Operating Principles
ECR Europe
A shared vision: Working Together to Fulfil Consumer Wishes Better, Faster and at Less Cost* with a shared business process leading toshared benefits across the Value Chain
ECR Europe Operating Principles
An operational framework for trading partners committed to implement ECR Practice
1. Generating Demand
ECR Practice requires both trading partners:
- to jointly analyse consumer and shopper data in order to mutually understand and respect one’s consumer/shopper marketing objectives when developing and reviewing the category;
- to focus on delivering cost effectively the most relevant set of products and services that truly add choice and value to consumers;
- to jointly define a set of business Key Performance Indicators (e.g.consumer, market, productivity and financial), to measure the results against these objectives.
2. Managing the Supply Chain Efficiently
ECR Practice requires both trading partners:
- to adhere to supply chain management standards and protocols recommended by ECR Europe;
- to jointly define a set of objectives and processes for optimising product planning, forecasting and replenishment as well as in-store logistics:
- to achieve full visibility of product flow along the supply chain so that consumer demand is always met
- to jointly make efforts to move to paperless transactions (e.g. using data flow to clear deliveries and invoices);
- to jointly define a set of objectives and processes for optimising on shelf availability;
- to apply a commonly agreed method in order to evaluate total costs and benefits related to supply chain changes;
- to share benefits and risks whilst adopting a total supply chain view;
- to jointly define a set of business Key Performance Indicators to measure results against these objectives
3. Making Information-Based Decisions
ECR Practice requires both trading partners:
- to exchange information in order to support business decisions;
- to agree on a common process, cost effective for both partners, to systematically gather and/or exchange the best possible information in a structured way;
- to establish a non-discriminatory and transparent process for evaluating the information leading to any business decision (e.g. KPI’s, scorecards);
All information exchange between trading partners should happen in strict accordance with the applicable competition laws.
4. Organising to implement ECR
ECR Practice requires both trading partners:
- to promote the ECR mindset and way of working to all management and staff;
- to dedicate appropriately skilled resources from both sides in order to implement ECR Practice in pursuit of category benefits;
- to invest in ECR Demand Generating, Supply Chain Management and Enabling practices only in pursuit of tangible and measurable business and category objectives;
- to support ECR Practice in their trading agreement, however ECR Practice may not be linked to the trade terms;
- to link personal / team rewards to the defined business KPI’s.
5. Respecting competition law
ECR is designed to serve the interest of the consumer. ECR Practice may not be used to restrict competition between suppliers. Companies undertaking ECR projects should apply ECR Practice in strict respect of applicable competition laws. ECR Europe is committed to strong and fair competition in support of which competition guidelines are issued which focus on demand side projects; in particular they provide:
- that no sensitive information should be exchanged between competitors; and
- that along the supply chain itself, parties should not enter into agreements that restrict the other party in its freedom to set prices, choose trading partners, decide product assortments, and otherwise manage sales to consumers or other customers.
