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Collaborative Planning, Forecasting and Replenishment (CPFR) describes a set of practices in which trading partners plan key supply chain activities to efficiently meet customer demand at the lowest possible cost. This collaboration typically includes business planning, sales forecasting, and replenishment of raw materials and finished goods. Meant to reduced silos, CPFR streamlines multiple S&OP processes and supply chain planning activities, reduces inventory and logistics costs, enhances end-to-end supply chain efficiency and optimizes inventory movement. CPFR establishes common processes and metrics to help supply chain trading partners achieve their common goals. Improved communication, collaboration and information sharing are vital to ensuring the successful implementation of this strategy. Learn more about the supply chain software and supply chain services offered by GEP
By the end of this module, you will be able to:
What is CPFR?Collaborative Planning, Forecasting and Replenishment (CPFR):CPFR is a business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand.
h2. Origins in ECR CPFR has its origins in Efficient Consumer Response (ECR). ECR was a conscious attempt 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. Typical manufacturer-retailer relationship prior to ECRSituationArms-lengths relationships; little or no joint planning Relationships were often adversarial. The lack of information sharing made these relationships more costly than they needed to be (“unpredictable” ordering patterns, excessive inventories, service failures,…). SolutionIn early 1990s, P&G and Wal-Mart developed a joint logistics process The steps involved were:
This partnership laid the foundation for ECR. Core elements of ECREfficient 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. How CPFR differs from ECRECR’s core elements still apply under CPFR.
Another way to think about ECR and CFPR
Collaborative Planning, Forecasting and Replenishment (CPFR) is an approach which aims to enhance supply chain integration by supporting and assisting joint practices. CPFR seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain. Information shared between suppliers and retailers aids in planning and satisfying customer demands through a supportive system of shared information. This allows for continuous updating of inventory and upcoming requirements, making the end-to-end supply chain process more efficient. Efficiency is created through the decrease expenditures for merchandising, inventory, logistics, and transportation across all trading partners.[1] CPFR is a trademark of GS1 US.[2] OriginsCPFR began as a 1995 initiative co-led by Wal-Mart's Vice President of Supply Chain, Chief Information Officer, Vice President of Application Development, and the Cambridge, Massachusetts software and strategy firm, Benchmarking Partners. The Open Source initiative was originally called CFAR (pronounced See-Far, for Collaborative Forecasting and Replenishment). According to an October 21, 1996 Business Week article entitled Clearing the Cobwebs from the Stockroom, New Internet software may make forecasting a snap, "Benchmarking developed CFAR with funding from Wal-Mart, IBM, SAP, and Manugistics. The latter two are makers of accounting and supply chain management software, respectively. To promote CFAR as a standard, Benchmarking has posted specifications on the Web and briefed more than 250 companies, including Sears, J.C. Penney, and Gillette. About 20 companies are implementing CFAR."[3] Warner Lambert (now part of Pfizer) served as the first pilot for CFAR. The pilot's results were publicly announced at a CFAR industry session at Harvard University, July 30, 1996 of executives from Wal-Mart's suppliers as well as other retailers and the Uniform Code Council. Benchmarking Partners then presented CFAR to the Board of Directors of the Voluntary Interindustry Commerce Standards Committee (VICS). VICS established an industry committee to prepare for rolling CFAR out as an international standard. The original committee was co-chaired by the Vice President of Customer Marketing from Nabisco and the Vice President of Supply chain from Wal-Mart. Based on the suggestion of Procter & Gamble's Vice President of Supply Chain, the standard was renamed CPFR to emphasize the role of planning in the collaboration. The first publication of the VICS CPFR Voluntary Guidelines came out in 1998. Currently there are committees "to develop business guidelines and roadmaps for various collaborative scenarios, which include upstream suppliers, suppliers of finished goods and retailers, which integrate demand and supply planning and execution. The committee is continuing to improve the existing guidelines, tools and critical first steps that enable the implementation of CPFR."[4][5] These committees gained experience from pilot studies which have occurred over the past six years. VICS continues to lead much of the research and implementation of CPFR through its guidelines and project investigations. CPFR modelCPFR was originally presented by VICS in their VICS CPFR Guidelines in 1998 as a nine-step (or data flow) process,[6] starting with the collaborating businesses developing the agreement for collaboration. The nine steps were:[7]
The CPFR model presents the aspects in which industries focus. The model provides a basic framework for the flow of information, goods, and services. In the retail industry the “retailer typically fills the buyer role, a manufacturer fills the seller role, and the consumer is the end customer.”[1][4] The center of the model is represented as the consumer, followed by the middle ring of the retailer, and finally the outside ring being the manufacturer. Each ring of the model represents different functions within the CPFR model. The consumer drives demand for goods and services while the retailer is the provider of goods and services. The manufacturer supplies the retailer stores with product as demand for product is pulled through the supply chain by the end user, being the consumer. See also
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Page 2You do not have permission to edit this page, for the following reasons: You can view and copy the source of this page: == Origins== CPFR began as a 1995 initiative co-led by Wal-Mart's Vice President of Supply Chain, Chief Information Officer, Vice President of Application Development, and the Cambridge, Massachusetts software and strategy firm, Benchmarking Partners. The Open Source initiative was originally called CFAR (pronounced See-Far, for Collaborative Forecasting and Replenishment). According to an October 21, 1996 Business Week article entitled ''Clearing the Cobwebs from the Stockroom, New Internet software may make forecasting a snap'', "Benchmarking developed CFAR with funding from [[Wal-Mart]], [[IBM]], [[SAP AG|SAP]], and Manugistics. The latter two are makers of accounting and [[supply chain management software]], respectively. To promote CFAR as a standard, Benchmarking has posted specifications on the Web and briefed more than 250 companies, including [[Sears, Roebuck and Company|Sears]], [[J.C. Penney]], and [[The Gillette Company|Gillette]]. About 20 companies are implementing CFAR."<ref>{{cite web|url=http://www.businessweek.com/1996/43/b3498166.htm|date=21 October 1996|title=CLEARING THE COBWEBS FROM THE STOCKROOM|archive-url=https://web.archive.org/web/20121018090953/http://www.businessweek.com/1996/43/b3498166.htm|archive-date=18 October 2012|author=John W. Verity|publisher=Business Week}}</ref> [[Warner Lambert]] (now part of [[Pfizer]]) served as the first pilot for CFAR. The pilot's results were publicly announced at a CFAR industry session at [[Harvard University]], July 30, 1996 of executives from Wal-Mart's suppliers as well as other retailers and the [[Uniform Code Council]]. Benchmarking Partners then presented CFAR to the Board of Directors of the Voluntary Interindustry Commerce Standards Committee (VICS). VICS established an industry committee to prepare for rolling CFAR out as an international standard. The original committee was co-chaired by the Vice President of Customer Marketing from Nabisco and the Vice President of Supply chain from Wal-Mart. Based on the suggestion of Procter & Gamble's Vice President of Supply Chain, the standard was renamed CPFR to emphasize the role of planning in the collaboration. The first publication of the VICS CPFR Voluntary Guidelines came out in 1998. Currently there are committees "to develop business guidelines and roadmaps for various collaborative scenarios, which include upstream suppliers, suppliers of finished goods and retailers, which integrate demand and supply planning and execution. The committee is continuing to improve the existing guidelines, tools and critical first steps that enable the implementation of CPFR."<ref name=CPFR>{{cite web|author=CPFR Committee|archive-date=12 August 2006|title=Collaborative Planning, Forecasting & Replenishment (CPFRŽ) Committee|url= http://www.vics.org/committees/cpfr/|archive-url=https://web.archive.org/web/20060812074739/http://www.vics.org/committees/cpfr/}}</ref><ref>{{cite web|url=https://www.gs1us.org/DesktopModules/Bring2mind/DMX/Download.aspx?Command=Core_Download&EntryId=492&language=en-US&PortalId=0&TabId=134|title=Collaborative Planning, Forecasting and Replenishment (CPFR®): CPFR An Overview|date=18 May 2004|publisher=Voluntary Interindustry Commerce Standards (VICS) Association}}</ref> These committees gained experience from pilot studies which have occurred over the past six years. VICS continues to lead much of the research and implementation of CPFR through its guidelines and project investigations.Return to Collaborative planning, forecasting, and replenishment. |