What does ECR

Efficient Consumer Response (ECR)

1. Term: Strategic concept in the consumer goods industry in which all partners work together to optimize the value chain. Efficient Consumer Response (ECR), i.e. the efficient reaction to customer demand, summarizes various management methods that aim to make supply chains efficient and geared to the needs of consumers. Specifically, manufacturers and retailers act jointly with the customer as a starting point and orientation point as well as under the main objective of “cooperation instead of confrontation”. In this way, potential benefits should be developed for all those involved that could not have been achieved alone.

2. Aim: Reduction of inefficiencies along the value chain (logistical aspect), development of sales potential (marketing aspect).

3. Elements: a) Electronic Data Interchange (EDI), i.e. an automated, standardized, timely and paperless exchange of information between manufacturer, trading center (central warehouse), branch including point of sale (POS);
b) Cooperation in logistics (supply chain management): consistent replenishment of goods tailored to the actual sale due to automatic disposition (possibly through vendor managed inventory = supplier-managed stocks), synchronized production, just-in-time delivery, delivery to central warehouse and Sorting of prepared store pickings and delivery (cross docking), optimization of transport and loading capacities through coordinated loading units, storage and transport technology (Efficient Unit Load) and thus lowering of logistics costs (through optimal use of transport capacities, reduction of process times and effort) . Reduction of capital tie-up costs by reducing inventory (continuous replenishment) at the manufacturer, in distribution centers and at the retailer as well as increasing product availability at the point of sale; Cooperation in marketing through customer- and profit-oriented product range design and product presentation (Efficient Assortment), optimization of product launches through comprehensive information exchange in new product planning and product launch (Efficient Product Introduction), joint, target-oriented planning of sales promotion campaigns (Efficient Promotions) and
c) an organization that enables value-oriented, partnership-based coordination of the interests of product group managers in industry and goods group managers in retail (category management).

4. Problems: Necessary investments in IT systems, disclosure of (previously internal) data with the risk of data misuse, qualification of staff, recognition of synergy effects of teamwork, both between the product group managers and between the product group managers in trade with the product managers and key account managers in the industry, difficult System-immanent potential for conflict between industry and trade to be resolved.