Efficient Customer Response (ECR)
A strategy to provide better service to customers by strengthening the cooperation between multiple organizations within a company.
Efficient Customer Response (ECR) Details
Happy customers are the key to a company’s success. Happy customers bring more publicity, money, and innovation, which leads to growing profits for the company. Many companies have found that making customers their priority is vital.
However, maintaining customers’ happiness comes with a lot of unique challenges. Companies need to analyze, predict, and adapt to their customers’ constantly changing preferences and capacities to make customers as happy as possible. The best way to achieve maximum customer satisfaction is to follow the four pillars of Efficient Customer Response (ECR).
Customers’ demands are always changing and depend on many variables, such as season, purchasing power, financial policy, and market climate. Properly analyzing these variables will give companies an accurate insight into what customers need. From that data, companies can plan on how to fulfill the needs either by boosting production, hiring a new workforce, or simply streamlining the supply chain.
Companies need to predict the future needs of their customers to prepare for market fluctuations. Massive community events such as Christmas, Easter, and New Year’s Eve give companies clear signs of what commodities are highly sought prior, during, or after these events. Companies should adjust their activity based on these predictions.
Companies should be keen to capitalize on new opportunities. Market fluctuations can create unique, unfulfilled demands. This is where a company should introduce a new product to fill that vacant demand or modify their product to cover the new demand.
Supply Chain Management
A robust supply chain management ensures goods are flowing quickly and without interruptions. Hiring reliable third-party collaborators (shipping company, raw material supplier, outsourcing processes) with a proven track record will ensure fewer hiccups within the supply line. Maintaining proper communication with third-party collaborators is paramount. Constant contact ensures both parties spot every problem that pops up and fixes it immediately without interrupting the supply chain.
Companies should optimize the supply chain cost and performance ratio by choosing the right third-party collaborators, adequate workforce, and factory location. The factory location is significant because a product or raw materials can have different tax rates depending on its financial policy. Furthermore, each country has its unique aspects such as labor cost, environment, and land cost - all of which should be optimized for maximum potential.
A product is the result of multiple refinements of raw materials. Every individual part of the process, supporting materials, and manufacturing batch should have their own unique interchangeable ID. A unique ID is important to ensure everything is adequately tracked, from purchasing process to the final manufacturing process. Interchangeable ID numbers/serials are especially important because it lets different departments recognize different items/parts and immediately work on them.
Companies should have a fast, powerful and responsive application manager to help manage workloads and workforces. All data should be digitalized for faster sending and receiving data, accurate data tracking, and easier archiving. Data from different departments and third-party collaborators should use the same format, for example, millimeters (metric unit), for defining object length.
The key to efficient work inside a company is a harmonic relationship between departments. Teamwork is significantly more efficient than individual work. Keeping intra-department relationship harmonic prevents internal disputes that can disturb the supply line.
Making sure each department has enough resources to do their work is important for their contentment. Assigning an adequate workforce, buying proper equipment, keeping work hours in check, and ensuring they get rewarded properly will keep your departments happy.
Example of Efficient Customer Response (ECR)
A garment company is preparing for next year’s clothing season. They have a planning policy consisting of six months of design and six months of manufacturing. That means the garment company will design clothes for next year’s season; for example, the clothing for summer 2022 will begin production in summer 2021. The garment industry is insanely fast-paced, so they believe starting to make the garments one year ahead will result in a well-polished final product.
Summer 2021 starts, and the garment company reviewed their last summer entries for reference. They also take a look at the current trend and add it to the reference. After careful consideration, they decided to make a shirt with a tropical theme made of polyester. They also make an experimental styling with a sky gradient theme with red-orange as the primary color, resembling a sunset.
The garment company chose to outsource the manufacturing process in third-world countries for cheaper production costs. Because the garment company did proper communication and follow-up, the goods arrived on time in perfect condition and a complete amount. After the summer 2022 sales numbers came in, they noticed that the primary style sales slightly slumped, but the experimental style sales increased immensely. A successful sale directly results from researching the customers’ needs and creating something according to the research data while building an efficient supply line and making sure everything works perfectly.