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Part - III

Continuous Replenishment Programs (CRP) has been frequently cited as key processes in the quest toward ECR implementation. Yet CRP implementation, rife with challenges, requires the management of new and more abundant sources of information and an understanding of the unique "rules of engagement" associated with each new relationship established among trading partners. In response to strong offshore competition, the American apparel industry in the early 1990-s started to formulate the set of initiatives known as "Quick Response" (QR). The QR leadership committee (1994) commissioned by the apparel industry defined the QR process goal to "continually meet changing requirements of a competitive market place which promotes responsiveness to consumer demand, encourages business partnerships, makes effective use of resources and shortens the business cycle throughout the chain from raw materials to consumer".

Both of the ECR and QR initiatives were slowly adopted across the respective industries that spawned them. They did help change attitudes and create the realization that companies must look beyond their own boundaries to achieve high level of customer service and low costs. The collaborative aspect of these processes, however, was never implemented as originally envisioned on a large scale, mainly due to the cultural difficulties associated with collaborative management and the lack of scaleable software. In its purest form, vendors get information on sales and inventory levels and are committed to keep a certain level of service. This allows manufacturers to control the entire cycle of sales and order forecasts, order placement and replenishment. It also allows them to pull the forecasting risk across all their customers. Retailers, naturally, enjoy lower inventory carrying costs since the suppliers carry the product until it is sold. In reality most VMI programs cover only the retailers' distribution centers and not the stores.

Many VMI programs have been discontinued since retailers were not satisfied with the lack of collaboration with their suppliers as well as with the forecasting ability of the suppliers, which led to low level of service. Thus, many of them turned into Co-Managed Inventory (CMI) or Joint-Managed Inventory (JMI) processes. These include a more detailed business process, which is mapped out front, and an explicit involvement of both sides in the sales and order forecasting and in the process of generating the replenishment orders.

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* Contributed by -
Deepak Bisht & Nilesh Dewangan,
Students of PGDIE,
NITIE, Mumbai.