Supply Chain Management Approach

Supply Chain Management Approach
The production of supply chain management theory is far behind the specific techniques and methods. Supply chain management first appeared with some specific methods. With the development of network technology, use network technology to comprehensively plan business flow, logistics, information flow, capital flow, etc. in the supply chain and carry out planning, organization, coordination and control.

Common supply chain management methods:

*Quick Response (QR)

Quick response (QR) means that logistics companies face a buyer’s market of multiple varieties and small batches. Instead of storing “products”, they have prepared various “elements”, which can be extracted at the fastest speed when users make requests. "Elements", "assembled" in a timely manner to provide the required service or product. QR is a supply chain management method developed in the US textile and apparel industry.

* Effective Customer Response (ECR)

Effective Customer Response (ECR) is the abbreviation of Effective Customer Response. It is a supply chain management strategy developed from the grocery industry in the United States in 1992. It is also a supply chain management solution composed of manufacturers, wholesalers and retailers and other supply chain members. All parties coordinate and cooperate with each other to meet the needs of consumers better, faster and at a lower cost. Supply chain management solutions, effective Customer response is a supply chain management strategy that can make timely and accurate responses to meet customer requirements and minimize logistics costs, so as to optimize the supply of goods or services.

*Comparison of ECR ​​and QR

(1) Differences between QR and ECR

ECR mainly targets the food industry, and its main goal is to reduce costs and improve efficiency in all aspects of the supply chain.

QR is mainly concentrated in the general merchandise and textile industries, and its main goal is to respond quickly to customer needs and replenish quickly.

This is because the characteristics of the products operated by the food industry and the textile and apparel industry are different: most of the products operated by the grocery industry are functional products, and each product has a relatively long life (except fresh food). Therefore, the order quantity Too much (or too little) losses are relatively small.

Most of the products in the textile and apparel industry are innovative products, and each product has a relatively short lifespan.
less), the losses are relatively large.

(1) The focus is different.

QR focuses on shortening the delivery lead time and responding quickly to customer needs; ECR focuses on reducing and eliminating waste in the supply chain and improving the effectiveness of supply chain operations.

(2) Differences in management methods.

QR mainly uses information technology to achieve rapid reissue, and shortens the time to market through joint product development. In addition to the rapid and effective introduction of new products, ECR also implements effective commodity management and effective promotion.

(3) The applicable industries are different.

QR is suitable for industries with high unit value, strong seasonality, poor substitutability, and low purchase forecast rate; ECR is suitable for industries with low product unit value, high inventory turnover, low gross profit, strong substitutability, and high purchase frequency.

(4) The focus of reform is different.

The QR reform focuses on the speed of replenishment and ordering, with the aim of minimizing out-of-stocks and only purchasing items when they are in demand. ECR reforms focus on efficiency and cost.

(2) Common features

The performance is to go beyond the boundaries between companies and pursue logistics efficiency through cooperation. It is manifested in the following three aspects:

1. Sharing of business information between trading partners

2. Commodity suppliers are further involved in the retail industry and provide high-quality logistics services

3. The ordering and delivery business between enterprises is all carried out through EDI, realizing the paperless transmission of ordering data or shipping data

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