Efficient consumer response in Japan

Industry concerns, current status,

benefits, and barriers to implementation

Presented By:
Syeda Saba Najam Bukhari
Muhammad Hamza

Introduction

Efficient consumer response (ECR) is a grocery industry strategy aimed at making the
supply chain more competitive and bringing greater value to the consumer

Since 1993, ECR has been successfully adopted in the United States and many
international markets

ECR is becoming increasingly popular because it is viewed as a means of transforming the
supply chain to cost effectively meet the demands of a new consumer-pulled
distribution process
Advantages of ECR
ECR decreases time and eliminates costs
Through four specific strategies:
1) Efficient store assortment: Range of products carried by a retail store satisfy the
consumer needs and utilize the store space efficiently
2)Efficient replenishment: Aims to provide
- The right product
-To the right place
-At the right time
-In the right quantity
3)Efficient promotion: Trade promotions and consumer promotions must be efficient
4)Efficient product introduction: Participants of supply chain must develop better products
quickly and cheaply

Industry Concerns
Industry concerns are a good indicator of the changes needed
5 main concerns of the respondents
Operating costs
Efficient Operations
Competition
Use of information technology
Employee training



Current status
Retailers started considering ECR early

Wholesalers started late but are catching up fast

Manufacturers are yet to implement ECR properly (80% rejected ECR)

Manufacturers are lacking behind because ECR
- Consumer-forward strategy most likely to be driven by the retailer
Perceived Benefits
1)General benefits
-Efficient logistics between channel members
- Closer relationships between channel members
-Reduction in the time between billing and payment
-Establishment of a paperless system
-Elimination of excess costs
2) Benefits related to Efficient replenishments
Barriers to implementation
Japanese retailers lack the expertise and technological capabilities
Attitudinal concerns of wholesales, retailers and manufacturers toward working
together
Lack of leadership and information sharing among channel partners
solutions
Conservative attitude of managers and the traditional business practices
One possible way to overcome this barrier is to provide case studies of firms who
have benefited from adopting ECR
Reliance on outside institutions has made it easier for japanese firms to adopt
new technology


Reasons for not implementing ECR
48% of the respondents had trouble understanding ECR

Uncertain about the future of ECR

Lack of technological capabilities

Lack of technological standards

Shortage of skilled people