Operating principles of ECR
ECR is all about, "Working together to fulfill consumer wishes better, faster and at less cost".
The two fundamental principles that guide all ECR efforts are:
- Collaboration: Recognition that the greatest consumer value can be offered only when organisations work together, both internally and with their trading partners, to overcome barriers that erode efficiency and effectiveness.
- Focus on Customer Experience: A commitment to the belief that sustained business success stems only from providing consumers with products and services that consistently meet or surpass their demands and expectations
To accomplish these aspects of ECR, three focus areas can be distinguished :
Category management : Here the objective is to maximize the effectiveness of the demand creation process. This comprises:
- Product introductions,
- Product promotions and
- Store assortment.
Product replenishment : The focus here is on ensuring on creating a physical Supply Chain that is flexible and responsive enough to react quickly to changes in demand. Rapid and efficient product replenishment contributes to cost savings through minimizing the amount of inventory in the system while meeting required service levels.
Enabling technologies : Effective collaboration requires efficient data sharing between Supply Chain partners. Enabling technologies are focused predominantly on development of data management and processing capabilities that are needed to permit the rapid communication of accurate and timely information between trading partners. Recommendations include-
- Global Data Synchronization (GDS) : A global, internet-based initiative that enables organisations around the world to exchange accurate, up-to-date, standards-compliant Supply Chain information. By improving information accuracy, companies will be able to reduce costs and improve the efficiency and performance of their business processes, such as inventory management and replenishment, order reconciliation and new product introductions.
- Electronic Data Interchange (EDI): It is needed to easily communicate and manage orders, deliver, invoices and payments, both within a company and between the company and its trading partners. EDI allows business partners to perform transactions with great speed and accuracy.