ECR - Efficient Consumer Response Australiasia

The GISCC Lead

In 1996, Australian suppliers and retailers recognised that there were some basic steps to be taken to remove unnecessary costs, increase efficiencies and become more internationally competitive. Through the Grocery Industry Supply Chain Committee (GISCC), industry executives demonstrated that they could work collaboratively to provide a foundation on which trading partners could restructure their relationships. Chaired by Ian Brown, Unilever, and then by Graeme Allen, Nestlé, GISCC delivered:

• guidelines for trade unit numbers
• guidelines for product recall
• industry EDI messaging standards
• the technical development of the industry product catalogue, EANnet, and image library
• a universal buying form in both manual and software variations
• industry tracking studies and
• studies on pallet size, unit loads and the use of glue for load stabilisation.

Some 50 supplier, retailer and wholesaler representatives contributed to the work of GISCC and its working parties.

The Progression to ECR Australasia

Valuable as this work was, industry leaders recognised that these joint industry efforts needed a broader mission, a trans-Tasman focus, greater commitment from supplier, retailer and wholesaler CEOs and the provision of additional resources if they were to keep pace with global developments and better address the interests of their consumers.

Conceived at the Australian Food and Grocery Council's Highlands '99 forum, ECR Australasia acknowledges that many companies operate in both Australia and New Zealand and that there are substantial areas of commonality between the two countries. Rather than both countries acting independently, there is clearly a significant opportunity to develop joint initiatives and deliver mutually beneficial outcomes.

The Prize Remains for the Taking

The potential benefits in terms of cost reduction are substantial. In 1995 the grocery industry tracking study highlighted the opportunity for over $1 billion of savings by more efficient practices and a possible reduction in finished goods inventory in the supply chain of over $700 million. To date it is estimated that throughout the industry almost $300 million in operating cost savings have been realised and a further $300 million of finished goods inventory reduction has been achieved. However, with industry growth, the potential cost savings remain in excess of $1 billion and inventory savings at $750 million.

The ECR Prize

Source: PricewaterhouseCoopers, Australian Grocery Industry Tracking Study 1999

Through ECR, the consumer benefits with more efficient delivery of the right product more quickly and at lower cost. To that can be added the potential for improved information flows about the needs and buying habits of consumers and a quicker response to those ever-changing needs. That is the true ECR prize.