A01 chaf6542 06 se fm indd

  3 

The move towards Internet commerce: 1996 onwards. The Internet was thought to 

provide a  lower‑  cost alternative to traditional EDI for smaller suppliers and customers, 

through using a  lower‑  cost  value‑  added network. So, one objective of the project was to 

extend the reach of electronic communications with supply chain partners. The second 

Upstream supply 

chain

Transactions between 

an organisation and 

its suppliers and 

intermediaries, equivalent 

to   buy‑  side  e‑commerce.

Downstream supply 

chain

Transactions between 

an organisation and 

its customers and 

intermediaries, equivalent 

to   sell‑  side  e‑commerce.

Supply chain 

network 

The links between an 

organisation and all 

partners involved in 

multiple supply chains.

Efficient consumer 

response (ECR)

Creating and satisfying 

customer demand by 

optimising product 

assortment strategies, 

promotions, and new 

product introductions.

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Part 2  Strategy and applications

Box 6.1

Efficient consumer response (ECR)

The ECR concept was developed for the food retailing business in the USA but since then it has been applied 

to other products and in other countries. It was originally developed by David Jenkins, then chairman of Shaw’s 

supermarkets, to compete with other players such as  Wal‑  Mart. Supply chain management had traditionally 

focussed on efficient product replenishment, whereas the focus of ECR is on demand management aimed 

at creating and satisfying customer demand by optimising product assortment strategies, promotions and 

new product introductions (Legner and Schemm, 2008). Figure 6.3 shows the complexity and lead times of 

Figure 6.3

 Inter‑  organisational process flow for introduction of a new product

Source: Excerpted from Towards the interorganisational product information supply chain: Evidence from the  

retail and consumer goods industry by C. Legner and J. Schemm © 2008. Used with permission from Association 

for Information Systems, Atlanta, GA,  404‑  713‑  7444, www.aisnet.org. All rights reserved.

Design new

product

MDM (global)

Distribute

product data

Create

product locally

MDM (global)

Production data creation

Consumer Products Company

Prepare

production

and logistics

Plan retail

distribution

MDM (global)

Create

product locally

MDM (global)

CM

Production data creation

Retail Company

Logistics

MDM

Create

quotation

Transmit

quotation

Supplement

logistics data

Prepare

logistics data

Transmit

logistics data

Pr

ovision of

logistics data

Data supplementation

th

ro

ugh 

re

tailer

Pr

oduct Intr

oduction

Pr

ovision of

distribution data

Request

quotation

Assortment

planning/

Negotiation

Take product

into

assortment

Request

logistics data

Maintain

prices and

conditions

Arrange

product

distribution

Prepare

distribution

data

Transmit

distribution

data

Assortment Planning

Request

distribution

data

Capture

distribution

data

Present

product to

customers

Examine

product

Supplement

data

Supplement

data

Supplement

data

Capture data

in ERP

Receive

logistics data

#1 Product

presentation

(–6 months)

#2 Quotation

(–4 months)

#3 Listing data

(–2.5 months)

#4 VMI data

(–1.5 months)

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Chapter 6  Supply chain management

was to broaden the type of communications to include catalogue ordering, freight for‑

warding and customer ordering. The strategy divided transactions into three types: 

(1) strategic (high volume, high value, high risk) – a dedicated EDI line was considered 

most appropriate; (2) tactical (medium volume, value and risk) – EDI or Internet EDI 

was used; (3) consumer transactions (low volume, value and risk) – a range of  lower‑  cost 

 Internet‑  based technologies could be used. The main barriers to implementation at this 

stage have been business issues, i.e. convincing third parties of the benefits of integration 

and managing the integration process.

More recently, BlueScope Steel has introduced bluescopesteelconnect.com (Figure 6.4) 

which is a secure  Internet‑  based steel procurement solution which allows customers to order 

and confirm the status of products. It also offers users the ability to check statements and 

download invoices in real time, simplifying reconciliations.

The implementation of SCM at BlueScope Steel reflects changing developments in the 

wider industry which are summarised in Box 6.2.