The basic intent of collaboration in developing supply chain inventory strategies is to reduce the reliance on forecasting demand, and instead, allow suppliers to respond to demand on a just in time basis. It requires extensive cooperation and information sharing among distribution channel participants. Some techniques commonly used include quick response, continuous replenishment, vendor managed inventory and profile replenishment.
Quick Response (QR) is a cooperative effort between retailers and suppliers to improve inventory velocity by providing merchandise supply that closely matched the consumer buying patterns. The point of sale information about specific products is exchanged between the retailers and manufacturers. For example, instead of operating on fifteento thirty day order cycles, QR arrangement can replenish inventory in six or fewer days. With a faster and dependable order response, inventory can be committed as required, resulting in increased turnover and improved availability.