(PDF) ERC in Fast Food Supply Chain

ERC in Fast Food Supply Chain
Team:
Ganesh
Milan
Rakesh Verma
Professor:
Dr. JörgSchmütz

Abstract: -
Efficient Consumer Response in Fast food Supply chain Management is a
strategy designed to make fast food industry more efficient and responsive to
the consumer’s needs. ECR was originated in USA and later on accepted by all
over the world due to its good response. Implementation of ECR must be done
in proper manner as any of the obstruct can stop whole supply chain
management. This paper discuss the concept of ECR in Fast Food Supply
chain industry and its development and then examine the status of ECR
implementation in various fast food Industry. The various topics such ECR
initiatives transformed the supply chain from a push system to pull system
where channel partners form new interdependent relationships. Quick and
accurate flow of information through the supply chain enabled suppliers and
distributors to anticipate demand requirement far more accurately. Various step
that described in this paper that ECR helps in increasing level of service to
consumer and efficiency in supply chain management.
By implementing of ECR Fast food supply chain industry will get lot of benefits
and A Case study based on Mac Donald’s supply chain that shows how this fast
food industry firm us ECR and get advantage

Contribution Matrix
Introduction Rakesh Verma
ECR in Fast Food Industry

Table of Contents
1. Introduction......................................................................................................................................7
1.1 ECR Components.........................................................................................................................7
1.2 ECR Strategies................................................................................................10
1.3 ECR in Supply Chain Management .......................................................................11
2. Working of Supply Chain Management in Fast Food Industry..........................................13
2.1 Fast Food Supply Chain....................................................................................14
2.2 Issues in Fast Food Supply Chain..........................................................................16
2.3 Benefits of ECR..............................................................................................18
2.4 Cold Supply Chain...........................................................................................19
2.5 Internet of Things...........................................................................................23
3. Implementation in Fast Food Supply Chain...................................................................................25
3.1 Efficient Store Assortment in Fast Food Supply Chain...............................................................25
3.2 Efficient Product Replenishment Fast Food Supply Chain.........................................................30
3.3 Information System ..................................................................................................................31
3.4 Efficient Product Replenishment Fast Food Supply Chain.........................................................32
CASE STUDY MAC Donald’s................................................................................................................35
4. References......................................................................................................................................39

Introduction
1 Background of ECR
Efficient consumer response was first started in United States of America. The consumer
behavior forced the retailers and manufacturer to shift focus promotion driven growth in sales
to value driven growth in sales to value driven growth. The main goal of Efficient consumer
response was to reengineer the way of grocery industry was operating at that time. The
resultant of using ECR was good and well accepted by the retailers and the manufacturer
across all continent. As a result the leading global retailers like Wal-Mart, Tesco, Safeway
etc. started partnership with manufacturers to enhance customer value by making goods
cheaper because of reduction in distribution channels. Through this marketing line get a
concept of ‘Consumer is king’. Later on ECR get more response and attention in Asian
countries
1.1 ECR Components
ECR is a system or philosophy rather than a particular concept and stresses the complete
vertical integration of the marketing channels. The ECR components are logistics and
Marketing.
Figure 1: ECR Components
Continuous Replenishmet
VMI
Cross docking
Synchronized productionLogistic
Components

Continuous Replenishment
In this frequent replenishment takes place from the seller to the retailer or distributor to
maintain a good flow in supply chain and minimize bullwhip effect. To implement continuous
replenishment supplier must set an objective. IT systems must be used by supplier to establish
real time flow information in the supplier chain about sales. These data are important to
predict normal sales and deviation in demand, based on inventory level is decided. This kind
of strategy also needs agreements on promotions.
The associated benefits of CR are reduced inventory, reduced stock out, minimization of
bullwhip effect, improved customer service, reduced administration cost and perception value
in trading partner.
Figure 2: Continuous Replenishment
One of the main concerns is about maintaining full truckload and transportation cost
efficiency As replenishment quantity becomes smaller and it can be minimized by using
smaller trucks or loading more variety per truck.