ECR – A Framework For An Agile Supply Chain


by Greg West, Farthing West Chief Brilliance Officer

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Efficient Consumer Response (ECR) is an approach that is focused around creating strategic partnerships in the grocery industry. It is focused on providing higher value to the customer, including providing better convenience, better products, better selection and better quality.

J&J and P&G are examples of companies that embraced the concept, with P&G reporting higher margins, faster category turnover and greater market share from implementing the strategy.

ECR is typically focused on four areas:

  • Efficient store assortment by providing a complete, easy-to-shop assortment of products desired by the consumers,
  • Efficient replenishment by maintaining high in-stock levels of the required assortment,
  • Efficient promotion by coordinating the promotion activities between manufacturer and retailer by communicating benefits and value, and
  • Efficient product introduction by developing and introducing new products that the consumers really want by meeting their ultimate needs.

One of the key strategies to achieve efficient consumer response is through tracking demand and making just-in-time deliveries.

To  achieve effective replenishment requires good demand management tools that provide accurate data and facilitate collaborative decision making. These tools are often referred to as advanced planning solution (ASP) tools.

It is worth investing in these tools as the majority of the savings from implementing ECR typically comes from the efficient replenishment and efficient promotion strategies. Two key focus area of APS tools.

It is also worth pointing out that efficient replenishment and efficient promotion along with new product introduction are all key focus areas of a mature, well designed, S&OP process. Investing in S&OP pays handsomely.  Additionally, an investment in advanced planning solution (ASP) tools will assist in the development of a mature S&OP process.

In today’s rapidly changing supply chains it is essential that your business is focused on providing value to customer.  ECR provides a framework to achieve this within the grocery industry.