Supply Chain Management - Collaborative Planning, Forecasting and Replenishment (CPFR)
Collaborative Planning, Forecasting, and Replenishment (CPFR) takes a collaborative approach to supply chain management and information exchange among trading partners. The driving premise of CPFR is that all supply chain participants develop a synchronized forecast.
Authors
Introduction
Collaborative Planning, Forecasting, and Replenishment (CPFR) takes a collaborative approach to supply chain management and information exchange among trading partners.
The driving premise of CPFR is that all supply chain participants develop a synchronized forecast. Every participant in the supply chain involved in a CPFR process — supplier, manufacturer, distributor, retailer — can view and amend forecast data. Therefore, CPFR puts an end to independent guesswork in the forecasting process by various participants. It results into a situation wherein manufacturers and retailers share their plans, with detailed knowledge of each others’ assumptions and constraints.
The steps involed in installing a CPFR systems are:
1. Develop Front End Agreement
2. Create Joint Business Plan
3. Create Sales Forecast
4. Identify Exceptions for Sales Forecast
5. Resolve/Collaborate on Exception Items
6. Create Order Forecast
7. Identify Exceptions for Order Forecast
8. Resolve collaborate on Exception Items
9. Order Generation
10. Delivery Execution
2. Create Joint Business Plan
3. Create Sales Forecast
4. Identify Exceptions for Sales Forecast
5. Resolve/Collaborate on Exception Items
6. Create Order Forecast
7. Identify Exceptions for Order Forecast
8. Resolve collaborate on Exception Items
9. Order Generation
10. Delivery Execution
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CPFR Case Studies from VICS
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Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutorial
Instructor:
Cecil Bozarth , PhD
North Carolina State University
Author of "Introduction to Operations and Supply Chain Management," 2nd edition, Pearson, Prentice-Hall
North Carolina State University
Author of "Introduction to Operations and Supply Chain Management," 2nd edition, Pearson, Prentice-Hall
Links to web pages
Introduction
CPFR Process Model
1. Strategy and Planning
2. Demand and Supply Management
3. Execution
4. Analysis -
a. Exception Management
b. Performance Assessment
and Collaboration
Organizational Implications
Summary
References
Source:
CPFR Process Model
1. Strategy and Planning
2. Demand and Supply Management
3. Execution
4. Analysis -
a. Exception Management
b. Performance Assessment
and Collaboration
Organizational Implications
Summary
References
Source:
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White Papers
1. From JD Edwards, 2003, http://www.sccori.com/SCM/COLLABORATIVEPLANNINGFORECASTING.pdf
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CPFR is a business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand.
CPFR has its origins in Efficient Consumer Response (ECR).
ECR attempted to better coordinate marketing, production, and replenishment activities in a way that simultaneously increased value to the consumer while improving supply chain performance for producers and retailers.
In early 1990s, P&G and Wal-Mart developed a joint logistics process
This partnership laid the foundation for ECR.
Core elements of ECR
Efficient assortment – Product offerings should be rationalized to better meet customer needs and improve supply chain performance (ex. – Why 100 different SKUs that confuse consumers when 30 SKUs would meet their needs?)
Efficient product introductions – New products should be introduced in response to real customer needs, and only after the impact on supply chain performance has been considered.
Efficient promotions – Prices should be kept as stable as possible. The supply chain impact of promotions and market specials should be carefully considered.
*Efficient replenishment *– All physical and information flows that link producers to the consumer should be streamlined to cut costs and increase value.
CPFR extends ECR by modifying the business processes to include:
Information systems for capturing and transferring POS, inventory, and other demand & supply information between trading partners were created and installed.
Formalized sales forecasting and order forecasting processes wherein both producer and customer participate.
Formalized exception handling processes.
Feedback systems to monitor and improve supply chain performance.
https://scm.ncsu.edu/scm-articles/article/introduction-collaborative-planning-forecasting-and-replenishment-cpfr-a-tu
CPFR has its origins in Efficient Consumer Response (ECR).
ECR attempted to better coordinate marketing, production, and replenishment activities in a way that simultaneously increased value to the consumer while improving supply chain performance for producers and retailers.
In early 1990s, P&G and Wal-Mart developed a joint logistics process
This partnership laid the foundation for ECR.
Core elements of ECR
Efficient assortment – Product offerings should be rationalized to better meet customer needs and improve supply chain performance (ex. – Why 100 different SKUs that confuse consumers when 30 SKUs would meet their needs?)
Efficient product introductions – New products should be introduced in response to real customer needs, and only after the impact on supply chain performance has been considered.
Efficient promotions – Prices should be kept as stable as possible. The supply chain impact of promotions and market specials should be carefully considered.
*Efficient replenishment *– All physical and information flows that link producers to the consumer should be streamlined to cut costs and increase value.
CPFR extends ECR by modifying the business processes to include:
Information systems for capturing and transferring POS, inventory, and other demand & supply information between trading partners were created and installed.
Formalized sales forecasting and order forecasting processes wherein both producer and customer participate.
Formalized exception handling processes.
Feedback systems to monitor and improve supply chain performance.
https://scm.ncsu.edu/scm-articles/article/introduction-collaborative-planning-forecasting-and-replenishment-cpfr-a-tu
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