ECR India-formed in July this year-is an association of manufacturers, retailers and service providers in the FMCG industry who have collaborated towards removing inefficiencies from the supply chain.

ECR, which has brought together FMCG majors like Hindustan Lever, Johnson & Johnson, Procter & Gamble, Colgate-Palmolive, Cadbury India, among others, has taken the first step towards undertaking a massive benchmarking exercise to weed out inefficiencies in the supply chain. It aims at achieving a seamless collaboration between the supply side and the demand side through enabling technologies.

The only hitch in the benchmarking process, agrees Mr Ambwani, could be the issue of competitive advantage, which has the potential of defeating the very objective spelt out by ECR. "J&J is the first company which has filled the scorecard openly to the industry. This should trigger other companies to follow," says Mr Ambwani, who is hopeful that companies will come forward for the betterment of the industry at large. He said the vision is to bring in a smooth, continual product flow matched to consumption.

"The consumer pays for all the inefficiencies in the supply chain. Delivering low cost is what the industry is attempting to get at. The consumer would like to have a product as fresh as possible on the shelf, and it is our endeavour to cater to the consumer's specific needs. If a consumer wants to have a product of a particular size only, it is our duty to provide him/her with that, and not thrust what is available down the consumer's throat. This can happen only if inefficiencies are removed from the system," he states categorically. "What is required is a continuous process of benchmarking with the help of an ECR scorecard which is then validated by a consultant. It is a voluntary coming together of industry for benchmarking," he adds.

The scorecard has been designed by PricewaterhouseCoopers (PwC) globally. It is a standard card and is applicable to all consumer products companies the world over. Simple questions, such as "do you involve customers in determining your promotions?", are enlisted in the scorecard, which are then rated from one to five. "Very often companies decide on how a product should be packaged without taking into consideration what the retailers' space permits. Standardisation is also important in the industry," says Mr Ambwani.

"In moving the product in the supply chain from one player to another until it finally reaches the consumer, everything we do translates to cost, for which, eventually, the consumer pays. The idea is to work together to fulfil consumer wishes better, faster, and at less cost," he opines."The whole industry will benefit by doing so. And then the consumer will get lower prices as a result of an efficient supply chain," reasons Mr Ambwani.

Best practices will be the second step that ECR India will take to remove inefficiencies in the suppy chain. "Sharing best practices will be an evident fall-out of the benchmarking process. Identifying areas of improvement will help in removing inefficiencies," he says. Scores from the scorecard will be used for determining these best practices. The industry is now pushing for giving ECR a legal status. A value-chain analysis is also being conducted by PwC so as to throw up opportunities at different stage of the value chain in India.

Eliciting his dream for the industry, Mr Ambwani said: "We should have a common inventory keeping platform. This will also benefit the retailer at large and finally the consumer. Further, there should be a common infrastructure for achieving connectivity across the entities." While ECR India has a long way to go towards achieving these goals, the logo of ECR aptly states: More quality, less time; More service, less complexity.