Collaborative Planning, Forecasting & Replenishment (CPFR) Committee

Presentation by:
Kirti labh Kratika singh Vanshaj Kumar

INTRODUCTION
Collaborative Planning, Forecasting and Replenishment(CPFR)isaconceptthat aimstoenhancesupplychainintegrationby supportingandassistingjointpractices. CPFRseekscooperativemanagementof inventorythroughjointvisibilityand replenishmentofproductsthroughoutthe supplychain.

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 to simultaneously increased value to the consumer while improving supply chain performance for producers and retailers.

Collaborative Planning Forecasting and Replenishment (CPFR)

Data and process model standards developed for collaboration between suppliers and an enterprise with prescribed methods for planning (agreement between the trading partners to conduct business in a certain way); forecasting (agreed-to methods, technology and timing for sales, promotions, and order forecasting); replenishment (order generation and order fulfilment). The Voluntary Inter-Industry Commerce Standards (VICS) committee, a group dedicated to the adoption of bar-coding and EDI in the department store/mass merchandise industries, has established CPFR standards for the consumer goods industry that are published by the Uniform Code Council (UCC).

Mission
ThemissionoftheCPFRCommitteeistodevelopbusiness guidelinesandroadmapsforvariouscollaborative scenarios,whichincludeupstreamsuppliers,suppliersof finishedgoodsandretailers,whichintegratedemandand supplyplanningandexecution. Thecommitteeiscontinuingtoimprovetheexisting guidelines,toolsandcriticalfirststepsthatenablethe implementationofCPFR.Itisalsodevelopingguidelines forApparelandtheintegrationofcategorymanagement withCPFR.

Who should participate?

SeniorManagersacrossfunctions, includingMerchandisingandSales, PlanningandOperations, TransportationandLogistics, InformationTechnologyandFinance.

Current Key Initiatives

1.Supportnewverticals 2.IncreaseParticipation/Qualityof Meetings 3.NewMetricsGuideline 4.UpdatedCPFRCapability Assessment

Focus of the VICS CPFR Committee

Implementation, Implementation, Implementation! Providingtheessentialknowledge,supportand experience. subcommitteesfocussedontools,metrics,collaborative processrefinementandeducation. Collaborationisakeycomponentinoptimizingthesupply chain. incorporatingcustomerspecificdemandintotheinternal SalesandOperationsPlanning(S&OP)process. CPFR,isatimetestedmethodtosqueezeinefficiency, timeandwasteoutofthesupplychain.

 CPFR: An Overview of the Model

VICS CPFR Model Top level diagram

 In the retail industry, a retailer typically fills the buyer role, a manufacturer fills the seller role, and the consumer is the end customer. In other industry segments, such as high technology, the Collaboration Participants may differ.

CPFR Activities
Strategy & Planning Establish the ground rules for the collaborative relationship. Demand & Supply Management Project consumer (point-of-sale) demand,. Execution Place orders, prepare and deliver shipments, receive and stock products on retail shelves, record sales transactions and make payments. Analysis Monitor planning and execution activities for exception conditions. Aggregate results, and calculate key performance metrics.

CPFR Technology
The CPFR process does not fundamentally depend upon technology. However, specialized technology can make the process more scalable. Sharing forecasts and historical data Automating the collaboration arrangement and joint business plan Evaluating exception conditions Enabling revisions and commentary

Retailer and Manufacturer Enterprise Tasks that Support Collaboration

CONVENTIONAL ORGANIZATIONAL ROLES

The Role of CPFR Technology in Integrating Retailer and Manufacturer Processes

 Collaborative Planning, Forecasting and Replenishment (CPFR) is a business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand.

Collaborative Planning, Forecasting and Replenishment (CPFR): CPFR is a business practice that combines the intelligence of multiple trading partners in the planning and fulfilment of customer demand. Links sales and marketing best practices to supply chain planning and execution processes Objective is to increase availability to the customer while reducing inventory, transportation and logistics costs

 CPFR is a strategy for improving supply chain efficiency and effectiveness by making demand transparency drive the execution of the supply chain participants to maximize value for the end-customer. The aim of CPFR is to convert the supply chain from a disjointed, ineffective and inefficient push system to a coordinated pull system.

Collaborative Assortment Planning for Apparel & Footwear

The assortment planning process for apparel and footwear retailers and vendors is the activity of determining product placement by location and by delivery. Retailers and vendors must work together to build and modify assortment plans based upon financial plans, historical sell-thru data, market trends, and production schedules. Both retailers and vendors financial and assortment planning processes affect inventory management.

Store Replenishment Collaboration

Store Replenishment Collaboration aims to link manufacturers and retailers to plan store sales and promotion volumes, calculate store inventory requirements, and respond to ongoing operational issues. The objective is to increase sales and reduce out-of-stocks at the most important point of the supply chain: where the consumer purchases the product.

Distribution Center Replenishment Collaboration

Distribution Center (DC) Replenishment Collaboration has been the most common starting point for trading partners to improve the replenishment and forecasting processes between their organizations. In this system, trading partners collaborate to improve the accuracy of DC-to-Store and Supplier-to-Retail DC forecasts.

Retail Event Collaboration

The problem of out-of-stocks remains a thorn in the side of the industry. During promotional events, the situation is even worse as the out-of-stock rate doubles while consumer demand peaks. Not only are retailers and manufacturers losing sales and profits, but they are also gambling with the loyalty of their customers because promise of a special deal has not been fulfilled.

Standards & Schemas

On March 21, 2002 the VICS CPFR Business Message Standards and CPFR XML Schemas were approved by the EAN-UCC Global Management Standards Process (GSMP) and published by EAN-UCC as Global Standards.

REFERENCES
http://scm.ncsu.edu/public/cpfr/ http://www.vics.org/committees/cpfr/