What is the full form of ECR?

Introduction

Efficient Consumer Response (ECR) is a business strategy for the retail industry which increases the level of services towards the consumer. Under this there is close cooperation between the retailers, wholesalers and the manufacturers to improve the efficiency of the supply chain.

The companies who formulate the supply chain see a decrease in losses as three of them (retailers, wholesalers and manufacturers) don't have their separate goals. The end goal of ECR is to optimise the supply chain to its fullest.

How did ECR start?

It was created by an industry in the United States of America with the aim to gain its competitive strength in the early 1990s. The initiative was started as a result of various studies that stated the price of end products can be reduced if manufacturers and retailers work together. Thus a council was made in 1992 named as EfficientConsumer Response CouncilThe council made some guidelines and the movement later was spread across the world.

Supply chain optimization

The use of ECR in the supply chain has resulted in wonders. The focus is kept from raw materials to logistics. An organisation’s supply chain’s efficient working is a must for a good consumer experience. It makes the best use of technology. The inefficiencies are eliminated to improve the flow of goods.

• Trading partners should work together to improve the supply chain and also to reduce the chances of loss

• To ensure that the products are always in stock the trading partners should use the technique called Effective Replenishment.

• Regular improvement can be seen if the data is analysed collectively.

Category management

The sales data is analysed to understand the customers’ demands and various trends. This information is later used for assortment of the products, pricing and promotions.

It helps to analyse the consumer needs, which products are selling well and which are not. Retailers and suppliers should work together to understand the trends. It also helps the supplier to reduce the inventory cost and increase product sales.

Technology implementation

The incorporation of different technologies in the working of any organisation results in better productivity and efficient work. The technologies can be in the form of AI, software or hardwares. Technology can also be used to improve communication between retailers, wholesalers and manufacturers. The data analysed because of technology can be used to decide the production, promotions and change in trends. To understand the customers buying habits, the retailer can use the point of sale data. .

Collaboration and Partnership

It also includes Forecasting and Replenishment and is collectively acronymed as CPFR. In this process retailers and suppliers work collectively and try to forecast the demand so that production, inventory and distribution can be planned. It also helps to reduce the chances of bullwhip effect i.e. small change in the demand of consumers leading to large fluctuation.

Conclusion

ECR was developed in the 1990s and has evolved a lot. It has taken many other points into consideration for example sustainability. Implementing ECR will only work if every stakeholder trusts each other. They should work efficiently and together. ECR has transformed its way after the addition of technology to it.

FAQs

Q1. What are the challenges against ECR?

Ans: The major issue can be lack of trust between the retailers, manufacturers and wholesalers which is required for collaboration as sometimes sensitive information is needed to be shared. Some may also resist change as it is difficult to manage and sometimes the employees can also retaliate against the new practices.

Q2. State few benefits of implementing ECR.

Ans: ECR benefits every stakeholder involved. It increases the customer satisfaction and product availability. As the information is shared, the analysis of customer and customer buying habits become more thorough and reliable. It helps to create a more efficient supply chain.

Q3. How can companies reduce waste with the help of ECR?

Ans: As there is transparency in the supply chain the stakeholders can identify the areas where waste production can be reduced. The stakeholders can also find w.ays to save energy