The key types of economy exploited by FGP are those related to internal control and coordination. It can be argued that this opportunity has arisen through two driving factors: the "leaning" of supply chains and the enabling developments in ICT. The former process, also known in industry as "Quick Response", has been ongoing throughout the 1990s and into this decade. UK retailers,such as Tesco,ASDA and Sainsbury's, after removing backstage inventory holding in stores, have progressively lowered inventory holding in DCs, pushing up inventory stock turns and improving the speed of product flow. This had led to smaller,more frequent order being placed on supplying manufacturers and consequently deliveries often using CCs to drive up full truck loads.However,the coordination of this in bound consolidation network,managed by partnering manufacturers ,was poor.With modern technological developments such as transport management systems,it is now possible to manage this network substantially more efficiently. This has been exploited through the switch to FGP where the retailer gains coordinating control over all in-bound flows,thus optimizing consolidation possibilities. In the future, there is capability within the case study company to generate further economies by combining primary and secondary distribution.
The change to the coordinated management of all in-bound flows leads to another economy, economies of information Porter argues these occurs.,"market information may well flow more freely through one organization than through a series of independent parties". Centralised coordination and control of the distribution activity provides this economy, replacing a myriad of information processing activities undertaken by many organizations to plan and control these transport flows.
In addition, by taking control of the inbound flow, the possibility of achieving greater confidence in delivery performance and therefore integrating these with the distribution centre processes have also occurred. This type of economy Porter referred to as an economy of combined operations-"efficiencies gained by combining distinct operations together thus reducing handling costs or slack capacity". This economy is enhanced through the awarding of bigger contracts to haulers than were previously available, enabling the negotiation of better terms.