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Collaborative Planning Replenishment & Forecasting (CPFR)

Collaborative Planning Replenishment & Forecasting (CPFR). Executive Overview. Collaborative Planning provides an environment for integrating “demand” and “supply” side processes in order to achieve reduced inventory levels, shorter supply chain cycle times and reduced supply chain costs.

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Collaborative Planning Replenishment & Forecasting (CPFR)

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  1. Collaborative Planning Replenishment & Forecasting (CPFR) Executive Overview

  2. Collaborative Planning provides an environment for integrating “demand” and “supply” side processes in order to achieve reduced inventory levels, shorter supply chain cycle times and reduced supply chain costs. What is CPFR? It is more than sharing data The mission of Collaborative Planning, Forecasting and Replenishment is to increase partnering between retailers and manufacturers, and manufacturers and their suppliers through co-managed processes and shared information. Corporate Culture

  3. VICS CPFR Initiative • What is Collaborative Planning, Forecasting and Replenishment (CPFR) • Committee is an industry group made up of several retailers and manufacturers • This group aims to develop a set of business processes used in the supply chain area for collaboration • It will improve the partnership between retailers and suppliers through co-managed processes and shared information • Supply chain efficiencies will be achieved through increased in-stock sales and reduced inventory • The CPFR committee created the CPFR Voluntary Guidelines to explain the business processes and supporting technology • Today, more than 30 US companies are part of the CPFR commitee, including: • Wal-Mart, Kmart, Schmuck, Wegmanns, SuperValue, Butt, Target on the retail side as well as manufacturers such as • Procter& Gamble, Sara Lee, Levis, Nabisco, Kimberly Clark, Kodak Heineken. • From the IT side partners include Sun, Hewlett Packard, IBM and SAP. • The concept is also extending to Europe and currently Procter & gamble is running pilots in 4 countries with 4 leading retailers.

  4. Targeting of CPFR Benefits Greatest Opportunity for Value • CPFR / Supply Chain Visibility • Concentration of vendors Low High • Opportunistic / planned buying Opportunistic Planned • Availability of information Low High • Sophistication of current processes Low High • Supply chain visibility Low High • Sophistication of EDI Low High • Current level of vendor collaboration Low High CPFR processes are most appropriate where product and service, not price, are the basis for differentiation. It works best where the focus is on long-term relationships for highly differentiated products with limited sources of supply.

  5. CPFR VMI (Vendor Managed Inventory) CRP (Continuous Replenishment Planning) ECR (Efficient Consumer Response) AFR (Aggregated Forecasting Replenishment) Evolution of B2B Collaboration EDI Networks B2C / B2B e-Commerce XML Integration Benefits Time 2000 1970s 1980s 1990s

  6. Collaborative Planning, Forecasting and Replenishment in eMarkets • Major eMarkets are promoting CPFR as a core part of their solution offering, for example: • WorldWide Retail Exchange (WWRE) • Global NetXchange (GNX) • Transora • Covisint • eHitex • Collaborative processes are key differentiators for many eMarkets • For mature industries (including CPG, Retail, Automotive and High Tech), the benefits can be far greater than procurement-related savings • Benefits are shared among all trading partners--suppliers, manufacturers, retailers and consumers (win-win-win-win) • Savings are recurring--a ”sticky” app

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