Efficient Consumer Response, an industry/food store effort to provide maximum consumer satisfaction with minimal structural cost by eliminating waste in ordering, replenishment, assortment and promotions through information technology.
Electronic Data Interchange: the computer-to-computer exchange of structured information, by agreed message standards, from one computer application to another by electronic means and with a minimum of human intervention
*Questions were answered By Kyriacos Nicolaou and Thomas Panagiotopoulos
Tesco Case Study:
Question 1
Benefits for suppliers and retailers:
Suppliers are allowed direct access to store level sales data on their products as well as information on wastage, margin and stock availability. This will assist suppliers to achieve ECR and reduce their own inventories. Suppliers clearly have a better understanding of their specific product lines; better product availability and reduction of inventory. Suppliers can monitor changes in demand almost in real time. The way data is analyzed in a number of ways, it allows suppliers to see how sales perform by distribution centre. The benefits of the suppliers are directly mirrored on the retailing side of things: better management and planning on one side, implies better management and planning on the other. The entire process relies on reciprocity between the two to make it a success (integration has overcome separation).
Question 2
Differences between EDI and Tie:
The EDI system was initially limited to streamlining store replenishment. Subsequently Tesco had begun using it to help its suppliers better forecast demand. Tie was first used in 1997 to achieve a more sophisticated two-way collaboration in its supply chain. One of the most important aims of the Tie system was to shift responsibility for managing products down to the relevant supplier; this stems from Tie’s primary principle, which was to combine Tesco’s retailing knowledge with the product knowledge of its suppliers.
*(the numerous benefits can be seen in the answer for question 1)
Question 3
The reasons why only two of Tesco’s suppliers have fundamentally altered the way they work in terms of the Tie system, most probably revolve around trust issues, and a resistance to change./ They might perhaps feel that divulging too much information to an external entity, can harm their business (i.e information leakage). Additionally, their management might not trust surrendering wholeheartedly to technology. Supplementary reasons for the limited number of suppliers adapting at a high level to the Tie system, might be the high cost of restructuring their business, as well as a lack of personnel able to respond positively to this change.
Supply Change Management
Question 1
Advert 1:
The main processes the manager is responsible for are customer services and supply chain management. Supply chain management in this case will include procurement; product development; coordination of all operating departments; leadership of functional reports; purchasing; master scheduling/ manufacturing control and data management. The manager must have knowledge of dealing with suppliers; systems development; implementation and maintenance; material management; sales forecasting and capacity planning. Furthermore, personal attributes should include excellent communication and analytical skills and thorough IT business management tools, such as SAP; Oracle; BPEX.
Advert 2:
The processes the manager is responsible for are the management of information channels between customer, company suppliers and partners. The manager will thus be required to constantly monitor production against cost to achieve optimum performance levels. His/her skill should include education of a high standard (preferably with a relevant degree), excellent analytical and problem-solving skills; strong systems knowledge and experience in planning and inventory control (preferably in a shortlead-time environment). A high degree of motivation, strong influencing and communication skills are also sought after.
Advert 3:
The processes the manager will be responsible for will include coordination activities between operations and function; and the direct control of distribution and third parties. Skills required include a background of commercial and budget responsibility, and being customer-focused with character, drive and energy.
Advert 4:
The manager will be responsible for efficient distribution operation. Extensive transport and management experience is required, in addition to analytical and planning skills.
Question 2:
It is pivotal to the person hiring, that he ends up offering the job to someone with the necessary skills and experience. Due to the dynamic and delicate nature of the markets the jobs are positioned in, there is no room for mistakes from the manager. He must possess the skills required in order to fulfill his duties, and must have the wisdom (which only comes by implementing knowledge over the course of time and harvesting the results) to support his decisions. Time is crucial to certain processes; therefore there is no time to learn certain skills on the spot, through trial and error.
