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Information flow in Quick Response systems – a case study

The paper was presented at the International Logistics Conference “Logistics 2002 – Flexible supply chains – concepts, experiences, challenges”. Poznań, May 14-15, 2002.

1. The concept of Quick Response and its historical development
Among the many concepts stimulating the development of modern logistics, Quick Response (QR) systems have the longest history of development. They emerged at the turn of the 1980s and 1990s. Their creation was undoubtedly influenced by the following factors:
– the drive to integrate two key functions of the enterprise, which became marketing and logistics during that period [3],
– the increasing importance of the delivery cycle in competition between enterprises. This phenomenon was first noticed in the sphere of production [2]. The dependencies identified in this area were then attempted to be transferred to other areas of the enterprise’s operation.
– changes in customer behavior. At that time, these concerned in particular markets strongly influenced by fashion and random phenomena such as weather (clothing, food, home furnishings markets). They led to greater demand differentiation and strong fluctuations over time. They hindered or even excluded operating according to the previously used model of creating seasonal stocks to cover anticipated future demand [8].
– positive experiences and significant effects achieved in connection with the application of the Japanese-based Just-in-Time concept in production [9]. The peak of interest in JiT in production occurred in the 1980s. In the 1990s, attempts were made to transfer the gained experience to the sphere of physical distribution as well.

The effect of all these factors was the creation of Quick Response Systems, analogous to JiT systems, but functioning in the sphere of product distribution. In this approach, one can see analogies to the previously known solution “distribution requirements planning – DRP”, which consisted of using the material requirements planning (MRP) method used in production for distribution needs. However, it was quickly realized that this way of proceeding actually requires the integration of all subsystems in the flow chain of goods – starting from procurement, through production and physical distribution (including transport and inventory) to marketing, which took over the role of the link controlling the flow of goods. Adopting the principle that the flow of goods is triggered only when an identified (not forecasted) demand occurs and in a quantity exactly corresponding to the demand, forced changes in the operation of every link in the flow chain of goods and placed the problem of ongoing coordination of these links on the agenda. Both were to be ensured by an information flow adapted to the needs of the new operating model, both within the organization and between organizations.

On an intra-organizational scale, attempts were made to develop an information and IT system standard that met the needs of the QR concept. In the sphere of inter-organizational contacts, it was based on Electronic Data Interchange (EDI) [1, 7].
Evaluating what was happening around the QR concept, in retrospect, it can probably be said that at the turn of the 1980s and 1990s, the proposed solution was too innovative. Electronic Data Interchange (EDI) systems and the information transmission infrastructure available at that time were far from ideal. An information and IT system standard for an enterprise that meets the needs of QR has probably not been created to this day. The sphere of production also turned out to be a weak link. Despite the use of new technological solutions, such as the fabric introduced by Benetton, which could be dyed to its final color only in the final phase of garment production, the postulate of economical manufacturing of individual products meeting clearly specified customer requirements turned out to be merely a wish in many industries. Despite the positive effects achieved by the developed and implemented deployments (cf. item [4] p. 180 and fig. 7.11), QR remained a niche solution, and interest in it waned as early as the first half of the 1990s in favor of other concepts – supply chain management and ECR.

Full article in PDF format.

Ref-10.pdf