Efficient Consumer Response (ECR) Practices as Responsible for the Creation of Knowledge and Sustainable Competitive Advantages in the Grocery Industry

Article excerpt

Introduction

The Efficient Consumer Response initiatives (ECR) have their origin in the United States, after the Annual Conference of the Food Marketing Institute and previous to a pioneer action coming from Walt Mart, with the main purpose of improving the productivity in the products supply chain from a global perspective.

Between 1992 and 1993 many consultants started to develop the concept ECR inspired by the production system in Toyota, more concretely in the "just in time" system. After that, in 1996, the 1st ECR Conference in Europe was held. That same year, ten different organisations started the Project ECR-Spain. In 2002, according to the AECOC, ECR- Spain and Accenture Report (2002), more than 26.000 collaboration and communication agreements in ECR practices were established in the areas of demand and supply of this kind of services.

ECR is a strategy in the groceries industry. According to it, suppliers and intermediaries work together in order to produce better results for the final consumer (Kurt Salmon Associates, 1993) and improve the attraction of demand (AECOC, 2005; ECR-Spain, 1998; PROMARCA, 2000). ECR practices are more "collaboration strategies" in the supply chain than a new concept of management. It has to do more with a process of elaboration of "best practices".

We think that the adoption of ECR practices introduces a change in some areas and activities in a firm. Amposen (1991), Nonaka (1995), Ciborra and Andreu (2001) amongst others, link the change and the learning efforts in a firm with the generation and management of knowledge. The results of the MERITUM project in the European Union stress the strategic importance of organisational knowledge for the building of competitive advantages in firms (Ordonez, 2000).

From Brooking (1996) the measurement of knowledge (intellectual capital) has always been of researchers' interest. We have revisited the most important models for intellectual capital measurement and tried to collect the most interesting approaches for our paper.

To measure the impact of ECR practices in the generation of competitive advantages, we have made use of the ITSGA concept "information technology strategic generic actions" (Andreu, Ricart, & Valor, 1997). Literature has recently paid attention to this methodology, mainly in order to incorporate into the firm's strategic objectives the experiences coming from other firms and the possibilities that the information and communication technologies offer to achieve competitive advantages (Gil & Guarch, 2006, Palou, 2006, Rambla, 2006, Soto & Tapia, 2006).

Figure 1 offers the main concepts included in our model

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ECR: Definition and Elements

ECR is a joint strategy for providers and distribution channels, dedicated to providing final consumers with the highest value, the best service and the greatest variety of products, by fitting together the needs coming from the firm's supply chain and the customer's needs (AECOC, 2000; PROMARCA, 2000). Sole (2000) refers to ECR as a system and sometimes as a movement. He indicates that it appears in Europe in 1994 in order to eliminate the unnecessary costs in the supply chain and the need of looking for a faster and proper reaction to consumer demands. Ferrer and del Castillo (1996), Stern, Ansary, Curghlan, & Cruz (1999) and Whipple, Frankel, and Anselmi (1999) have referred to this concept in the same way.

Amongst the main elements considered necessary to the final success in the adoption and implementation of ECR practices we can cite: the relationship between manufacturers and distribution channels (Merrefield, 1992). It requires changes in the firm's structure and in the processes (Shulman, 1993). The ECR practices must not be implemented without considering the creativity in merchandising practices and promotions (Veiders, 1993). …