cpfr reference model

2. CPFR
Collaborative, Planning,
Forecasting, and Replenishment

3. •A business practice
•Trading partners working together in planning
fulfilling 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.

4. Three modes of CPFR
Basic CPFR: a limited number of business processes
integrated between a limited number of supply chain partners
Developed CPFR: will typically involve a greater number
of data exchanges between two partners, and may extend to
suppliers taking responsibility for replenishment on behalf of
their customer.
Advanced CPFR: goes beyond data exchanges to
synchronise forecasting information systems and coordinate
planning and replenishment processes

5. SARA LEE
Federated Dept. Stores
MeadSchool & Office
Kimberly Clark
JCPenney
VF Corp.
Staples

6. •Selection of CPFR partners.
•Senior Management Buy In.
•Confidentiality.
•Cultural Change.

7. 8 collaboration tasks form
cycle of 4 activities:
A. Strategy & Planning
B. Demand & Supply
Management
C. Execution
D. Analysis.
Each activity consists of two
collaboration tasks.

8. •Establish the ground rules for the collaborative
relationship.
•Determine product mix and placement, and
develop event plans for the period.

9.  Sales forecasting:
 Projects demand at the point of sale
 Order planning/forecasting:
(a)Determines future product order & delivery
requirements based upon the sales forecast.
(b)Takes into account inventory positions, transit
lead times, shipment quantities, and other factors.

10. Place orders, prepare and deliver shipments, receive
and stock product on retail shelves, record sales
transactions and make payments.
•Order generation— Transitions order forecasts into
firm demand
•Order fulfillment — Producing, shipping, delivering,
and stocking the products

11.  Monitor planning and execution activities for
exception conditions.
 Aggregate results, and calculate key performance
metrics.
 Share insights and adjust plans for continuously
improved results

12. The Voluntary Interindustry Commerce Standards (VICS) developed a 9 step
approach to guideline businesses to develop agreements for collaboration.
VICS 9-Step Approach
•Develop the 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

13. •Improved customer service trough better
forecasting techniques
•Lower Inventories for higher profits
•Improved ROI on Technology investment
•Improved relationships between trading partners
•Cost reduction

14. CPFR is a great concept that has revolutionized
business practices by integrating the organization
with its trade partners more effectively to realize
mutual benefits. Buyers benefit from reduced
prices, better forecasting, collaborative
relationships to get better service levels and
synchronized operations