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ECR – why so few implementations

The concept of Efficient Consumer Response (ECR) was created thanks to voluntary initiatives by independent business entities in the USA in the early 1990s. Pioneers in implementing ECR included companies such as Procter & Gamble, Colgate, Unilever, and Beiersdorf. Through large international companies, the ECR idea was brought to Europe. In 1994, the ECR Europe Executive Board was established. Its members include Nestle, Tesco, Coca-Cola, Unilever, Henkel, Jacobs Suchard, Rewe, and Johnson & Johnson. The greatest interest in the ECR strategy is shown by enterprises in countries with a high degree of economic development. However, as a result of the progressing globalization of economic processes, the ECR strategy is beginning to cross national borders and has recently been disseminated in Poland as well (partly thanks to the activities of the ECR Poland Club, assisted by ILiM and EAN Poland).

Despite examples of satisfactory application of ECR or its elements by some companies, research conducted, improvements and development of this concept, and awareness of the benefits that its application entails, it is received critically in Polish realities. And, surprisingly, by practitioners. In Poland – as abroad – the ECR strategy is most popular in the grocery industry and is also beginning to be noticed by representatives of the pharmaceutical industry. In general, however, managers do not speak enthusiastically about the use of ECR. The reason may be a lack of approval from superiors, a lack of professional knowledge supported by experience, or reluctance caused by numerous problems associated with implementing ECR. Here are some observations regarding possible reasons for the negative attitude, related to the features of the concept itself.

ECR is not just: Efficient Replenishment, Efficient Assortment Management, Efficient Promotion, and Efficient Product Introduction, but also numerous tools, techniques, and programs. For example, a technology supporting ECR is Electronic Data Interchange (EDI). Data exchange using EDI requires: appropriate hardware and software solutions at the ends of telecommunication links, standard messages (according to the UN/EDIFACT standard), and an information carrier, e.g., a Value Added Network (VAN). Furthermore, EDI systems should be connected to Electronic Point of Sale (EPOS) systems; Electronic Funds Transfer (EFT), which involves the transmission of financial data, is also associated with EDI. The ECR system cannot be bought as a simple package. Many companies are discouraged from the very beginning, assessing the change process as too complicated. Training, reorganization of traditional business structures, implementation of new performance measurement systems, and the development of partnership alliances between supply chain participants are just some of the activities associated with introducing ECR.
The article comes from the magazine “Logistyka” 3/2004.

L2004-3s60.pdf