It’s time to refocus on maximizing consumer satisfaction while minimizing cost. We tried once and failed. It’s time to try again.
Remember Efficient Consumer Response, or ECR for short? A generation ago, retailers, manufacturers, logistics providers and suppliers agreed to collaborate in rooting out inefficiency and serving consumers better. Back then, ECR was defined as a way to maximize consumer satisfaction while minimizing cost. There were industry committees that researched and reported back on key issues at national conferences. Competitors spoke at lecterns, freely sharing what they had learned for the good of all.
TO HELL IN A HANDBASKET
Well, all that went to hell in a handbasket. The conferences stopped. Trading partners went back to constant fighting. Inefficiency and unnecessary spending came back with a vengeance. And today, consumers are the worse for it.
Yet the ECR concept still exists — very actively — seemingly everywhere but the United States. Just check out ecr-community.org. Why isn’t it happening here? I can’t be the only one who wants to be able to just talk with trading partners about the multiple serious problems we all face. Not to sell them anything or point fingers. I just want a forum where we can get together and work on issues.
The hostility and paranoia that has overtaken politics has overflowed into our industry. We seem locked in a constant life-or-death struggle.
Our freight costs went up 43% in the past year. Yet I know there are still extra trucks on the road that aren’t needed. They may be carrying only a few pallets, or taking inefficient routes. Some providers set up consolidation warehouses for consignment, and charge users outrageous prices to pull from them. Some providers seem to be at war with the idea of consolidation via a hub and spoke system. As it is, in many places smaller retailers can’t get a half pallet — they have to pay for a full pallet or nothing. How does that serve the consumer?
Labor is up. Packaging is up. Raw materials are up. Retailers often raise prices to keep up their margins, but then deny manufacturers price increases to cover their costs. These cost increases are everywhere, and they’re easily verified. The last thing I want to do is raise prices, but I have to pass along costs or I don’t eat. And eventually, I want to make a profit.
The hostility and paranoia that has overtaken politics has overflowed into our industry. We seem to be locked in a constant life-or-death struggle, suspicious of everybody who might (or might not) be a competitor.
Many of us would like to see this downward spiral stop. It would be better for the industry, and for the consumer. Maybe it’s time for NFRA, AFFI and FMI to work on solving this problem, ideally by working together. Send your thoughts to them, or to the founders of Frozen & Refrigerated Buyer, firstname.lastname@example.org or email@example.com.
PLEASE BE HEARD!
FR Buyer will keep your name out of it, just like they’ve done for me. But please be heard, or this will continue and get worse. We all deserve better.
ECR IS VERY MUCH ALIVE… EVERYWHERE BUT THE U.S.
Today ECR has key retailer and supplier executive members worldwide. Here are verbatims from ecr-worldwide.org. The site is worth a visit!
“ECR Community is the global association for all ECR National organisations in the Retail & Consumer Product Group sector. It is a not for profit that provides a neutral platform to develop and share best practices among our network of ECR Nationals and their members.
The purpose of the ECR Nationals is to bring together manufacturers, retailers, service providers and industry associations at a national level to share best practice information in areas that are mutually beneficial such as supply chain, category management, sustainability and digital transformation…
“Are you interested in establishing an ECR association in your country? We are now growing to become a global association, with new members joining from all continents. By becoming a member, you have the opportunity to network with other ECR National Associations, learn and share best practice on global retail trends through our expert groups, quarterly meetings and regular communications.” n