A global ECR scorecard, which is a capability assessment tool for FMCG companies to assist them in the process of benchmarking, comprises four focus areas: Demand Management, Supply Management, Enablers and Integrators.Under Demand Management, companies can measure demand strategies and capabilities on strategic direction of consumer value, people and organisation and information management. Demand Management also involves evaluation of optimised planning and execution of processes, besides planning, execution and evaluation of promotions. It also measures planning and execution of new product introductions. Besides, it helps in measuring the concept of consumer knowledge management and the various solutions and channels for consumers.
Under Supply Management, companies can self-evaluate on supply strategies and capabilities taking into consideration the strategic direction, people and organisation and information management. Responsive replenishment is another parameter which covers automated store ordering, product flow techniques and transport optimisation. Integrated demand-driven supply and operational excellence is also judged on production, suppliers, store operations and distribution.
Enablers include concepts such as product and shipment identification, electronic data alignment and electronic communication. Cost, profit and value can also be measured on activity-based costing and consumer value management.
Integrators help the companies to evaluate collaborating planning and e-business solutions.
"Weight Factors" - ie. points - on each of the above are evaluated for both retailers and suppliers. A general meaning can be drawn on the basis of the above highlighting the need-gaps. Scores ranging from 0 to 5 are then given to conclude the areas in which the company is either strong or weak.
For example, a score of 0 can be given on a general meaning of "nothing planned" under the concept "Demand Strategy & Capabilities" for the following considerations:
Strategic Direction - Consumer Value Business Models: All plans and strategies derive from the principle that creating consumer value must be the primary driver for business decision and actions.
Strategic Direction-Category Management: Strategy aligned with the category management principle that business direction should be based on consumer-based product categories.
People & Organisation: The degree to which the structure, knowledge, HR planning and culture of the organisation, as well as people skills and remuneration policies have changed to support consumer focused demand management.
Information Management: Use of information technology to analyse consumer data and to provide category/channel performance data in support of the consumer value and category management processes.Similarly a score of 4 can be given on the general meaning "fully implemented" on the concept "Demand Strategy & Capabilities" for the following considerations:
Strategic Direction: A portfolio of business models ensure that the organisation exceeds consumer expectations on value and delivers superior returns for trading partners.
Strategic Direction: Category management process deployed. Balanced category measures (consumer, customer, market) are basis for all significant decisions and rewards. Profit and share targets are being met.
People & Organisation: Category /channels managers/teams assume responsibility for total system for their categories/channels. Changes to structure, HR planning, culture and remuneration policies are completed. Decisions made in context of overall demand management strategy. Preferred partnerships are considered the way of doing business. Employees work actively with trading partners and are often swapped on project teams.
Information Management: Integrated consumer and market data collection, warehousing and mining capabilities are routinely used with most trading partners by all business units, contributing to superiorconsumer value solutions and business results.The global ECR scorecard thus enables companies to assess their positive points and the need-gaps which need to be filled. This will not only help in the process of benchmarking, it will also assist companies to embrace best practices within the industry.
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