliers. With the change in the concept, the paradigm shift that came about was to look at Product Replenishment in response to Demand drive and of category management to drive the entire supply chain process using technology as an enabler.

The study has focused on two major areas. One part of the focus went on to build solutions in Store formats, stores management, Customer promotion, New product launches and customer relation building while it also focussed on bringing about major changes in the backend supply chain involving transportation.

With the help of technology the new models of transportation including Unit Load Transport Optimization, Consolidation as well as Unit level tracking and identification have made the supply chain highly effective giving visibility and control over inventories at unit level.

ECR continues to grow from strength to strength as an Organisation and has become the global leader in guiding global supply chain initiatives. The annual conferences held in Europe are attended by thousands of professionals from all over the world. ECR aims to develop and disseminate best practices in supply chains.