Challenges and Key Benefits of ECR
Implementing ECR means dramatic change in current business practices
ECR is about redesigning the processes, altering paradigms and changing attitudes. Proper management of the ECR process is effective in mitigating resistance and increasing co-operation. A clear communication by top management of the benefits and rewards of ECR will make the process more effective.
ECR challenges many existing approaches, which can often lead to inefficiency. Trading partners are asked to work together in order to increase value to the consumer. The intensifying competition amongst trading partners often presents an apparent barrier to achieving this. However, just the opposite is true – ECR allows companies to seek a competitive advantage by demonstrating their superior ability in working with trading partners to add value for the consumer.
In 2004, ECR Europe was preparing to celebrate its 10th anniversary. The ECR Europe Board commissioned a study – The Case for ECR. The purpose of the study was to review ECR achievement in Europe, to report the progress which had already been made and to estimate the further benefits which could be achieved. In the report presented here you will see that:
- Since 1995 3.6% of consumer sales value has been saved through successful ECR adoption in Europe or a €18 billion benefit in cost and inventory reduction
- A further 3.3% of retail sales value could be saved by full adoption of ECR ,a €28 billion benefit in cost and inventory reduction by adopting fully ECR business practices
- Potential sales growth of 5% - €42 billion - is available by better meeting shoppers and consumers needs through new product, improved information and service offerings in store.
- Top tier ECR adopters enjoy 6% better service levels, 5% higher on shelf availability and 10 days lower finished goods inventories than low or non adopters of ECR practices.
- The Case for ECR - A Review and Outlook of Continuous ECR Adoption in Western Europe,
- By ECR Europe, ECR Academic Partnership and IBM Global Business Services (2005).
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