Study of Collaborative Planning, Forecasting and Replenishment

INTRODUCTIONCPFR – Collaborative Planning, Forecasting and Replenishment – is a cross-industry initiative designed to improve the supplier/manufacturer/retailer relationship through co-managed planning processes and shared information. It is an integrated supply chain method to improve efficiency through direct collaboration between all trading partners with the ultimate focus on the consumer.

THREE MODES OF CPFRBASIC CPFR

DEVELOPED CPFR

ADVANCED CPFR

STEPS OF CPFR:The 9 steps were: Develop Front End Agreement Create the Joint Business Plan Create the Sales Forecast Identify Exceptions for Sales Forecast Resolve/Collaborate on Exception Items Create Order Forecast Identify Exceptions for Order Forecast Resolve/Collaborate on Exception Items Order Generation

BENEFITS OF CPFR

According to demand-

Enhanced relationship

Greater sales

Category management

Improved product offering

According to supply

Improved order forecast accuracyInventory reductionImproved technology ROIImproved overall ROIIncreased customer satisfaction

OPPURTUNITIES OF CPFR: The main opportunities exist in trading relationships with

one or many of the following characteristics, where: Demand is hard to predict Promotional activities play an important role New product introductions are frequent Lead-times for production and/or replenishment are

long Product life cycles are short (e.g. fashion) Forecast accuracy is low High levels of inventory exist in the supply chains Consumer expectations are frequently not met Seasonal demand variances are significant.

CHALLENGES OF CPFR

Selection of CPFR PartnersSenior Management Buy InTrust Based RelationshipConfidentiality Internal Reward StructureCultural Change