WINDSOR, England (FNS) -- The Efficient Consumer Response initiative may be the right way to go in United States today.
But in the United Kingdom, food retailers already have surpassed many of the goals set under the ECR program, according to Richard Williams, supply chain director of Argyll Group, the owner of Safeway in the United Kingdom.
Williams, in a speech to a CIES Logistics Management Program seminar here, said U.K. retailers are substantially ahead of their U.S. counterparts, for example, in implementing integrated supply chain management. CIES, based in Paris, is an international association of food retailers and suppliers.
Williams also warned that differences between food retailing worldwide might limit how much of an impact ECR can have outside the United States, particularly in such areas as price promotions.
In efficient replenishment, for instance, Williams said achieving the U.S. savings target of 4.1% of sales depends on where a company or industry outside the United States already stands in implementing it.
"It is essential to read the savings projected by the ECR program in the context of the way the U.S. grocery market currently operates," he said.
"In the U.K., many of the leading retailers are already substantially down the road of implementing sales-based ordering and are now looking to use sales-based ordering to drive the warehouse replenishment systems. In addition, experimentation is already starting to take place with the cross-docking of fast-moving ambient goods."
The ECR outline also projects a cut in dry grocery inventory levels to 61 days from 104 days, with about two-thirds of this coming from an efficient promotions strategy, Williams said.
But the average for the U.K. industry already is at or below this target, with the leading retailers averaging only 56 days of inventory.
However, Williams said, the U.K. industry still can realize significant savings from full implementation of the ECR plan, provided businesses make the organizational changes required and several issues are resolved.
These include: the trend by food manufacturers to consolidate production points, which can lengthen the supply chain; vendor replenishment; how to retain a competitive relationship with suppliers while at the same time working more closely with them; shared warehousing between producers and retailers, and how much shipment sizes and lead times can be cut to allow cross-docking on a large scale.
"I don't think ECR has all the answers," Williams said. "Nor is it a win-win situation for all participants. The key is to make sure you're not one of the losers."