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CPFR - Collaborative

Planning, Forecasting &


Replenishment
By:
Akash Anand
Amim Fatmi
Pankaj Singh
Satyarth Prakash

Introduction
Tool to enhance supply chain.
Yields in lower inventory, logistic cost & create
efficiency in supply chain.
Uses cooperative management in sharing key
information between suppliers & retailers.

Planning

Analysis

End
Customer

Executing

Forecasting

Phase I - Planning
This phase relates to people, processes, and
development of trust.
Partners break down cultural barriers and companycentric perceptions to view the larger picture.
Includes Developing Front End Agreement and
Crafting A Joint Business Plan.

Phase II - Forecasting
In this phase, collaborative forecast of end user
demand along with all aspects of supply chain.
Purpose is to provide support for both long term and
day to day decisions.
Includes Forecasting Sales, Collaboration To Develop
A Shared Forecast, Forecasting Orders and
Identifying And Resolving Exceptions.

Phase III - Executing


In this phase , order is generated for delivering.
Successful execution of delivery is ensured.
Includes Generating Orders & Execution Of The CPFR
Plan.

Phase IV - Analysis
Exception management and performance assessment
are used to constantly monitor sudden changes in
quality.
Key metrics are used to evaluate the success of
business goals and monitor the trends in industry.

Benefits For Retailers


Leads to better store shelf stock rates to ensure high
customer satisfaction.
Lowers the inventory levels.
Reduces storage costs.
Increase space in at inventory.

Benefits For Manufacturers


Lower inventory levels.
Faster replenishment cycle.
Higher sales.
Better customer service.

Challenges For CPFR


Having a trading partner that focuses on traditional
supply chain steps.
Not having the exception resolving/review process.
Not having adequate information & expertise.
Lack of trust in sharing sensitive information.
Lack of internal forecast collaboration.
Fragmented information sharing standards.

Proposals for CPFR


CPFR plans needs to be adjusted according to
dynamics of supply chain and consumer demand
pattern change.
Practice multiple tiers, so that, all suppliers could
communicate and share information not only with
retailer but with each other at same time.

Zara : An Example
Zara uses sales data to work collaboratively with its
suppliers to plan production and inventory
replenishment.

It uses this data to construct a replenishment forecast


that is shared with the retailer and vendor before it is
executed.

All of its stores are electronically linked to the


Companys headquarters in Spain. Thus, Zaras
designers have real-time information when deciding a
new line of garments.
This combination of real-time information sharing and
internalized production means that Zara can work
with almost no stock and still have new designs in the
store twice a week.

References
Collaborative Planning, Forecasting, and
Replenishment by: Tuomas Toiviainen & Jeffrey
Hansen
CPFR white paper by: J.D. Edwards

Thank You