The latest stage of integration in logistics is"quick response",that evolved into" efficient cus-tomer response"(ECR).This links the separate stages of the supply chain,so that a customer buying a product from a retailer automatically sends a message back'through the chain to trigger a response from the manufacturer and other suppliers.For example,when a customer buys a pair of jeans in clothes shop,the EPOS system automatically sends a message back to the wholesaler to say that the stock needs replenishing,then back to the manufacturer to say that it is time to make another pair of jeans,and back to suppliers to say that they should deliver materials to the manufacturer This result is a focus on the consumer, the development of partnership relationships between retailers and their sup-pliers and an increased integration of the components of the supply chain.
There are clear benefits from this kind of integration of the supply chain,including:
* Cenuine cooperation between all parts of the supply chain;
* Eliminating duplication of effort,information,planning,etc;
* Eliminating operations that do not add value to the customer;
* Improving efficiency and productivity to reduce costs;
* Reducing stocks and response times;
* Having actual demand trigger replenishments along the chain;
* Being more responsive to customers;
* Sharing information and links systems;and
* Using available technology including EPOS,EDI and automated order processing.
Organizations are clearly seeing these benefits,and are moving towards greater integration.57 per cent of companies in the USA had some form of integrated supply chain management.Most of the inte-gration consisted of transport,warehousing and inventory,with fewer organizations including functions such as production planning,procurement or sales order processing.Significantly,more than 90 per cent of companies expected an increase in integration over the next three years,with a quarter of com-panies moving to"fully integrated"systems.Only 2 per cent of companies had currently established ECR functions,but this is forecast to increase to 37 per cent over the next three years.
Despite the different understandings of what full integration and even ECR mean,there is clearly an important move towards more integration of the supply chain.