NEW YORK -- Leading food distributors have dramatically increased their involvement in Efficient Consumer Response in the last six months, according to a study by Meyers Research Center here.
The survey also found significant gaps between accepting ECR theory and practicing it. ECR refers to a group of business practices that lead to a less costly and more efficient flow of products through the distribution pipeline. Meyers' TradeSmart Survey conducted in June showed that 45% of supermarket chains and wholesalers contacted said they were involved with ECR to some extent, compared with 27% of retailers and 17% of wholesalers in November 1993.
Of the 16% of retailers and 3% of wholesalers who said they currently had no plans to pursue ECR, many were actually involved in various practices that are generally considered "part and parcel of ECR," said Arthur Zimbalist, vice president of Meyers.
For example, 59% of those with no plans to pursue ECR were engaged in contract pricing, 55% in space management programs and 51% in computer-assisted ordering and electronic warehouse receiving.
Responding to this disparity, Zimbalist said, "They say they're not doing ECR, but guess what? They're doing a lot of elements [of ECR], but either they don't understand the word 'ECR,' or they don't want to understand the word 'ECR,' because they're really participating in it anyway.
"I think the bottom line is that ECR is not simply a set of specific practices, but a mind-set. Everybody's mind-set is different," he continued.
Buying and merchandising executives from a nationally representative sample of the top 100 grocery chains and the top 25 grocery wholesalers were contacted for this survey. Zimbalist said the sample represents 30% to 40% of the total supermarket all commodity volume.
Among those who admitted pursuing ECR, space management was the strategy most commonly practiced, by 69% of respondents. Computer-assisted ordering was second (67%), and cross-docking and contract pricing were third (61%).
"Everybody is picking and choosing what seems to be the more appropriate area of ECR that suits their purposes. They're participating on an as-needed basis," said Zimbalist.
Category management was considered the greatest benefit of ECR, cited by 31% of respondents, followed by lower costs and higher profits (25%) and operating efficiency (22%). Improved vendor relationships were mentioned by only 7%. Although 64% of those polled said they perceived ECR as having no disadvantages, some did point out obstacles that may hinder their pursuit of ECR. Reductions in trade spending was the factor cited by 10% of the respondents as a negative effect of ECR, followed by problems at retail (9%) and time and money investment (7%).
Retailers and wholesalers had concerns about their implementation of ECR, but most did not view that as major a issue. Their ability to interface with vendors' systems was a minor concern for 59% of the respondents and a major concern for 21%.
