New supply chain project cuts cost

  • Business
  • Saturday, 07 Aug 2004

THE implementation of the Efficient Consumer Response - Central Item Repository (ECR-CIP) project, aimed at creating a single electronic platform for the retail and supply industry, could potentially save about 5% in supply chain cost across the board. 

For the fast moving consumer goods (FMCG) retail sector in Malaysia, this saving would translate into some RM550mil, Deputy Science, Technology and Innovation Minister Datuk Kong Cho Ha said in Kuala Lumpur yesterday at the launch of the ECR-CIP project, also known as Retail Connect. 

The ECR-CIP project was awarded to Sdn Bhd by the Multimedia Development Corp (MDC) to enable e-business between retailers and suppliers in the FMCG sector. It will be implemented using the EAN.UCC system, globally recognised as the most robust multi-supply chain standards for identification, communication and e-business. 

TradeNex, a subsidiary of the Federation of Malaysian Manufacturers (FMM) formed to build up a local e-manufacturing community, has been working on Retail Connect for the last two years. The FMM had sunk in at least RM20mil in the project, said chairman Datuk Paul Low. 

And MDC had invested an additional RM4mil in “the first in the series of e-business projects supported by the Government under the Multimedia Super Corridor (MSC) flagship application,” said MDC chief executive officer Datuk Dr Mohamed Arif Nun. 

Datuk Dr Mohamed Arif Nun (left) exchanging documents with Datuk Paul Low, witnessed by Datuk Kong Cho Ha.

Quoting a recent study by management consultants AT Kearney, Low said a staggering US$40bil or 3.5% of sales were lost globally each year due to supply chain information inefficiencies.  

ECR sets out strategies to remove unnecessary cost from the distribution system and makes it more responsive to consumers' demand.  

It requires every party within the distribution system, including suppliers, distributors, logistics providers and retailers to focus jointly on processes that would improve the efficiency of the total supply chain.  

The adoption of standardisation for item identification, automatic data capture of information (through barcodes) and electronic transmission of trading messages would enhance the common processes for supply chain efficiency in the retail supply chain.  

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