The retail sector is by no means free of inventory concerns and has applied its own best practices to keep waste out its supply chains. The best application of this mentality, and in contrast with other models, has been the prudent use of technology to bring substantial benefits to collaborative planning.

As a variation on a now familiar theme, techniques similar to those found in VMI and JIT have come into practice for finished goods under the monikers Efficient Consumer Response (ECR) and Quick Response (QR). Although the same in principle, ECR and QR are different from a VMI model for a couple of important reasons. First, ECR and QR apply to finished products in a consumer goods model. Applicable to both grocery and hard consumer goods (electronics, etc.), this type of merchandise is in the last stages of its supply chain journey, just prior to getting into the hands of the final user.

Another major difference between ECR/QR and VMI is that the retail sector has historically used technology much more effectively than other industries have. The application of standards-based bar code technology in the retail sector has allowed for much more effective timing of supply with demand, inventory management and a complete reversal of the cash-to-cash cycle. Without bar code standards like the Universal Product Code (UPC), none of the fundamentals of ECR/QR would be possible, making the already slim margins in retail that much more difficult to achieve.

ECR/QR is made...