Efficient consumer response (ECR) model is a strategic idea developed by the processed food distribution industry in the United States to recover the competitive strength of a company. The main aim of the ECR model is to raise the level of services to consumers through close interaction with manufacturers, retailers, and wholesalers. The company that incorporates the ECR model into its operation is likely to increase its profits as compared to those that pursue their own business goals (ECR Central 2007). The company is also likely to increase its aggregate channel performance as compared to administering the channel in a separate way such as through pure market exchange.
The ECR model has numerous advantages especially for members in the supply chain. One of the advantages is enhancing efficiency in the supply chain. In addition to improving efficiency, the Efficient Consumer Response minimizes time and further minimizes costs in the main, value-adding processes of the grocery chain through efficient replenishment, efficient promotion, efficient store assortment, and efficient product introduction. Efficient product introduction ensures that stakeholders collaborate to create better products quicker and less expensive (Aastrup et al 2008). Efficient promotion ensures that both consumer and trade promotions are utilized by supply chain members.
Delegate your assignment to our experts and they will do the rest.
On the other hand, efficient replenishment provides the right product at the right time, to the right place, in the right quantity as well as in the most appropriate manner possible. Finally, efficient assortment assists the supply chain members to minimize costs. It is therefore important for companies to compose a supply chain that minimizes opportunity loss, levels of inventory, entire cost as well as heighten monetary profitability by sharing the goal of customer satisfaction.
For the success of the ECR, several prerequisites need to be considered for efficient implementation. One of the prerequisite required for the success of the ECR is education. Education enables companies to set a clear roadmap to effectively get involved in the ECR model. Education ensures that correct execution of all activities and programs. To add on, sufficient education assist companies to set a clear vision of what ECR can achieve. Education and training of the company personnel also provide new skills that are needed for the implementation of ECR. Management involvement is another prerequisite that is needed for successful implementation of ECR. According to Frambach (2013), management involvement provides enough support that is primary for the ECR program success within the company. With management provided support, the required resources needed for ECR implementation can be obtained easily.
Another important prerequisite needed for the implementation of the ECR is communication openness. Since the ECR embraces all stakeholders in the supply chain, companies need to shift from the conventional adversarial relationship and move to collaborations with a trading partner for mutual benefits. Communication openness within the company plays a significant role in the implementation of the ECR through information sharing. Apart from communication openness, competitiveness is another prerequisite that a company needs for the successful implementation of the ECR. As indicated by Reyes and Bhutta (2015), competitiveness helps the company to look back and reflect on past achievements creatively and innovatively. By involving competitiveness in the ECR implementation, the company can shape its future by relying on previous achievements.
Conclusively, it is significant for companies to implement ECR in their operation because it has numerous advantages. Some of the advantages associated with ECR include improvement in the efficiency of the supply chain and costs reduction. The ECR also ensures efficient store assortment, efficient promotion, efficient replenishment, and efficient product introduction. Apart from its advantages, communication openness, education, management involvement, and competitiveness are significant prerequisite those are required for the successful implementation of the ECR model. It is therefore important for companies to put this kind of prerequisite into consideration when implementing ECR.
References
Aastrup, J., Kotzab, H., Grant, D. B., Teller, C., & Bjerre, M. (2008). A model for structuring efficient consumer response measures. International Journal of Retail & Distribution Management , 36 (8), 590-606.
ECR Central (2007). Efficient Consumer Response. Retrieved from http://www.ecr-cenral.com/ on 21 August 2019.
Frambach R T (2013). An Integrated Model of Organizational Adoption and Diffusion of Innovation. European Journal of Marketing, 27(5), 22-41.
Reyes, P. M., & Bhutta, K. (2015). Efficient consumer response: literature review. International journal of integrated supply management , 1 (4), 346-386.
