ECR - Efficient Consumer Response Australiasia

Business Background

To quote from the 1999 Grocery Industry Tracking Study "The role of activity-based costing in ECR is to understand the likely cost impacts of new ways of doing business. However, the results of this study indicate that there has been relatively little progress with activity-based costing". The report recommends that an industry body provide a focal point for solving common industry issues, such as the use of activity-based costing (ABC) to support joint decision making. In view of the lack of progress to date in ABC, this project will focus on evaluating and using a methodology for assessing the cost and profit impact of ECR initiatives which will be accepted and trusted by manufacturers, wholesalers and retailers. The methodology and supporting tools to be evaluated have been developed by the European Profit Impact of ECR Task Force and supporting consultants and published by ECR Europe in May, 1999, following extensive trialling. The methodology and tools are applicable along the supply chain from raw material supplier to check out.

Objective

Evaluate and trial a methodology for the pre- and post-implementation analysis of the cost and profit impact of ECR initiatives, which can be used jointly by manufacturers and retailers/ wholesalers, to ensure that manufacturers, wholesalers and retailers have a mutually trusted, sufficiently accurate, cost effective means of assessing proposed joint ECR initiatives. ECR initiatives can then be entered into jointly by trading partners with substantially increased confidence in the expected costs and benefits to each party and in the expected net benefit potential to the consumer.

Project Team

Report

"The Profit Impact of ECR"