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SCM Standards, Technologies & Best Practices
Management Concepts

Different industries around the world are now more aware of the importance of supply chain management (SCM) and relevant standards. They have begun to learn and adopt the management concept. To better promote the SCM concept within the industry, different consortia are formed with a conceptual framework under which a few key best practices and enabling technologies are grouped and prioritized for common adoption. Here are some well-known industry initiatives.

Fast-moving Consumer Goods/Grocery Industry

Healthcare Industry

Foodservice Industry

Efficient Consumer Response (ECR)


Efficient Consumer Response(ECR) is a supply chain management (SCM) movement in FMCG industry. It focuses on redesigning the supply chain processes by applying modern management methods and leading edge technologies to reduce overall costs and response times, whilst at the same time increasing the quality of the products and services that are provided.

ECR contains 14 SCM improvement concepts grouped into 4 focus areas under Demand Management, Supply Management, Enablers and Integrators. Demand management is focused on planning and communication of the variations in consumer demand. Supply Management is to focus on four improvement concepts on the supply side, addressing the need for rapid and efficient replenishment of products. Enablers are data management and processing capabilities that are needed to permit accurate and timely communication of goods flow between trading partners. Two collaborative concepts : Collaborative Planning, Forecasting and Replenishment and e-business, are key elements of Integrators.

Efficient Healthcare Consumer Response (EHCR)


Efficient Healthcare Consumer Response (EHCR) is a supply chain management (SCM) initiative in Healthcare Industry. The initiatives aims at reducing total healthcare costs and enhancing service quality by improving the effectiveness of the healthcare product supply chain with use of electronic enabling technologies.

A study in US reviewed that the healthcare products industry could save as much as $11 billion in supply chain process costs and significant improvement in healthcare services to consumers with the adoption of the best practices and enabling technologies of EHCR. The potential areas of improvements are inventory management, order management, transportation and physical distribution. These savings are tied closely to the adoption of several best practices and enabling technologies, including activity-based costing, Health Identification Number (HIN) and Universal Product Number (UPN) identification standards, electronic data interchange and bar coding. These would be the principal means through which companies would reduce their operating costs when used with different information systems. Collaborative efforts of all stakeholders are essential to create a common framework to ensure a common implementation strategy and common standards for full deployment of these foundation practices and technologies.

Efficient Foodservice Response (EFR)


Based on ECR, a group of foodservice supply chain members started Efficient Foodservice Response(EFR) to promote SCM in Foodservice Industry. EFR aims at simplifying product flow, information flow and funds flow within the foodservice supply chain. They discussed the applicability of ECR in foodservice operations and identified critical issues within the framework of the value chain's operations that needed to be addressed. From an exhaustive study by CSC Consulting and Stanford University, a potential cost savings of $14.3 billion is identified through the use of existing technology and efficiencies. The industry players, consisting of brokers, manufacturers, distributors, operators and representatives from related industry associations, worked with pioneers from the ECR initiative to develop a model specifically for the foodservice industry. Their goal is to educate industry members on how they can use available tools and execute their unique business strategies to enhance consumer value.


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