Midwest Decision Sciences Institute 2001 Annual Meeting - Dearborn, Michigan April 26 - 28, 2001

Efficient Consumer Response (ECR) and Just-in-Time (JIT): Different Concepts?

Alexandre Medeiros Rodrigues Michigan State University The Eli Broad College of Business Department of Marketing and Supply Chain rodri205@msu.edu
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Objectives (I)
Since the introduction of the concept in 1993, Efficient Consumer Response (ECR) continues to impact much of the grocery industry But, ECR has not yet fully realized its expected benefits. There is still a lack of integration throughout the supply chain One possible cause for this lack of integration is the need for the formally definition of the process

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Objectives (II)
Questions that still remain unclear:
Is ECR a brand new concept? What are the main differences and similarities between ECR and other time based efficiency concepts, like Just in Time? Is there the possibility to unify these concepts, developing essential characteristics of all these systems?

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Objectives (III)
Literature review to investigate the main differences and similarities between Efficient Consumer Response (ECR) and Just-in-Time (JIT) Effort to unify these time based efficiency concepts

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Methodology
Literature Review: main characteristics of ECR and JIT concepts were reviewed Comparison between the two concepts was conducted Proposed framework was developed to highlight the similarities and differences and to attempt to unify both concepts

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Efficient Consumer Response (ECR)

(1) Consumer driven, react dynamically (1) Ensure continuous improvement of consumer satisfaction, products and quality (2), (3), (4), (5) Reduction of both costs and response times
Cost: product categories and ABC costing Times: automation of information flows and product flows elimination of redundancy decreases overall inventory

(2), (6), (7), (8), (9), (10) Planning and decision should be made in a collaborative way at the supply chain
better relationships Information sharing reduce variances and uncertainties need of measurement

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Just in Time (JIT)

(1) Response to market needs (1) Ensure continuous improvement of quality and flexibility (2) eliminate waste and unnecessary activities (2) reduction of inventory and lead times (3), (4), (5) integration with partners in the supply chain and the continuous measurement of performance to permit continuous improvement of the system (6), (7), (8), (9)Total Quality programs implemented, workforce organization and layout changed Product families and development of common parts are used to increase efficiency of production Functional integration.

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Comparison between ECR and JIT (I)

3 general concepts in both ECR and JIT that are very similar:
(A) What drives the system (B) Objectives and Goals (C) Integration Strategic Focus

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Comparison between ECR and JIT (II)

(A) What drives the system
driven by consumer requirements all flow of information, materials and products are pulled by market demand and market information High emphasis on quality for both product and service, with continuous improvement focus

(B) Objectives and Goals

inventory reduction, lead-time reduction and unnecessary or redundancy elimination elimination of these inefficiencies would lead to cost reduction and fast response in a dynamic system.
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Comparison between ECR and JIT (III)

(C) Integration Strategic Focus
establishment of alliances with partners to share information, measurements, and to allow collaborative planning and decision.

The other areas not highlighted represent differences due to the differences of focus level between ECR and JIT. JIT is more focused in a plant level, while ECR is more focused in a Supply Chain level.
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Conclusions (I)
ECR and JIT are highly similar concepts
It seems that ECR has evolved from the basic objectives and emphasis of JIT Contribution of ECR: new set of objectives that had to be defined when moving from functional areas integration within a firm to integration in a whole supply chain

This shift from a firm level to a supply chain level is not fully completed yet
some concepts of JIT that were not treated by ECR, like organizational changes issues new concepts developed by ECR could also be applicable to JIT context.

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Conclusions (II)
Contributions of this paper
Formal definition of ECR concepts Initial effort towards the unification of the two concepts, which could drive efficiencies efforts in better directions

Limitations
This study is exploratory Additional concepts such as Quick Response (QR) and Lean Logistics should be added to the analysis

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