Collaborative Planning

Forecasting & Replenishment

(CPFR)

By,
Allen Kannattu
Nidhi Desai
Raghav Samdani
Vishak R Sharma

CPFR - An Introduction
Definition
Collaborative Planning, Forecasting and Replenishment (CPFR) is a
business model in which retailers and manufacturers extend collaboration
from operational planning through to execution using Internet-enabled
technology.

It seeks cooperative management of inventory through joint visibility

and replenishment of products throughout the supply chain

It is achieved by mutual sharing of POS, inventory, promotions,

strategy and production information between retailers and suppliers

Evolution of CPFR
CPFR evolved from Efficient Consumer Response (ECR)
Co-ordination of marketing, production and replenishment

In 1987, P&G and Wal-Mart pioneered in Continuous

Replenishment Process (CRP) which is often called as

Vendor Managed Inventory (VMI) which included
Information Sharing
Joint Demand Forecasting
Co-ordinated Shipments

In 1996, CPFR pilot between Wal-Mart and Warner

Lambert.

CPFR Benefits: Demand & Supply

Demand

Enhanced Relationship

Greater Sales

Category Management

Improved Product Offering

Supply

Improved Order Forecast Accuracy

Inventory Reductions

Improved Technology ROI

Improved Overall ROI

Increased Customer Satisfaction

CPFR Model
Exception
Management
Active monitoring of
planning
Performance
Assessment

Order Generation
Order Fulfilment

Defining the scope

of collaboration
Assigning roles,
responsibilities,
checkpoints and
escalation
procedures.

Sales Forecasting
Order
Planning/Forecastin

CPFR Enablers
Electronic Data Interchange
Data Synchronization
Data Registration
Common Data Standards

Example: Wal-Mart
Wal-Mart worked together with its key
suppliers on a real-time basis by using the
internet to jointly determine product-wise
demand forecast

Thank You!