ECR - Efficient Consumer Response
Efficient Consumer Response originates from the Anglo-American area and means "efficient response to consumer needs." It is a strategic management concept that is responsible for optimizing the entire supply chain, taking into account the needs of customers.
Brief description
The Efficient Consumer Response concept was developed in 1992 in the US by the food industry and reached the European area through representatives of the consumer goods economy ("Executive Board of ECR Europe"). Today it is also represented in many other economic sectors.
Three modules can be derived from ECR considerations:
- logistics module
- marketing module
- technology and engineering
The logistics module brings together all the optimization arrangements under the term "Supply Chain Managements."
The assumptions of this module are:
- Continuous and Efficient Replenishment, which stands for continuous and efficient delivery of goods. This premise should be understood as a filling strategy, where POS (Point Of Sale) plays a momentous role.
- Cross Docking (CD) is concerned with minimizing execution time and creating capital in the Supply Chain, and thus attempts to eliminate excess inventory.
- Synchroniczna produkcja (SP) ułatwia planowanie i kierowanie produkcją (PPS), przez co osiąga oszczędność kosztów i uniknięcie błędnego oszacowania.
- Supplier integration makes it possible to integrate suppliers into the production process, which subsequently results in a shift of resource responsibility to the back end.
The marketing module of ECR is also known by the term Category Managements (CM), which is divided into the following areas:
- Efficient Product Introduction (EPI = Efficient Product Introduction) or Efficient Product Development (EPD = Efficient Product Development) describe the maximum increase in efficiency in the development and launch of new products.
- Efficient Store Assortment (ESA = Efficient assortment shaping at the subsidiary level) is carried out for the purpose of optimizing the productivity of inventory and space at the Point Of Sale (POS) en route to the end consumer.
- Efficient Promotion (EP = Efficient Sales Support) achieves alignment of sales support activity between the merchant and the manufacturer, and thus alignment of costs.
ECR Technologies and Techniques, also called Enabling Technologies, support Electronic Data Interchange (EDI), Electronic Fund Transfer (EFT), Scannern, EAN-Code, Benchmarking, Acitivity Based Costing and Business Process Reengineering.
Tasks and objectives
The goal of ECR is that through partnership and trustful cooperation to achieve all stages of the value-added chain (from the producer to the buyer), to achieve an increase in the efficiency of the flow of goods, and thus offer consumers the optimum in quality, service, product variety.
With the help of the reorganization of the workflow, the ECR goals should be achieved. In order to uniformly shape the transformation, European and country-specific standards were created, and these were fixed in writing as a lexicon or other scientific work.
Features and assumptions
The following features of ECR can be derived:
- trustworthy cooperation between manufacturer and buyer
- internal and external data exchange
- customer orientation
- optimization of the value-added chain
The conditions for successful ECR work are:
- management level involvement
- conducting the Benchmarking process
- pilot projects
- training of colleagues
- multifunctional groups
- cooperative orientation
Benefits
- Shorter delivery times and greater certainty in supply thanks to high quality forecasts
- Reduction of transportation, packaging and grouping costs through efficient juxtaposition of goods
- increase the quality of forecasts
- Better planning of specific sales support measures
- Reduce erroneous deliveries and the costs associated with those errors
- Reduce the impact of the bullwhip effect through better information in the logistics chain
Disadvantages
- Investment costs for integrated software and hardware
- Increased handling and operation, and thus less integrated systems between customer and supplier
- high volume of reconciliations by missing Exception Handling
RELATED TERMS
-
OSA - Optimal Shelf Availability
- Category Management
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