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Collaborative Planning,Forecasting andReplenishment (CPFR) and the Network —Cracking the Bullwhip!

Prepared byJames E. deMinBT Infonet

w w w. b t . i n f o n e t .co m

CPFR and The Network

Volume 3

Introduction

This paper explores the network implications of an emerging business initiative in the

consumer goods industry referred to as Collaborative Planning, Forecasting, and

Replenishment (CPFR) where manufacturers, distributors, and retailers jointly work

together to plan, forecast, and replenish products. While reliance upon some form of

communications media is an obvious aspect of any CPFR initiative, all too often the net-

work infrastructure is not adequately considered and the effectiveness of the CPFR initia-

tive suffers. The ability to optimise the global wide area network communications infra-

structure can greatly contribute to the end-to-end performance of collaborative planning

between trading partners. This optimisation at the network-level can then generate

orders-of-magnitude improvements in the business performance metrics of CPFR, which

include; fill rates, supply chain cycle times, supply chain inventory levels, and share-

holder value.

2


Figure #1 - Collaborative Planning, Forecasting and Replenishment (CPFR)

The genesis of CPFR can be traced to 1995/96 when

Wal-Mart and Warner-Lambert (now part of Pfizer), together

with SAP and Benchmarking Capital, initiated an experi-

ment to jointly forecast and plan the replenishment of

Listerine, a popular brand of mouthwash. The experiment

was limited to one Warner-Lambert plant and three

Wal-Mart distribution centres. As a result of CPFR, Warner-

Lambert’s service levels increased from 87% to 98%, while

the lead times to deliver the product decreased from 21 to

11 days. The partnership also increased Listerine sales

by $8.5 million over the test period. The success later

prompted the Voluntary Inter-industry Commerce Standards

(VICS) association, in cooperation with over thirty other

consumer goods companies from the drug, grocery, general

merchandise, and apparel industries, to set up guidelines

for synchronising business processes, forecasts, and

replenishments, now formalised as CPFR. The central

theme of the CPFR guidelines was and still is the alignment

of business processes and standardisation of technologies

to share forecast and other planning information securely,

simultaneously, globally and in real-time.

Therein lies the enormous dependency upon the network,

which is the infrastructure component that must be proper-

ly designed and supported in order to provide these

capabilities (i.e. securely, simultaneously, globally and

in real-time).

Over the last decade collaborative relationships between

trading partners in the supply chain have been recognised

as a recipe for operational and financial efficiency.

Evidence strongly suggests that there are significant

rewards to improving supply chain efficiency. For example,

a U.S. Department of Commerce report indicated that

there is more than $1 trillion in finished goods inventory in

U.S.-based stores, distribution centres and manufacturing

plants. Much of this inventory is "just in case" merchan-

dise that would be unnecessary if trading partners had

better visibility to each other’s plans through real-time

collaboration. Other studies by industry research groups

have suggested that inventory carrying costs for fast-mov-

ing items can vary from between 20% and 100% of its

value on an annualised basis.

The nature and scope of the collaboration between supply

chain partners have taken on many different forms, each

having its own distinct advantages and shortcomings. To

study the benefits of CPFR in realistic situations warrants a

view of the supply chain as a total environment or ecosys-

tem, encompassing all of its components (organisations,

functions, processes, technologies and activities). Doing

so is made all the more difficult as a result of the number

and complexity of the data-driven decisions to be made

within a collaborative supply chain, as well as the inter and

intra-organisational issues that must be addressed.

What management wants to see in the enterprise’s supply

chain is an equilibrium between customer demand and the

production planning. By achieving this goal, production

levels (i.e. supply) can be precisely matched to demand.

3


Figure #2

Equilibrium Between Customer Demand and Production Planning

However, managing supply chains in today’s competitive

world is increasingly challenging. The greater the

uncertainties in such factors as supply and demand,

globalisation of the market, shorter product and tech-

nology life cycles, and the increased use of outsourced

manufacturing, distribution and logistics partners, the

greater is the complexity of the supply chain. These and

numerous other factors unfortunately all too often result

in growing disequilibria between customer demand and

production planning.

In its simplest form, CPFR seeks to permit the more precise

production planning of inventories and a matching of sup-

ply and demand. Success with CPFR is thereby achieved

when production planning has become demand-driven on

an end-to-end basis throughout the supply chain.

During the last two decades enterprise applications such

as those from SAP, i2, Manugistics, Oracle, and others have

begun to provide the automated support for the collabora-

tive business processes that seek to enable CPFR.

However, these technologies in and of themselves pose

some very vexing challenges for network managers who

seek to administer infrastructures that enable the neces-

sary levels of security, performance, scalability and globali-

sation. As a result, the ability of organisations to glean the

benefits of CPFR is largely a function of their success with

properly designed networks that satisfy the requirements

for CPFR. This makes the selection of a global network

service provider of paramount importance to enterprises

undertaking such initiatives.

Supply Chain Management Fundamentals

The supply chain is far from being a low-hanging fruit and

represents an enormous exposure for virtually all organisa-

tions in the consumer goods and other inventory-intensive

industries. Also, supply chain risks come in many different

forms. First, the financial risks can be huge and failure

catastrophic for enterprises who fail in supply chain execu-

tion. Inventory costs due to obsolescence, mark-downs

and stock-outs can be very punishing, with almost immedi-

ate impacts to an organisation’s bottom-line performance.

Personal computers, for example, devalue by more than

one percent per week. Recent statistics from a survey of

major retailers showed that retail mark-downs constitute

approximately 20% of total retail sales volumes.

Mismanaged supply chains, leading to excessive or

mismatched inventory can thereby lead to huge financial

risks. Financial risks can also result from the risk of

reworking stock levels and penalties imposed for non-

delivery of goods. The complexity and uncertainty forces

of a supply chain can also drive what are referred to as

"chaos risks." These chaos effects result from overreac-

tions, unnecessary interventions, second-guessing,

mistrust, and distorted information throughout a supply

chain. The well-known bullwhip effect (addressed later in

this paper), which describes increasing fluctuations of

order patterns from downstream to upstream supply

chains, is an example of such chaos. This increased chaos

will invariably lead to higher costs and inefficiencies

through over-ordering.

4CPFR and The Network

Figure #3

Disequilibria Between Customer Demand and Production Planning


The existence of chaos in a supply chain also means that it

is impossible to make the right decisions for every player

within a supply chain. The risks of making the wrong or

ineffective decisions, or decision risks, become the

inevitable consequence. Thus, it will not be possible to

design optimal production schedules if there is uncertainty

as to when materials or components will be available.

Ultimately, the supply chain is exposed to market risks,

i.e., missing the market opportunities presented. A supply

chain cannot be responsive to changing market trends and

customer preferences if the right market signals cannot be

readily obtained and quickly interpreted. Similarly, a sup-

ply chain cannot successfully penetrate a new market seg-

ment if there is a marked inability to quickly change pro-

duction or available supplies to meet fluctuations in

demand. Finally, market opportunities can be missed

when customers and distributors inadvertently place

orders with impossibly short order lead times that cannot

be met by current production capacity.

A supply chain with high-risk exposure cannot be efficient.

There will always be tangible risks in a supply chain, which

can lead to poor performance, but there are also intangible

elements such as the attitudes and perceptions of the

users and members of the supply chain. The intangible

lack of confidence in a supply chain leads to actions and

interventions by supply chain members, which collectively,

could further increase the risk exposure. A classic example

of this is the potential reaction from the customer and/or

distributor-facing end of a supply chain. For example, if a

sales team believes that order cycle and order fulfillment

times are not reliable, they will devise their own means of

addressing such perceived limitations. They may order

stock so as to have adequate supply levels to support their

existing customer demands and submit additional phan-

tom orders (i.e. creating their own private buffer stock) to

secure additional on-hand supply, which thereby causes

inefficiencies. Similarly, they may place orders in anticipa-

tion of potential future demand with the intention of later

cancelling such orders prior to scheduled shipment if

anticipated demand does not materialise. This risk spiral

Figure #4 - Chaos Dynamics of the Supply Chain


exists everywhere, and the only way to break the spiral is

to find ways to increase confidence in the end-to-end sup-

ply chain. Therefore, the elements of the supply chain that

can reduce the lack of confidence — visibility, control and

chaos must be adequately understood and addressed.

>> Visibility — Confidence in a supply chain is weakened

when end-to-end order cycle time, i.e., the time it takes

from when an order is requested by a customer through to

delivery, is excessively long. The increased globalisation

of supply chains and the prevalent use of subcontract

manufacturing, distribution and logistics partners can con-

tribute to the length of time it takes to complete all the

needed steps in the order fulfillment process. Associated

with pipeline length is the lack of visibility within the sup-

ply pipeline. Hence, it is often the case that one member

of a supply chain has no detailed knowledge of what goes

on in other parts of the chain - finished goods inventory,

material inventory, work-in-process, actual demands and

forecasts, production plans, capacity, yields, and order

status. Visibility issues can be addressed by providing all

partners with access to real-time information systems such

as through extranets, trading exchanges, direct ERP-to-ERP

integrations, etc. However, to be effective such systems

must deliver reliable and predictable end-to-end perform-

ance, with security provisions that permit only authorised

users to access the information.

>> Control — In addition to visibility, supply chain confi-

dence requires the ability to take control of the supply

chain operations. Sadly, most supply chains do not have a

great deal of control once the order is released. Hence,

Figure #5 — CPFR Shared Processes and Data


even if a supply chain manager has visibility of some por-

tion of the pipeline, he/she often cannot make changes

within short time periods to accommodate demand

fluctuations. For example, even if information is obtained

on demand changes or yield shortfalls, the supply chain

manager may be helpless: (a) since the suppliers may not

be flexible to respond to such changes, (b) there are

no expediting options available, or (c) the production line

is inflexible and production scheduling changes are not

feasible, etc.

Semiconductor manufacturers are often faced with this

problem of lack of control. The long lead times by factories

are such that, even if the manufacturer is made aware of

sudden market demand changes, it takes too long to

respond and the market opportunities are then missed.

The problems of control can be partially addressed by

initiatives that seek to provide real-time access to stan-

dardised internal and external master data related to raw

materials, components, finished goods, production plan-

ning, etc. Such initiatives often involve agreeing upon

standard data formats, XML transactions, etc., which lead

to very large transactions being passed over the global

network infrastructures. Hence, the network designs must

be able to accommodate such standards, as well as exhibit

the necessary security/access controls so that partners are

willing to freely exchange their data with other members of

the supply chain. Therefore, network firewalls, managed

extranets, encryption techniques, etc. all become crucial to

the success of addressing control issues.

>> Chaos — Without supply chain confidence, members

of the supply chain are vulnerable to chaos and decision

risks. Sales people may start over-ordering since they do

not have timely visibility of the correct demand signals, or

they know from experience that supplies may be late or

insufficient to fill the complete orders. Production plans

are thereby based upon inflated production lead times due

to similar lack of visibility and control. "Safety lead times"

are commonly used in standard Manufacturing Resource

Planning (MRP) systems, since production planners do not

want to incur production delays. The lack of means to

expedite or be flexible in manufacturing also implies that

any yield shortfalls or production downtimes have to be

made up for by additional production, and as a result,

lead times are often stretched out in production plans.

The irony is that when planned production lead times

are inflated, actual lead times will gradually match the

planned target, a human behaviour known as Parkinson’s

Law, which prescribes that when a goal is too lax, then

the tendency is for workers to relax and actually "achieve"

the goal.

Once information can freely flow across the supply chain,

then an organisation is positioned to achieve reductions

in total system inventory while simultaneously improving

responsiveness to demand. The ability to match supply

more closely with demand is often referred to as agility

and the key to agility is speed. If flows through the

pipeline can be accelerated then it stands to reason that

volatile unpredictable demand can be met more precisely.

Even better, there are lower levels of inventory in the

pipeline because it is shorter — in effect information has

been substituted for inventory — a key concept in under-

standing supply chain management. Again, information is

substituted for inventory, which is the basis for enabling

significant efficiency improvements.

However today, agility requires synchronisation from

one end of the supply global pipeline to the other.

Synchronous supply requires transparency of demand and

pipeline inventory in as close to real-time as possible. It

also requires a willingness on the part of all the members

of the supply chain to work to a single supply chain plan.

A decade ago such an idea would have seemed fanciful.

However, two factors have significantly changed the land-

scape of supply chain management in the last few years.

The first of these is the availability of the technology and

software applications to enable the capture and sharing of

information across a supply chain — increasingly using

extranets. The second, is the increasing willingness of

members of the supply chain to put aside the traditional

arms-length relationships with each other and in its place

move towards closer, partnership-type arrangements.

Again, the networks over which these collaborations take

place must possess the necessary levels of performance,

scalability, security and reliability in order for these bene-

fits to be realised to their maximum potential.

CPFR Fundamentals

The key concepts behind CPFR can perhaps best be

explained by comparing it to the traditional Reorder Point

(ROP) approach. Under a ROP procedure, retail level

planners collect product information and marketing pro-

grams at the product distribution point level. Combining

this information with point-of-sale (POS) data, item-level

forecasts and event calendars that record promotional

dates, special marketing programs, etc., are thereby

generated. Based upon inventory and/or service level

targets, the forecasts (and all the corresponding errors)

are used to generate reorder points. When inventory of

an item reaches the specified reorder point, the

retailer/distributor places an order to the manufacturer.

If the product is available, it is shipped to the retailer/

distributor; if not, the retailer/distributor will seek alterna-

tive solutions to replenish the item. The manufacturer,

on the other hand, collects product knowledge and

marketing programs of major retailers from public sources.

Based upon retailer/distributor orders and historical

shipment information, the manufacturer generates a

forecast by item, and in most cases, by geographic region.

These forecasts also drive the production of the items,

as well as the geographic regions where the items will be

produced and warehoused. However, such independent

planning between the members of the supply chain can

result in extended cycle times, poor customer service,

inefficient use of working capital, items being produced

and/or stocked in the wrong geographic regions, etc.

During the last decade CPFR emerged as a method to

counter some of the shortcomings of the ROP approach.

The objective behind a CPFR initiative is that the trading

partners work off a common forecast or plan. That is, the

retailer, distributor and the manufacturer collect market

intelligence on product information, store promotional

programs, etc., and share the information in real-time over

a global Wide Area Network (WAN). In most cases, the

retailer or distributor owns the sales forecast. If the

manufacturer agrees with the forecast, automatic

replenishments are made to the retailer/distributor via

predetermined business contracts so that a specified

level of inventory or customer service is maintained. If the

manufacturer and retailer cannot agree upon the forecasts

or if there are exceptions, such as an unusual seasonal

demand or a new store opening, the forecasts are recon-

ciled manually. Prior to implementing CPFR, the distributor

and the manufacturer agree upon several key factors, such

as how to measure service levels and stock-outs, how to

set inventory and service targets, etc. However, with CPFR

the distributor and manufacturer will jointly redesign key

business processes such as setting increased sales

objectives, or improving transaction mechanisms to reduce

costs of all parties.

If life were only that simple!


The "Bullwhip Effect"

The bullwhip effect was coined from an initiative

undertaken by logistics experts at Procter & Gamble (P&G)

who were examining the order patterns for one of their

best-selling products, Pampers. Its sales at retail stores

were fluctuating, but the variabilities were not particularly

excessive. However, these experts were surprised by the

increasing degree of variability in the distribution of

orders. When they looked at P&G's orders of materials to

their suppliers, such as 3M, they discovered that the

swings were even greater. At first glance, the variabilities

did not make any sense. While the consumers, in this

case, the babies, consumed diapers at a steady rate,

the demand order variabilities in the supply chain were

continually amplified as they moved up the supply chain.

P&G called this phenomenon the "bullwhip effect," and

the phenomenon holds true for virtually every organisation

whose product or service involves multi-level supplier

relationships, regardless of the industry. In some

industries, this also is known as the "whiplash" or the

"whipsaw" effect.

Distorted information from one end of a supply chain

to the other can lead to tremendous inefficiencies.

Companies seeking to effectively counteract the bullwhip

effect must start by thoroughly understanding its

underlying causes, which can be very complex.


Figure #6 — Bullwhip Effect


When a supply chain is plagued with a bullwhip effect and

demand information is distorted, the following business

impacts can often result:

>> Excessive inventories

>> Poor product forecasts

>> Insufficient or excessive capabilities

>> Lost revenues

>> Misguided capacity plans

>> Inactive transportation and logistics

>> Missed production schedules

>> Poor customer service

>> Uncertainly and costly production

>> High costs for corrections (e.g. expedited shipments,

overtime, etc.)

Essential to minimising the bullwhip effect is to first under-

stand the forces, which drive customer demand planning

and inventory consumption, as they are the triggers for

replenishment order quantities at various points in the

supply chain. The most effective process for smoothing

out the oscillations of the bullwhip effect will typically be

distributors and suppliers understanding what drives

demand and supply patterns and then, collaboratively

working to improve information quality and compressing

cycle times throughout the entire supply chain process.

These opportunities for improvement will typically include

the following:

>> Minimise the cycle time in receiving projected and actual

demand information by interconnecting systems on a

24/7 basis, with the objective of near zero downtime and

latency of data updates.

>> Establish the monitoring of actual demand for product to

as near a real-time basis as possible.

>> Understand product demand patterns at each stage of

the supply chain by similarly interconnecting logistics

providers, raw materials suppliers, secondary

suppliers, etc.

>> Increase the frequency and quality of collaboration

through shared demand information such as

establishing direct ERP-to-ERP collaboration between

supply chain partners.

>> Minimise or eliminate latencies, information queues

and batch capture/update processes that would

otherwise create information flow delays. This may be

greatly aided by the use of network monitoring and

application-level reporting tools, as well as network-

based probes, which can be used to identify such

delays on a continual and real-time basis.

>> Eliminate inventory replenishment methods that launch

"demand lumps" into the supply chain.

>> Eliminate incentives for customers and distributors

which directly cause demand accumulation and order

staging prior to submitting replenishment requests,

such as volume transportation discounts.

>> Minimise incentivised promotions that will cause

customers to delay orders and thereby interrupt

smoother ordering patterns.

>> Offer products at consistently good prices to

minimise buying surges brought on by temporary

promotional discounts.

>> Identify, and preferably, eliminate the cause of customer

order reductions or cancellations.


>> Provide vendor-managed inventory (VMI) services by

collaboratively planning inventory needs with the

customer to projected end-user demand levels then,

monitor actual demand to fine tune the actual VMI lev-

els. VMI can often increase sales and profits especially

in industries where buyers can go to alternative sources

if the primary provider is out-of-stock.

Even the most modern of supply chain management sys-

tems, with all the bells and whistles, cannot automatically

stop the "bullwhip effect." It’s a demand management

process problem with very broad implications because it

often encompasses policies, enterprise applications (ERP,

SCM and CRM), interfaces, networks, trading exchanges,

data format inconsistencies, timing differences, etc.

It is therefore a mission imperative to continually seek to

reduce any potential disruptions to the accurate and real-

time communications between supply chain partners. By

doing so, the variabilities resulting in the bullwhip effect

can be similarly reduced. However, the techniques for

minimising the bullwhip effect represent very daunting net-

work challenges that involve seeking near 100% system

availability, predictable performance, scalability and

access controls across a global environment between

numerous partners. As a result, even seemingly minor

improvements in network performance, availability and

reliability can yield orders-of-magnitude contribution to

business performance.

Item Synchronisation

No discussion of supply chain management and CPFR

would be complete without addressing the process of item

synchronisation, which is the exchange (at a point in time)

of basic business data used throughout the supply chain

process to create a common understanding between trad-

ing partners. This includes product and price data and

trading partner location information.

To understand the importance of item synchronisation

consider the following statistics, based upon a study

performed by A.T. Kearney, a leading management

consulting firm:

>> Within the North American retail market, supply chain

inefficiencies result in annual lost sales of $40 billion,

or 3.5% of total sales.

>> 30% of items in retail catalogues have data errors, which

cost between $60 and $80 each and consume

25 minutes of manual cleansing.

>> 60% of invoices generated errors and 43% of invoices

resulted in deductions.

>> For new products it can take up to four weeks for

complete and accurate item data to reach the retailer

for entry into their procurement systems.

These data inconsistencies result in inaccurate purchase

orders, credit transactions, payments and an operational

cost to resolve and correct. As noted previously, a basic

requirement of CPFR is the reliance upon the data

exchanged between partners. Therefore, before activities

such as ordering and delivery can accurately occur, data

must be exchanged and synchronised to ensure alignment

between the partners.

Effective item synchronisation is based upon the electronic

exchange of data and the continuous maintenance of data

attribute values between two or more different systems to

ensure item information alignment. The end result is that

the data attribute values are the same within all of the


systems, both seller and buyer, and the processing of

business documents can thereby be performed without

content exceptions.

The methods of accomplishing item synchronisation

include the following:

>> Peer-to-Peer — The seller transmits item and price

information directly to the buyer. This may be performed

in a variety of ways, both electronic and manual: EDI

(electronic data interchange), CD-ROM, spreadsheets, etc.

>> Data Pool — The seller and buyer agree to share a

common database of product/price information. This

is accomplished through the use of third party catalogue

services. The seller sends data to the third party and the

buyer pulls data from various sellers from the same

third party.

>> Trading Exchange — A number of exchanges, or

e-marketplaces, have emerged in the last several years.

As members of the exchange, the seller can send product

and price data to the exchange and the buyer can pull data

from the exchange.

>> Service Bureaus such as UCCnet — UCCnet is a owned

subsidiary of the Uniform Code Council (UCC) that provides

global item registry and data synchronisation services for

subscribing organisations.

Item synronisation is almost always based upon the use of

agreed-to or mandated data exchange standards such as

EDIINT AS2 (Electronic Data Interchange Over the Internet

Applicability Statement 2). These transactions can often

create challenges to the global WAN over which they are

exchanged as a result of their sizes and other unique

characteristics.

Again, the global WAN plays a crucial role in an organisa-

tion’s ability to successfully accommodate the require-

ments of item synchronisation.

EDIINT/AS2

EDIINT/AS2 has become the standard data communica-

tions protocol for conducting and managing supply chain

transactions between partners.

EDIINT is a working group of the Internet Engineering

Task Force (IETF). Formed in February 1996, EDIINT was

chartered by the IETF to create a set of secure protocols for

sending EDI data over the Internet. The two EDIINT

standards that have been certified are AS1 and AS2.

>> AS1 provides Secure/Multipurpose Internet Mail

Extensions (S/MIME) encryption and security over

Simple Mail Transfer Protocol (SMTP). S/MIME secures

data with authentication, message integrity, non-

repudiation, and privacy features and is the primary

means of transporting most Internet email. SMTP is the

protocol used by most email systems for sending email

messages between servers.

>> AS2 provides a solution for securely exchanging EDI

using MIME and the Hypertext Transmission Protocol

(HTTP) instead of SMTP as the transport protocol. AS2

specifies the means to connect, deliver, validate, and

reply to (receipt) data in a secure and reliable way.

AS2 does not concern itself with the content of the EDI

document, only the transport. AS2 essentially creates a

wrapper around EDI flat files and provides security and

encryption around the HTTP packets.


While EDIINT/AS2 is a sound, proven and increasingly

popular method for exchanging information across a

supply chain, it does create network challenges associated

with ensuring adequate security, performance and network

bandwidth sizing. For example, an EDIINT message

contains numerous headers, which increase transaction

sizes. Such factors must be considered when designing a

network that will satisfy required levels of performance

and scalability.

Figure #7 — Ediint AS2 Transaction Flows


Typical EDIINT/AS2 headers include the following:

Exchanging data via EDIINT/AS2 is a step in the direction of

easing the pain associated with managing multiple streams

of information between partners in a global supply chain.

However, the network challenges are much more complex

than merely connecting to the Internet.

Network Implications

The overriding objective of supply chain management and

CPFR are to provide a high velocity flow of high quality and

relevant information that will enable suppliers to provide an

uninterrupted and precisely timed flow of materials to dis-

tributors and customers. These goals are dependent upon

a robust global communications infrastructure. Also,

enterprise-class applications used to support CPFR, such as

those from SAP, i2, Manugistics, Oracle and others, have

become the cornerstone of most multinational corpora-

tion’s (MNCs) supply chain management strategies.

Adopting such a software suite can provide numerous

advantages for an enterprise seeking to automate its

inventory and production planning processes. However,

these applications in and of themselves represent numer-

ous network challenges as a result of such factors as their

transactional characteristics, the geometric increase in

transactional growth resulting from A2A transactions (i.e.

transactions created by one application interacting with

another), etc. For example, a single order transaction

initiated by a user of a CRM application can be multiple

Header ElementFromToDisposition-Notification-ToMessage-IDSubjectDisposition-Notification-OptionsReceipt-delivery-optionReceipt-report-typeReceipt-security-selectionInput-formatAgentApplicationDate TimeRefNumUserParam

GISB-VersionTransaction-setInput-dataReceipt-disposition-toDateTransaction-ID

Time-cPriorityExpiration

ContentsSenderRecipientParty to receive receiptsUnique identifierText describing contentsDelivery options for MDN’sDelivery options for General RecieptsType of receipt to returnType of crypto to apply to receiptToken to describe data type of payloadIndication of 3rd party involvementObject method to invoke at receiver’s serverPayload creation date/timeUnique message reference numberCatch all headers provided by sender, repeated byreceiver in receipt/response messages. Primarily used for state/content.Protocol versionIdentification of transaction type identifierName associated with the payloadParty to receive General RecieptMessage creation dateUnique identifier contained in receipt. Combined withReference Number. Uniquely identifies a package.Date/Time of record acknowledging receipt by receiverMessage PriorityDelivery Expiration


megabytes in size and can require greater than 1,000

turns (round-trips between servers) to transmit the

necessary data between servers interconnecting

members of an integrated supply chain.

The challenges of accommodating such transactional char-

acteristics over a global WAN cannot be underestimated.

Also, there may be literally millions of such transactions

processed throughout the course of the average month,

with each having requirements for real-time performance,

access controls, 24/7 availability, etc.

Hence, enterprises seeking to undertake CPFR initiatives

must be prepared to address the communications chal-

lenges of integrating the processes, industry-specific data

exchange formats, software applications and partners

within the supply chain.

BT Infonet’s Application-Defined Networking (ADN)

approach addresses the challenges of business processes

and enterprise applications by designing networks that are

optimised for clients’ specific business objectives,

processes and applications. By utilising this approach

clients benefit by having fully managed global network

infrastructures that are "right-sized" to the unique charac-

teristics of the enterprise and the applications in use.

As a result, optimisation of process effectiveness is

achieved by a communications infrastructure that is

responsive, scalable and secure.

Figure #8 - Transactional Characteristics of Interfaced Enterprise Applications


Figure #9 - Application Defined Networking (ADN)

In summary, there is no single risk-free formula

for effectively implementing CPFR initiatives

within an enterprise. Such initiatives require the

reshaping of relationships between trading part-

ners, establishment of collaborative business

process environments and the implementation

of software technologies that are exceedingly

complex and inherently risky. The global WAN

implications of these initiatives are crucial to

their ultimate success. BT Infonet’s ADN

approach and expertise with the optimisation of

processes and enterprise-class applications can

greatly benefit organisations undertaking such

initiatives. Networks designed using BT Infonet’s

ADN methodology represent the best value to

multinationals seeking to derive ROI from their

technology investments.

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Infonet, DialXpress, Global Connect, Global Workplace, PerspeXion and The World Network are registered trademarks of Infonet Services Corporation. DialXpressway, FirstWatch,GRXpress, Insight Matters, MobileXpress and SiteWise are trademarks of Infonet Services Corporation. BT Infonet is a trademark of British Telecommunications plc. Other prod-uct names that may be used herein are for identification purposes only and may be trademarks of their respective companies. Copyright © 2005, Infonet Services Corporation.All rights reserved. 06/05 MP-WP018-02-BT.

BT Infonet Worldwide Sales Headquarters

Asia-Pacific8 Temasek Boulevard#36-01 Suntec Tower ThreeSingapore 038988Tel: +65 6820 3518 Fax: +65 6820 3520

Europe, Middle East and Africa350/358 Avenue LouiseBox 3B-1050 Brussels, BelgiumTel: +32 2 627 39 11Fax: +32 2 640 97 41

Latin AmericaMardoqueo Fernandez 128Piso 7Providencia, Santiago, ChileTel: +56 2 368 9400Fax: +56 2 368 9415

North AmericaOne Parkview PlazaSuite 610Oakbrook Terrace, Illinois60181 USATel: +1 630 573 9000Fax: +1 630 573 1003

BT Infonet CorporateHeadquarters2160 East Grand AvenueEl Segundo, California90245-5024 USATel: +1 310 335 4700Fax: +1 310 335 4507

BT Group plc CorporateHeadquarters81 Newgate StreetLondon, United KingdomEC1A 7AJTel: +44 121 433 4404Fax: +44 1903 833371

An ISO 9001 Registered Firm

About BT Infonet

Infonet Services Corporation, a member of the BT Group plc group of

companies, known for its quality of service, is a leading provider of

managed network communications services for multinational entities.

Employing a unique consultative approach, BT Infonet offers integrated

solutions optimising the complex relationship between enterprise

applications and the global network. Extensive project management

capabilities are the foundation for the services and solution offerings

(broadband, Internet, intranet, multimedia, videoconferencing, wire-

less/remote access, local provisioning, application and consulting serv-

ices) positioning BT Infonet as a single-source partner for multinational

entities. In particular, BT Infonet IP VPN solutions offer multinationals a

unique combination of Private and Public IP services as well as a full

set of Managed Security and Mobility Services.

Rated “Best in Class” overall in Telemark’s survey of Global Managed

Data Network Services, Infonet Services Corporation has also won “Best

Customer Care” and “Best Carrier” at the World Communication

Awards. Founded in 1970, Infonet Services Corporation owns and oper-

ates The World Network®, accessible from more than 180 countries, and

provides local service support in over 70 countries and territories.

Additional information about Infonet Services Corporation is available

at www.bt.infonet.com.

BT Group plc is a public limited company registered in England and

Wales under registration number 4190816 with listings on the London

and New York stock exchanges. Additional information about the com-

pany is available at www.bt.com/aboutbt.

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