The buzz words Efficient Consumer Response migrated into the UK management vocabulary some years ago, but the incentive to apply ECR principles in daily life got a shot in the arm when Wal-Mart acquired Asda last year. The US giant was the driving force behind the development of ECR, before it had even earned the name. In the past, UK multiples maintained links with several suppliers for any given product, which in turn generated the competition needed to optimise prices. By focusing their trading relationships on a smaller number of full range suppliers, buyers can drive down the cost of doing business, reduce supply chain costs and jointly develop ways of capturing market share by applying market research findings. Smaller companies run the risk of being squeezed out, accepting lower margins or being forced into strategic alliances with a full range supplier ­ in the second row. Reactive management is unlikely to win under these circumstances: by adopting the same underlying principles as the multiple buyers, suppliers can talk on equal terms. Some see this as a tremendous opportunity: "With a practical understanding of the aims and activities involved in ECR, companies can have more control of the trading agenda," says David Lavelle, head of the business strategy unit at Wye College, Ashford. Lavelle runs a course for food manufacturers in conjunction with the University of London's food industry management group at the college. Its first aim is to develop an understanding of how marketing can be applied across all aspects of the business. "Marketing is not an isolated function but an organisational culture referred to as integrated marketing," says Lavelle. By giving key managers a pragmatic understanding of ECR, it becomes possible to identify a starting point with key customers. "This is the hardest part and frequently overlooked. Applying the principle that the maximum profit is derived from stocking less, we get suppliers and retailers working together on exciting and high yielding projects," says Lavelle. {{TRAINING & DEVELOPMENT }}

Topics