SCM Terminology

QR (Quick Response)


QR is a management concept created to increase consumer satisfaction and survive increasing competition from new competitors. It intends to shorten the lead time from receiving an order to delivery of the products and increase the cash flow.

The QR (Quick Response) system, a production and distribution system for quick response to the market, was developed for the U.S. textile industry to survive the global competition with low-cost foreign companies. VICS (Voluntary Interindustry Commerce Standards Association) is the organization that is promoting QR. The EDI (electronic data interchange) protocol used for the QR system, that is a standard protocol for information exchange between the U.S. retail industry and companies, is also called "VICS", which is also a subset of ANSIX. While "VICS" is the name of the organization that promotes QR, it is also the name of EDI, i.e. the exchange of data (all data such as order placement and billing data) between companies who support QR.

QR was created from a project to improve the supply chain management of the daily necessities industry such as the textile industry and ECR (efficient consumer response) concept was created by the processed food distribution industry. Both concepts were developed from the standpoint of increasing consumer satisfaction and as a mean to survive againat certains types of competitors that producer-retailer alliances call discounters and category killers. These concepts intend to shorten lead times from order receipt to delivery, minimize unsold inventory by holding minimum inventory levels, and increase cash flow.

Both QR and ECR are said to be concepts suggested by Kurt Simon Associates, a US consulting firm. They contain the same concept as constraint-based supply-chain management, which aims to increase the speed of product flow at the manufacturing floor, shorten lead times, and improve throughput.

In other words, supply chain management is a methodology for increasing the speed of product flow across companies and finally increasing cash flow to strengthen the survival power as industry bodies. Although QR, ECR, and supply chain management have different names, they all have the motive of "survival" in common.

Taken with kind permission from the book:
"Understand Supply Chain Management through 100 words" by Zenjiro Imaoka.