EFFICIENT CONSUMER RESPONSE: A PRELIMINARY COMPARISON OF U.S.

AND EUROPEAN EXPERIENCES1

Sherah Kurnia School of Information Management and Systems Monash University, Melbourne, Australia Email: Sherah.Kurnia@sims.monash.edu.au Paula M.C. Swatman Interactive Information Institute Royal Melbourne Institute of Technology, Melbourne, Australia Email: Paula.Swatman@rmit.edu.au Don Schauder School of Information Management and Systems Monash University, Melbourne, Australia Email: Don.Schauder@sims.monash.edu.au ABSTRACT:
Within the domain of Electronic Commerce, Efficient Consumer Response (ECR) is a grocery industry management strategy designed to make the industry more efficient and responsive to consumers' needs. Although ECR originated in the US, the concept has been adopted in Europe, Australia and, slowly, in other regions. This paper discusses the concept of ECR and its development, and then examines the status of ECR implementation in the US and Europe. A cross-regional comparison of the two is presented, based on the ECR tracking surveys conducted by Kurt Salmon Associates in the US and Europe. The paper concludes with some suggestions regarding possible extensions to this preliminary comparative work.

1. ELECTRONIC COMMERCE WITHIN THE GROCERY SUPPLY CHAIN - ECR

Efficient Consumer Response (ECR) came into existence in the US as a direct response by the grocery industry to threats from alternative store formats/types such as discount stores, convenience stores (for example, 7Eleven, which started the trend of opening early and closing late at night), deep discount drug stores (retail pharmacies which also sell low-price consumer items), hypermarkets/ supercentres, and the rather quaintlynamed category killers which offer specialised, limited-line discount goods (such as toys or sports goods). These alternatives to the supermarket began to take market share away from the major supermarket chains in the late 1980s and early 1990s (Synder 1994). The pressures from competitors in this variety of alternative store formats then forced the United States grocery industry to re-examine its supply chain and, as a result of the study, a new initiative known as ECR was introduced (Tripplet 1994). The term Efficient Consumer Response came into general usage at the Food Market Institute Conference in January 1993 in the United States (Robins 1994). ECR is a grocery industry supply chain management strategy aimed at eliminating inefficiencies, and excessive or non-value-added costs within the supply chain, thus delivering better value to grocery consumers. It is designed to re-engineer the grocery supply chain away from a push system in which manufacturers push products into stores, towards a pull system in which products are pulled down the supply chain into the store by consumer-demand information captured at the point of sale (Kurt Salmon Associates 1993).
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This paper was published in the proceedings of "Bled'98" -- 11th International Conference on Electronic Commerce, Bled, Slovenia, June 8-10, 126-143. 1

The ultimate goal of ECR is to produce a responsive, consumer-driven system which allows distributors and suppliers to work together in order to maximise consumer satisfaction and minimise cost (Kurt Salmon Associates 1993). In order to achieve the goal, ECR proposes changes in nearly all the grocery industry business practices to make them efficient. The technologies, which are primarily electronic commerce (ecommerce) components, are used to automate these efficient business processes, as well as to enhance the communication and relationships between companies (Mathews 1996). ECR is thus an application of ecommerce within the grocery supply chain. The ECR strategy is used not only in the US but also in some other regions, notably Europe. A number of research projects conducted in Europe show that there have been increasing levels of interest among manufacturers and retailers in implementing ECR (Coupe 1995; Leggett 1996). Anecdotal evidence, however, suggests that ECR is being implemented in Europe for different reasons from those which drove North American corporations. The competitive push from alternative store formats does not appear to be a major driver for ECR in Europe (Coupe 1995). These differences, while worthy of further analysis, are not the focus of the present paper. As a preliminary comparative exercise, the more limited objective of this paper is to use available survey data (collected by Kurt Salmon Associates) to compare aspects of ECR implementation in the US and Europe. This work forms part of a doctoral project, a major aim of which is to provide an implementation model to assist companies in implementing ECR effectively.

2. INEFFICIENCIES WITHIN THE US GROCERY INDUSTRY

The supermarket originated during the 1920s in the United States. As retail grocery outlets, supermarkets are characterised by self-service from open shelves. Supermarkets also provide an assortment of non-grocery products. Due to the economic depression which began in 1929 and the mobility of consumers provided by the newly-accessible automobile, consumers would rather travel to more distant supermarkets offering lower prices, than shop in their closer but more expensive local food stores. As a result, supermarkets experienced an explosive growth in popularity during the 1930s (Pintel and Diamond 1991). As the number of supermarkets in the US began to reach its maximum sustainable level during the 1950s, competition drove the development of a number of innovations designed to maintain profits. These included, inter alia, the use of private brand labels, stamps and games (Allvine 1971). Later, in the 1970s, the use of discounting techniques and coupons began to replace the use of stamps and games. All these consumer promotion techniques required extensive administration and, therefore, introduced overhead costs to the operation of a supermarket which would naturally be reflected in the prices charged to customers (Kurt Salmon Associates 1993). A further disadvantage of supermarket operations was the adversarial relationship existing between grocery manufacturers and retailers, which operated to the disadvantage of both groups. In most transactions, manufacturers would attempt to sell as much as possible at high prices, while retailers/distributors would tend to purchase as little as possible at the lowest price. Manufacturers normally started with high prices and later discounted these to meet their shipping goals. As a consequence, forward/investment buying and diverting were added to the array of inefficient grocery industry business practices (Liesse 1994) which generated short-term excess profits for the supermarket, but created significant administrative overheads, inventory carrying costs, sporadic manufacturing schedules for manufacturers and high inventory levels for the entire supply chain. In addition, these practices also had the potential to erode the value of manufacturers brands, causing customers to become more price sensitive and less brand loyal (Liesse 1994). All these inefficient consumer and trade promotions resulted in a loss of market share for supermarkets in favour of the leaner, more focused alternative store formats in the late 1980 s/early 1990 (Synder 1994). s

3. ECR AS A COLLABORATIVE SOLUTION

In order to survive, the US grocery industry realised that it must re-examine its supply chain and purchasing practices. It needed to study the ways in which alternative format retailers were carrying out their business and to develop new ideas for making the mainstream grocery industry more competitive. A study undertaken by a group of US grocery industry leaders in 1992 resulted in the ECR initiative (Kurt Salmon Associates 1993). ECR is actually not a new concept, but a specialised version of the Quick Response (QR) strategy, which is employed in the apparel industry. Quick Response, in turn, is a modified version of the Just-In-Time (JIT) inventory management strategy for manufacturers, which was first used by the Toyota Motor Corporation in Japan (Mitchell 1996) ECR attempts to eliminate inefficiencies within the grocery industry supply chain by introducing strategic initiatives in four areas (Kurt Salmon Associates 1993): Efficient Store Assortment; Efficient Product Introduction; Efficient Promotion; and Efficient Product Replenishment. These strategies are supported by two programs and five enabling technologies as shown in Figure 1 below. The figure also demonstrates via arrows how subordinate ECR factors contribute to super-ordinate factors and, finally, to the practice of ECR overall.

Category Management

Efficient Store Assortment

Efficient Product Introduction

ECR

Efficient Promotions

Efficient Product Replenishment Activity Based Costing

Continuous Replenishment Program

Barcodes/ Scanners

Computer-Aided Ordering Cross-Docking /Direct Store

Electronic Data Interchange

Figure 1. ECR factors and relationships

3.1 Strategies
3.1.1. Efficient store assortment This initiative is aimed at optimising the productivity of inventory and shelf management at the consumer interface - the store level. 3.1.2. Efficient product introduction

The objective of this initiative is to maximise the effectiveness of new product development and introduction activities, in order to reduce costs and failure rates in introducing new products. 3.1.3. Efficient promotion This initiative aims at maximising the total system efficiency of trade and consumer promotions. This can be achieved by introducing better alternative trade and consumer promotions, such as pay for performance and every day low price policy. 3.1.4. Efficient product replenishment The objective of this initiative is to optimise time and cost in the replenishment system by the provision of the right product to the right place at the right time in the right quantity and in the most efficient manner possible.

3.2 Processes
3.2.1. Category management Category management supports the first three initiative of ECR discussed above. It is defined by Information Advantage (1996) as an interactive business process whereby retailers and manufacturers work together in mutual cooperation to manage categories as strategic business units within each store" (p1). A category is a group of products which can be substituted for one another by a consumer and examples include cereals, bakery, household cleaners, and so on. The types of categories to be included in a store have to be determined correctly to meet consumer demand and at the same time, to maximise profit for all parties (Tripplet 1994; Information Advantage 1996). Category Management employs EDI, barcodes and scanners to accurately capture information on customer demand on each category and to share the information between trading partners. 3.2.2. Continuous replenishment program (CRP) This program supports the efficient product replenishment initiative. CRP is defined as "the practice of partnering among distribution channel members that changes the traditional replenishment process from distributor-generated purchase order to one based on actual or forecast consumer demand" (Thayer 1995, p1). CRP transfers responsibility for inventory replenishment from retailers/distributors to suppliers and thus the approach is also known as Vendor-Managed Inventory. With CRP, orders are transmitted electronically and are made more frequently and in smaller quantities (Mathews 1994). CRP is also supported by the category management program which forms the shelf management strategy to track the inventory and demand for each individual category. In addition, CRP involves the use of technologies discussed below.

3.3 Enabling technologies

3.3.1. Barcodes / Scanners The use of barcodes and scanners is a fundamental element for ECR implementation in the grocery industry as it allows accurate and faster information capture to be obtained, which in turn can be shared with trading partners (EAN Australia 1997). 3.3.2. Electronic Data Interchange (EDI) Electronic Data Interchange (EDI) is defined by Emmelhainz (1990) as an inter-organisational exchange of business documentation in a structured, machine-processable form (p4). Besides purchase orders and invoices, another common business document exchanged electronically in the grocery industry is the Advance Shipping Notice (ASN) the EDI message which precedes the arrival of pallets at their destination. 3.3.3. Computer-Aided Ordering (CAO) Computer Aided Ordering (CAO) is a retail-based system that automatically generates orders for replenishment when the inventory level drops below a pre-determined reorder level (ECR Central 1997, p1). The system keeps track of the inventory levels of all items in the store and makes necessary adjustments when sales or replenishments occur. 3.3.4. Cross-Docking/Direct Store Delivery Cross-Docking or Flow-Through Distribution is "a direct flow of merchandise/ product from receiving to shipping, thus eliminating additional handling and storage steps in the distribution cycle" (Andel 1994, p93). The idea of cross-docking is analogous to Direct Store Delivery in which manufacturers deliver products , 4

directly to the retailer, bypassing the wholesaler to eliminate warehouse handling.

3.3.5. Activity-based costing Activity-Based Costing is a new costing tool which works on the principle that activities (as opposed to product volumes or labour in traditional accounting) are what really affect costs. ABC offers a better understanding of how profits are generated, as it increases the visibility of costs in a particular environment. It can be used to gain top management commitment and leadership to support the implementation of ECR and its key elements (Landry 1997).

4. MAKING THE CHANGE TO ECR

The range of management techniques and technological initiatives described above have proved highly successful in the United States (Hoban 1993; Krum 1994). The obvious benefits to be gained from ECR have led to its adoption by some companies in Europe, though with a different motivation (Coupe 1995). In order to make the ECR initiative work, there is a need for major changes in a company culture, traditions and business s practice. Proponents of ECR believe that companies within the supply chain must move from win/lose adversarial relationships to win/win relationships between trading partners. Many companies find the process of making these changes challenging. However, only when all parties within the supply chain work together to increase efficiency and remove costs from the chain will they be able to provide greater value to consumers. Then the use of technologies to automate these efficient business processes will remove further time and costs from the supply chain (Kurt Salmon Associates 1993).

5. ECR IN THE UNITED STATES

In the beginning, the ECR initiative seemed eminently achievable within the US grocery supply chain with the existence of integrated software systems and communication standards for EDI. However, the 1997 ECR Scorecard Benchmark project, a study commissioned by the Joint Industry ECR project, discovered significant barriers to ECR. As a consequence of these barriers, the retail volume moving to ECR is still low and has not reached a critical mass, i.e. 30%-35%. Only when the critical mass has been achieved can the industry gain the real benefits of ECR (Greenbaum 1997; Mathews 1997). The United States grocery supply chain failure to reach critical mass is attributed to two software problems s and one non-technical problem (Greenbaum 1997). Firstly, despite the existence and establishment of some communication standards for EDI, accurate POS data is hard to capture, and data format standards across the supply chain are mainly non-existent, and as a result, some suppliers are not able to analyse the data. Secondly, the software industry has yet to deliver standard, off-the shelf products allowing the entire supply chain to function in an ECR environment. In particular, there has been a serious problem of inadequate software for retailers and distributors. Perhaps not surprisingly, the largest problem according to Greenbaum and Porter is non-technical in nature. It is the lack of cooperation between participants in the supply chain. Retailers are reluctant to share customer-level data, which is the only strategic product they own, with their trading partners. The existence of Internet Commerce exacerbates this problem as, in this context, the distinctions between manufacturers, distributors and retailers have diminished (Porter 1997). At the moment there is a considerable effort by software vendors and industry groups in the US to enhance ECR implementation through the provision of necessary integration systems and assistance in fighting the barriers to entry, both technically and non-technically. The most difficult barriers to remove are human barriers in terms of organisational change. Despite the failure to reach critical mass, the situation of the US grocery industry is deemed better today than several years ago (Porter 1997). The industry has more controls in place, and is focusing on efficiency and effectiveness to improve performance. Some manufacturers are actively working together to improve their returns on investment and reduce total expense. However, as some authors point out, forward buying opportunities and deals and diverting are still as prevalent as they were a few years ago, even among those companies which are most efficient in continuous replenishment (Mathews 1997).

6. ECR IN EUROPE
The supermarket operation in Europe is similar to that in the United States except that European

supermarkets are generally smaller. A major strength of European supermarkets is their high efficiency per square foot; and, while American supermarkets are said to be more service-oriented, Europe is starting to catch up (Coupe 1995). Leggett (1996) notes that while some people perceive ECR as an unnecessary innovation because of the already advanced and sophisticated European grocery supply chain (the average European stockholding is 25 days, compared to 130 days in the US), ECR is still attractive to the European grocery industry as it offers improvements in the quality of products and services and in environmental aspects (product assortment).

In Europe, the cost of raw material procurement and capital tied up in inventory amounts to as much as 80% of a company total costs. Research conducted by IBM in 1997 suggested that the retail and distribution s industries would experience reduced market growth. In addition, the failure rate of new product introductions to the European market is very high, amounting to up to 80%. It can thus be argued that ECR could play a role in supporting the survival of some industries by improving the performance of their supply chains (Leggett 1996; Davies 1997). The importance of ECR to the European grocery industry became more noticeable in 1994 with the establishment of an ECR Europe Executive Board (ECR Board) to promote and advance the ECR strategy in Europe. The ECR Board consists of 18 companies, equally divided between retailers and manufacturers. Many other companies are also actively involved in ECR Board projects (Kurt Salmon Associates 1997). The European ECR concept is a direct application of the US approach, but with a European flavour. The European ECR vision is expressed as working together to fulfil consumer wishes better, faster, and at less cost (ECR Europe, p1). The ECR Board estimated that ECR has the potential to remove US $33 billion from the European grocery store supply chain (equivalent to 5.7% of retail sales) according to the First Official Conference of ECR Europe in Geneva (25-26 January 1996). In the Second Official Conference of ECR Europe held in Amsterdam, 13-14 March 1997, however, the potential savings of ECR were reviewed and the figure has now become greater - 7.3% of retail sales, with the inclusion of tangible savings obtainable from the Efficient Unit Load initiative (ECR Europe 1997). The unit load issue is important to management, as European unit loads today simply do not meet the requirements of ECR - they introduce high cost complexity and non-value-added handling activities. Thus, it is argued that although the competitive pressure from alternative store formats is not prevalent in Europe, ECR has much to offer in removing significant costs from European grocery supply chains. Leggett (1996) and Davies (1997) believe that the key to the difficulties in ECR implementation in Europe is a lack of partnership and information sharing.

7. COMPARISON OF SURVEY DATA: US AND EUROPE

7.1 Scope and limitations of surveys
The comparative data reported below were taken from first and second ECR annual tracking surveys conducted in the US and Europe by Kurt Salmon Associates (Kurt Salmon Associates 1995/6 and 1997). The survey instruments were kept as standard as possible to maximise comparability of data. In each survey in both regions two questionnaires were used, wholesalers/retailers and manufacturers/brokers. For the US surveys the number of respondents is reported as 392 (1994) and 176 (1995) with some bias towards response by larger organisations, but precise response rates are not reported. For the European surveys, the number of respondents is reported as 800 (1995/6) - response rate of 25% and 500 (1997) a response rate of 20%. The respondents were organisations contacted through relevant industry associations. Since responses were anonymous there is no guarantee that the surveys provide comparative longitudinal data on individual corporations, but rather provide a broad industry overview. Selected comparative data from the United States and European surveys will be summarised under the following headings: Level of ECR implementation; Commitment to ECR; Implementation investment; ECR adoption issues; Technology implementation; Implementation obstacles and benefits.

7.2. Level of ECR implementation

The US 1994 and 1995 survey results indicate an increase in the level of ECR implementation in all practices

in the US, as shown in table 1. Efficient product introduction was not included in the survey as this practice has not been viewed as part of the initial phase of ECR. Both distributors (wholesalers, self-distributing chains and wholesaler-supplied retailers) and suppliers (brokers and manufacturers) improved the implementation of efficient replenishment to a significant extent. The findings also indicate that distributors made faster progress between 1994 and 1995 than suppliers.

Table 1: ECR implementation strategy status - United States ECR Strategies Efficient Store Assortment Efficient Promotions Efficient Replenishment 1994 (%) 46 46 34 1995 (%) 55 54 47 Increase (%) 9 8 13

In Europe, based on the European 1995/6 and 1997 survey results, the level of implementation across ECR practices has actually dropped as depicted in Table 2. As in the US, retailers in Europe were involved in ECR at a more advanced rate than manufacturers. Both have focused their efforts on the efficient store assortment and efficient product replenishment. Table 2. ECR implementation strategy status - Europe ECR Strategies 1995/6 (%) 40 30 35 1997 (%) 29 21 31 Differenc e (%) -11 -9 -4

Efficient Store Assortment Efficient Promotions Efficient Replenishment

7.3 Commitment to ECR

The United States 1994 and 1995 surveys and European 1995/6 and 1996/7 surveys indicate that manufacturers and retailers in both regions had a very high level commitment to ECR and had actually increased the level of commitment, particularly among top management levels and functions. However, many European companies viewed their trading partners as being less committed, and therefore inter-organisational communication to stimulate external interest and commitment was required.

7.4 Implementation investment

In the US both manufacturers and retailers have continuously increased their level of ECR investment, based on the results of the US 1995 survey. In 1994 they invested approximately US $3 billion in ECR implementation. The 1995 survey suggests that their level of investment increased by 7%, which is equivalent to US$ 3.2 billion over 12 months. Comparison of the two US surveys indicates that while retailers and brokers increased their investment level, manufacturers actually reduced it. In Europe, based on both survey findings, the investment level has continuously increased among manufacturers, but has reduced among retailers (who had already invested significantly in IT over the last decade). Table 3 depicts the investment level of survey respondents and among industry as a whole (assuming that all industry players were investing at the same rate as survey respondents). Table 3. European ECR investment level ECR Investment Among Survey Respondents Among the European Industry as a 1996 US$0.56 bn US$2.2 bn 1997 US$0.69 bn US$2.8 bn

Whole Both US and European grocery industries placed a high priority on IT investment (except for the European retailers), as well as business process re-engineering, education and training.

7.5 ECR adoption issues 7.5.1. ECR education

Both US and European respondents viewed trade association conventions /seminars/conferences and trade association publications, as well as an inside champion of ECR as important sources in obtaining information and learning about ECR. Thus, in both regions, industry/trade associations play an important role in initiating the adoption of ECR by companies through the communication and education process. Both US and European companies view system vendors and academics as not particularly useful in understanding the ECR concept. 7.5.2. Change management Both US and European manufacturers and retailers viewed heavy and visible personal commitment as one of the most effective and widely used ECR change management approaches. Pilot programs with suppliers or customers and cross-functional or multi-discipline action teams were reported as widely-used approaches among European manufacturers and retailers. The concept of business process reengineering appears to be quite popular in Europe and was also viewed by some American retailers as a satisfactory change management approach. 7.5.3. Creating Performance Measures There was considerable agreement by both regions on the need to create performance measures which: focus more on customer/consumer satisfaction place more emphasis on productivity gains place more emphasis on Activity-Based Costing to understand the real profitability of products and customers. 7.5.4. Level of program and technology implementation The US 1995 survey indicates that Category Management and Continuous Replenishment Program were progressing significantly among American manufacturers and retailers. The 1995/6 European survey showed that these were the least widely implemented practices (quite possibly because the much smaller European inventory holdings made implementing these processes less urgent). The 1997 findings, however, indicate an improvement in the implementation level of Category Management in Europe. Increased levels of implementation of technologies such as EDI, particularly among manufacturer respondents (who generally lagged behind retailers in IT implementation), were also identified. The annual tracking surveys used in this study suggest that the level of maturity of Cross Docking/Direct Store Delivery implementation was higher in Europe than in America. DSD has been widely implemented by large European retailers. However the EDI implementation levels are still relatively low in both regions. The highest EDI capabilities found in both regions were in purchase order transactions and invoice transactions.

7.6 Implementation obstacles and benefits

7.6.1. Obstacles The 1994 and 1995 US surveys indicate that lack of a clear roadmap was viewed as one of the major obstacles to ECR implementation, particularly among retailers. Shortage of skilled personnel, and inflexible IS are also major obstacles. Table 4 lists, in rank order, the six problems most commonly identified by US manufacturers and retailers, based on the 1995 survey. Table 4. Problems to overcome in implementing ECR - United States 1995 Rank 1 2 3 United States Manufacturers Reluctance of Customers to Share Information Customer Capabilities not up to Required Level Conflicting Priorities for Resources United States Retailers Inflexible IS Lack of a Clear Roadmap Conflicting Priorities for Resources 9

Rank 4 5 6

United States Manufacturers Inflexible IS

United States Retailers Shortage of Skilled Personnel Shortage of Skilled Personnel Supplier Capabilities not up to Required Level Customer Category Managers Insufficient Information insufficiently Trained. Table 5. Problems to overcome in implementing ECR - Europe 1997

Rank 1 2 3 4 5 6

European Manufacturers Reluctance of Customers to Share Information Customer Capabilities not up to Required Level Conflicting Priorities for Resources Inflexible IS Shortage of Skilled Personnel Customer Category Managersinsufficiently Trained.

European Retailers Functional Territory Issues Conflicting Priorities for Resources Inflexible IS Shortage of Skilled Personnel Supplier Capabilities not up to Required Level Reluctance to Take Initial Financial Cost

In Europe, most frequent reasons given by manufacturers and retailers for not implementing ECR in both surveys, were shortage of adequately skilled people and Lack of understanding of ECR. Manufacturers in both regions view reluctance of customers to share information as one of the major problems encountered. Table 5 lists the six problems most commonly identified by European manufacturers and retailers, based on the 1997 survey findings. 7.6.2. Benefits The US 1995 survey results indicate that distributors/retailers believed they had gained some benefits from ECR, and that the projected benefits had increased over the years. These benefits included: increased sales and gross margin, reductions in warehouse inventories, reductions in retailer inventories, increased variety of goods offered to customers, reductions in the numbers of SKUs (stock keeping units), and reductions in expenses for all key operating areas. Similarly, the US manufacturers and brokers both expected and experienced such benefits as: increased sales, increased profit projections, reductions in costs of goods, reductions in packaging, raw materials, manufacturing and other expenses, reduction in out-of-stock problems, reduction in finish-product inventory, smoother product flows, and better information. In Europe, manufacturers expect to see ECR benefits continue to improve in regards to: reductions in finished goods inventories, reductions in invoice deductions and out-of-stocks, increased in sales, and improved profits. European retailers also expect reductions in all their costs, reductions in warehouse inventories, improved sales, gross margins and sales per square meter, slight reductions in transaction size, and an increase in store traffic.

8. DISCUSSION AND CONCLUSIONS

These comparisons suggest that the ECR initiative has gained some acceptance by the European grocery supply chain, although the level of ECR investment and the rate of growth are still lower in Europe than in the US. The decline from 1995 to 1997 in the rate of ECR implementation in Europe may indicate that the European grocery supply chain does not take ECR as seriously as does the US supply chain. A further possible reason may be that there is less competitive push driving the ECR adoption process in Europe. However, the already advanced technology of most European retailers could provide a strong foundation for ECR implementation, if these retailers became convinced of the advantages of ECR.

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ECR implementation in Europe is generally initiated by the larger trading partners. In both America and Europe, changes in attitude to establish partnerships and facilitate information sharing is still the most challenging issue. However, it is argued that more companies in both US and Europe are now actively pursuing the ECR partnership in order to improve the overall performance of the supply chain (ECR Europe 1997; Mathews 1997). Based on the most commonly cited implementation obstacles by survey respondents in both US and Europe, in order to promote ECR implementation in both regions, there is still a need for (Kurt Salmon Associates 1995 and 1997): investments in communication both in a technological and behavioural sense to address the reluctance in sharing information between trading partners. training to address the inadequacy of skilled personnel and to develop clear road maps for the implementation process. investments in IS to achieve compatibility between organisations. reassessment of priorities for resources improving the strategic use of ECR to longer term business growth to overcome the problem of conflicting priorities. The surveys used in this study show that manufacturers and retailers in both regions have experienced some benefits in terms of increased sales, improved profit and reduced costs. However, neither group in the US nor Europe has actually reached what could be termed critical mass (30%-35% of industry volume) the point at which the real benefits of ECR can be reaped. While the surveys do not provide evidence to show whether ECR has produced improvements in turnover or market shares, this is clearly an important indicator of the long-term success of ECR. In this regard, further research is needed to identify how ECR improves turnover or market shares of companies.

9. FUTURE RESEARCH
Despite the potential benefits obtainable from ECR, it must be reiterated that the adoption of ECR has been slow in both regions. In 1993, Hoban (1993) warned of the necessity for widespread adoption of ECR practices before the benefits could be realised. Clearly, there is a need to explore the reasons for the slow uptake of ECR in each of these regions, and to determine whether these reasons differ between region. Such understanding could assist in the development of techniques for promoting wider ECR implementation. On the other hand, further study of low adoption levels may require a revisiting of assumptions about information sharing which underlie the ECR concept. It is perhaps significant that the ECR strategy least studied thus far in the surveys has been product introduction, a factor which especially touches on the fine balance between collaboration and competition in the grocery industry. This paper has provided a preliminary view of North American and European experiences with ECR over a two-year period. In later work, we hope to extend this comparison with data showing Australia experience of s ECR and to explore in more detail the reasoning behind regional acceptance and uptake of ECR, and at the same time, the effectiveness of the ECR initiative.

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Hoban, T.J. (1993). Efficient Consumer Response (ECR): Perceived Barriers and Opportunities. North Carolina State University: Raleigh, NC. Information Advantage (1996). What is Category Management. http://www.categorymanagement.co/whatis.html. Kurt Salmon Associates (1993). Efficient Consumer Response: Enhancing Consumer Value in the Grocery Industry. Kurt Salmon Associates (1995). ECR Progress Report. Kurt Salmon Associates (1995/6). ECR - Europe Annual Tracking Survey. Kurt Salmon Associates (1997). ECR - Europe Annual Tracking Survey. Landry, S.P., Wood, L.M. and Lindquist. T.M. (1997). Can ABC Bring Mixed Results? Management Accounting 78(9) 28-33. Leggett, D. (1996). I Know What I Want..and I Want It Now. Marketing 20. Liessa, J. (1994). The Nitty-Gritty of ECR Systems: How one company makes it pay. Martin, A. (1994). Infopartnering. Oliver Wight Publication, Inc. Mathews, R. (1994). CRP Spells Survival. Progressive Grocer 28-34. Mathews, R. (1996). A Spirit of Cooperation. Progressive Grocer (1)61-62. Mathews, R. (1997). ECR: More Promise than Performance. Progressive Grocer 26-28. Mitchell, A. (1996). Serving up a Logistical Philosophy. Marketing Week 19(9) 26-27. Pintel, G and Diamond, J (1991) Retailing. Englewood Cliffs: Prentice-Hall. Porter, P.L (1997). Supply-Chain Facts and Fictions. Software Magazine 8. Robins, G. (1994). Sailing into ECR's Enchanted Waters. Stores 76(10)43-44. Synder, G. (1994). ECR: A Survival Tool. Progressive Grocer 73(9)101-112. Thayer, W. (1995). How CRP Cut Inventory, Sped Turn and Grew Sales. Frozen-Food-Age 1,16,17. Tripplet, T. (1994). More U.S. Grocers Turning to ECR to Cut Waste. Marketing News 28(19) 3,12-13.

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