Cpfr

In: Business and Management

Submitted By dsvisper
Words 1113
Pages 5
Introduction:

Distinguishing supply chain efficiency is through longer lead times with high set up costs, and large lot sizes that allow firm to produce or buy low unit cost at the expense of market receptiveness. Where a responsive supply chain, allow short lead-times with low set-up costs and small lot sizes to adapt quickly to changing market demands but frequently at a higher unit cost. Some firms organize collaboration with their contractors and suppliers to improve their supply chain structure to gain competitive advantage in their industry by increasing profits, and balance their supply and demand.

Forecasting with Suppliers:

Lawrence et al. (2009: p. 98 - 99) stated that lack of information sharing triggers firms to optimize own supply chain operations and performance to effectively match supply with demand by collaborating with their suppliers especially for the case of short life-cycle products. Lawrence et al. (2009, p. 99) supports the view of Aviv & Zhao (2002) that through collaborative forecasting, supply chain will improve and most likely achieve the benefits of increasing responsiveness, risk reduction, and lower inventory costs, hence, increase profitability and business performance.

Småros (2004) classified two categories of forecasting collaboration; modeling based research, wherein, retailers and suppliers share downstream demand or inventory information, and the other category is empirical research focusing on one collaboration model such as CPFR (Collaborative Planning, Forecasting, and Replenishment) process supported by VICS (Voluntary Interindustry Commerce Standards). The CPFR model is composing of nine steps model (VICS, 2002):

1. Developing Collaboration Arrangement. 2. Creating Joint Business Plan. 3. Creating Sales Forecast. 4. Identifying Exceptions for Sales Forecast. 5.…...

Similar Documents

Supply Chain Strategy

...supply_chain_strategy All questions are compulsory CASE I LAUNCHING CPFR AT TEXAN FOODS: IMPROVING INVENTORY REPLENISHMENT WITH COLLABORATIVE ACTIVITIES AND TECHNOLOGIES Introduction Angela Preston sank back into the cushy leather chair in the Captain’s Club at LAX, and rubbed her eyes. She and her supervisor, Gordon Ross, had flown halfway across the country to Fresno to meet with representatives from a key supplier, Valley Bakers, to review the outcomes of their 180-day CPFR pilot program. When her drink arrived she hardly touched it,except to stir it nervously, until Gordon returned from the ticket counter. When she had agreedto accept the promotion to Category Director last year, she had no idea that the pressures ofthis job would be so enduring. The last six months had seemed like one long, dull headache. Since the initiation of the CPFR pilot program, it seemed that Valley, their supplier, had been making all the demands in this relationship. Wasn’t the customer supposed to be the one who was always right? Gordon eased into the chair next to her and immediately noticed the weary, pained look on her face. As Vice President of Supply Chain Operations for Texan Foods for the last 9 years, he had learned a lot about dealing with employee and customer frustrations. The CPFR pilot with Valley had tested his resolve as well. Valley’s CPFR team was unhappy with the small performance gains – and the occasional significant losses – that the......

Words: 12339 - Pages: 50

An Integrative Framework for Supply Chain Collaboration

...chain management, Performance measurement (quality), Knowledge sharing, Partnership, Strategic alliances Paper type Research paper Introduction The information age and globalization are forcing companies to place a premium upon collaboration as a new source of competitive advantage (Dyer and Singh, 1998). Closely working together enables the participating members to create and capture mutual benefits for all members from matching demand with supply (Fisher, 1997). Mutual advantages often translate to a very positive return on investment and more efficient inventory management (Walker et al., 2000). Wal-Mart, for instance, collaborated with Warner-Lambert to attain mutual benefits of collaborative planning, forecasting, and replenishment (CPFR) (Parks, 2001). Mutual benefits included an improvement in stock levels on Listerine from 87 to 98 percent, lead times were shortened from 21 to 11 days, on-hand inventory was cut by two weeks, orders were more consistent, and sales increased by 8.5 million dollars. In a similar vein, General Electric (GE) collaborated with its retailers to respond to customer demand instead of inventory (Treacy and Wiersema, 1993). By focusing on a build-to-order system, both parties eliminated the cost of holding inventory and assembling full truckload orders. GE was able to save about 12 percent of distribution and marketing costs and obtained half of the retailers’ The International Journal of Logistics Management Vol. 16 No. 2, 2005 pp. 257-274 q......

Words: 8437 - Pages: 34

Supply Chain Management

...There are various software systems created by companies such as Avercast, Demand Solutions, SAS System, Agentrics, Manugistics, Oracle, Petrolsoft Corporation (now Aspen Technology), StatSoft and ToolsGroup that help businesses forecast demand and plan operations. To test the added value of implementing bottom-up approach, SAP APO applications are providing simulations functionalities to estimate the resulting Demand Forecast Accuracy (e.g. POS sales ; Sales invoices ; shipments, etc.) In the manufacturer to retailer model, customer collaborative partnerships have been become more common since the 1990s. Although there was a lot of industry support behind CPFR, manufacturers and retailers are adopting different versions of collaborative forecasting and replenishment strategies. These include Collaborative-VMI, CPFR, Account Based Forecasting, CMI, Shared Single Forecast and replenishment etc. Demand Planning in the 21st Century is a more complete view of the business. Demand Management is not merely forecasting. Demand management strives to manage all the activities associated with discovering markets, planning products or services for those markets and then fulfilling the customers ‘demand’. It is an integrative set of processes across, not just the enterprise, but the trade partner network. Do you really understand your market? Are you sure you know who your customer is and what draws them to your business? And when they get there are they actually happy with......

Words: 2392 - Pages: 10

Henckel Ibrerica

...Henkel1. What are the specific problems forcing Henkel to consider CPFR?Henkel needs to meet service level at 99.8%. To achieve at that level, Henkel have to have accurate sales forecasting system. Continuous replenishment program (CPR) cannot provide a long forecasting horizon. Thus, adopting of Collaborative Planning, Forecasting, and Replenishment (CPFR) would help manage retail promotions and limit their impact on the stock-outs and obsolete inventory.2. What are some of the symptoms? What are the root causes of those symptoms?1) The stock keeping units (SKU) have almost tripled in five years because of new product launches, brand variations, and special product packaging.2) The sales are up but net earnings are down because of a difficult economic environment.    3) The skyrocketing of production costs and over- or under- stocks because of lacking of viable long-range forecasts.3. Should Henkel reduce product complexity, perhaps by adopting an everyday low price (EDLP) strategy? Or, should they continue to offer new products and promotions while implementing CPFR or another initiative?They should continue to offer new products and promotion while implementing CPFR or another initiative. Henkel uses special promotions, instead of straight price promotions, such as more product for the same price, specially bundled products, and coupons or free items attached to the package. These promotions are retailer-specific, therefore there is a need for a wide variations of......

Words: 315 - Pages: 2

Bus 365 Wk 8 Quiz 7 Chapter 10 - All Possible Questions

...be achieved, and type of support the IS is to provide d) cost of implementation and maintenance 7. __________ is the ability to thrive in a changing environment, which can be achieved by streamlining processes for quick response. a) Agility b) Scalability c) Reengineering d) Collaborative planning 8. __________ are commercial software packages that integrate business processes, including supply chains, manufacturing, financial, human resources, budgeting, sales, and customer service. a) CPFR systems b) ERP systems c) KM systems d) SCM software 9. __________ help organizations identify, select, organize, disseminate, preserve, and share information and expertise. a) CPFR systems b) ERP systems c) KM systems d) SCM software 10. With __________, suppliers and retailers collaborate in planning and demand forecasting in order to ensure that members of the supply chain will have the right amount of raw materials and finished goods when they need them. a) CPFR systems b) ERP systems c) KM systems d) SCM software 11. Which is not one of the reasons why companies might need to migrate from legacy systems to enterprise systems? a) Legacy systems have high maintenance costs. b) Monolithic legacy architectures are inflexible. c) Legacy systems are hardwired by predefined process flows making integration with Internet-based apps difficult or impossible. d) Enterprise systems require retraining of end users whose productivity will slow initially as......

Words: 2467 - Pages: 10

A Critical Analysis of Supply Chain Collaboration Techniques

...overview 4 Bullwhip Effect 5 Reducing the “Bullwhip Effect” 6 Mitigating Bullwhip Effect by Improving Information Accuracy 7 Collaborative planning, forecasting and replenishment (CPFR) 8 Drawbacks of CPFR 9 Vendor Managed Inventory (VMI) 9 Drawbacks of VMI 10 Mitigating Bullwhip Effect by Improving Operational Performance 10 Vendor consolidation 11 Risk in using 3PL for vendor consolidation 13 Reducing Replenishment Lead time using Cross docking 14 Supplier selection for cross-docking 15 Benefits of Cross-docking 16 Disadvantages of Cross-docking 17 Conclusion 18 Appendix 19 Appendix A 19 Products suitable for cross-docking 19 Types of cross-docking 19 References 21 Introduction A Supply chain consists of all the participants and processes which are involved in satisfying the customer demand. The large amount of participants, variety of processes, dynamics and uncertainty in materials and information flow prove that the supply chain as a complex system in which coordination is considered as a key element for success. The lack of supply chain coordination between the participants results in a “Bullwhip Effect”. This report analyzes different techniques followed by Wal-Mart to improve coordination for reducing the bullwhip effect. Wal-Mart’s use of CPFR, VMI to mitigate the bullwhip effect by improving information accuracy is explained and the drawbacks of those systems are discussed. Wal-Mart’s revolutionary use of cross-docking and......

Words: 4579 - Pages: 19

Doctor

...the SC: Internal and External (Inter-organisational, between all the members of the SC). Internal SC = many IT tools to help sharing information into the SC as (ERP: Enterprise Resource Planning, Business Intelligence (BI), Advance Planning and Scheduling (APS) So the supply chain + operations sales and marketing are sharing the information forecasting and working together with a shared view of the final customer’s needs is becoming a key competency. External or Inter-organisational SC: Companies used to work together in a antagonistic or aggressive way should work the same way in order to improve their SC efficiency. The CPFR (Collaborative Planning Forecasting and Replenishment system) is an example of how companies have integrated this dimension of sharing information today. They created a sort of common “go to market” strategy all together. CPFR allows to reduce inventories, improve service levels and increase sales. This article has been based on 2 different case studies in order to present the new approach to inter-enterprise collaboration through the concept of collaborative competencies. 3 main parts: * 1st part: Brief review of the literature on the concept of collaboration among SC partners * 2nd part: 2 case studies presenting the implementation of collaborative process, Case A (external collaboration) + Case B (internal collaboration effects). * 3rd part: Conclusions + New approach of collaboration on collaborative competencies. 1st......

Words: 1330 - Pages: 6

Absract Exercise

...for operations management researcher to expand this theory. Kim Larsen - Yonsei GSIS ! Research Design and Methods - September 2013 Author: Gene Fliedner Title: CPFR: an emerging supply chain tool Journal: Industrial Management & Data Systems, 103/1, 2003, pp. 14-21 The article seeks to examine the supply chain tool, CPFR (Collaborative, Planning, Forecasting and Replenishment). As such the research question is about, how this tool can take advantage of the growing computer-integration in company information systems. The author lists benefits and obstacles for implementation, but does not conclude whether or not CPFR is a tool of the future or not. It merely explains the tool. The article can be charaterised as explorative, but due to its usage of terms from existing theory, such as demand forecasting, production and purchase planning and inventory replnishment, it can be assumed that the article uses a lot of reviously mentioned theory and phenomenon. As previously mentioned, the article seeks to explain and describe a new tool in supply chain management, however it limits itself to the supply chain management of a company, and only planning, forecasting and replenishment, which can be described as individual entities within a company. The main argument of the article is that the CPFR offers an alternative to companies seeking to improve its supply chain by being proactive and open. The research paper is published in 200 Asian Social Science;......

Words: 2310 - Pages: 10

Barilla Case Study

...program called Collaborative Planning, Forecasting and Replenishment (CPFR). Under the CPFR Henkel and Eroski collaborated with each company’s sales forecasters to combine their knowledge of the market. By closely collaborating with their own sales and marketing team as well as the distributor Barilla can make use of their data to help implement the program and get more visibility into the retailer’s needs. There are winners and losers as a result of this program. Barilla will be able to decrease inventory costs and distributors will not have to carry as much inventory and both will be able to improve their forecasting and planning strategy. Ultimately this will mean that the retailers and customers get the product needed. Unfortunately, the distributors may get phased out if the retailers decide to get their product directly from Barilla. If Barilla wanted to take this further and possibly provide more incentive for the distributor and the retailer they could look into other types of supply contracts. Sales rebate contracts are a way to increase sales by paying the supplier for items sold above a certain quantity. These rebates can also be provided to the customer through their purchase of the item If all parties are willing to work together to put this system into place I believe that this program will be a success and Barilla will once again operate efficiently. Jouenne, Theirry. “Henkel-Eroski CPFR® Pilot Case Study” Jouwen Editions, 2000. Journal. Peck,......

Words: 767 - Pages: 4

Bus 365 Wk 8 Quiz 7 Chapter 10

...be achieved, and type of support the IS is to provide d) cost of implementation and maintenance 7. __________ is the ability to thrive in a changing environment, which can be achieved by streamlining processes for quick response. a) Agility b) Scalability c) Reengineering d) Collaborative planning 8. __________ are commercial software packages that integrate business processes, including supply chains, manufacturing, financial, human resources, budgeting, sales, and customer service. a) CPFR systems b) ERP systems c) KM systems d) SCM software 9. __________ help organizations identify, select, organize, disseminate, preserve, and share information and expertise. a) CPFR systems b) ERP systems c) KM systems d) SCM software 10. With __________, suppliers and retailers collaborate in planning and demand forecasting in order to ensure that members of the supply chain will have the right amount of raw materials and finished goods when they need them. a) CPFR systems b) ERP systems c) KM systems d) SCM software 11. Which is not one of the reasons why companies might need to migrate from legacy systems to enterprise systems? a) Legacy systems have high maintenance costs. b) Monolithic legacy architectures are inflexible. c) Legacy systems are hardwired by predefined process flows making integration with Internet-based apps difficult or impossible. d) Enterprise systems require retraining of end users whose productivity will slow initially as......

Words: 2495 - Pages: 10

Collaborative Planning

...OPERATIONS CONSULTING -- SPRING 2011 Collaborative Planning, Forecasting, and Replenishment Research Paper Tuomas Toiviainen & Jeffrey Hansen 2/2/2011 CONTENTS What is CPFR? ............................................................................................................................................... 3 What are the typical tasks performed under CPFR?..................................................................................... 4 What are the benefits of CPFR for retailers? ................................................................................................ 5 What are the benefits of CPFR for manufacturers? ..................................................................................... 6 What are the challenges for CPFR?............................................................................................................... 7 What are the next steps for CPFR? ............................................................................................................... 7 Page 2 of 8 WHAT IS CPFR? Collaborative Planning, Forecasting and Replenishment (CPFR) is a tool used to enhance the supply chain that should optimally yield in lower inventories, logistic costs and create efficiency in the whole supply chain to all participants. CPFR uses cooperative management in sharing key information about the supply chain between suppliers and retailers (sellers and buyers) who work together to satisfy the......

Words: 1587 - Pages: 7

Bus 365 Week 8 Quiz 7 Chapter 10

...goals to be achieved, and type of support the IS is to provide d) cost of implementation and maintenance 7. __________ is the ability to thrive in a changing environment, which can be achieved by streamlining processes for quick response. a) Agility b) Scalability c) Reengineering d) Collaborative planning 8. __________ are commercial software packages that integrate business processes, including supply chains, manufacturing, financial, human resources, budgeting, sales, and customer service. a) CPFR systems b) ERP systems c) KM systems d) SCM software 9. __________ help organizations identify, select, organize, disseminate, preserve, and share information and expertise. a) CPFR systems b) ERP systems c) KM systems d) SCM software 10. With __________, suppliers and retailers collaborate in planning and demand forecasting in order to ensure that members of the supply chain will have the right amount of raw materials and finished goods when they need them. a) CPFR systems b) ERP systems c) KM systems d) SCM software 11. Which is not one of the reasons why companies might need to migrate from legacy systems to enterprise systems? a) Legacy systems have high maintenance costs. b) Monolithic legacy architectures are inflexible. c) Legacy systems are hardwired by predefined process flows making integration with Internet-based apps difficult or impossible. d) Enterprise systems require retraining of end users whose productivity will slow initially as they......

Words: 2459 - Pages: 10

Material Management Proposal

...alternatives such as sales and operations planning (S&OP) and collaborative planning, forecasting, and replenishment (CPFR). The mission of S&OP is to balance demand with supply to make profit-maximizing decisions in all parts of the business (Langabeer, 2008). To make certain the S&OP process is successful; the hospital operations management must focus on four key principles: • Provide a common base of information around the immediate market dynamics • Manage supply chain performance • Manage product portfolios collaboratively • Create business plans and scenarios in which departments can share. Hospital operations and material managers will need to have a clear understanding of how the S&OP process helps force alignment with the upstream supply chain. According to Langabeer (2008) “the S&OP process include better cross-functional alignment, gap analysis, more efficient resource planning, and more effective use of promotional resources” (p. 338). Collaborative planning forecasting and replenishment (CPFR) is another alternative for hospitals.” CPFR seeks to develop the relationship involving retailers and suppliers with the intent to accomplish full collaboration and improve the sharing of information around the consumer point-of-sales data through the retail supply chain to improve the entire chain performance (Langabeer, 2008, p. 338). The difference between CPFR and S&OP, and automation is the concept of reducing costs and improve the supply chains. Operational......

Words: 1614 - Pages: 7

Chapter 8 E-Supply Chain, Collaborative Commerce, and Intrabusiness Ec

...Chapter 8 E-Supply Chain, Collaborative Commerce, and Intrabusiness EC Learning Objectives Upon completion of this chapter, you will be able to: 1. Define e-supply chain and describe its characteristics and components. 2. List supply chain problems and their causes. 3. List solutions to supply chain problems provided by EC. 4. Define c-commerce and list its major types. 5. Describe collaborative planning and Collaboration, Planning, Forecasting and Replenishing (CPFR), and list their benefits. 6. Define intrabusiness EC and describe its major activities. 7. Discuss integration along the supply chain. 8. Understand corporate portals and their types and roles. 9. Describe e-collaboration tools such as workflow and groupware. Content How General Motors Is Collaborating Online 1. E-Supply Chains 2. Supply Chain Problems and Solutions 3. Collaborative Commerce 4. Collaborative Planning, CPFR, and Collaborative Design 5. Internal Supply Chain Solutions, Intrabusiness, and B2E 6. Integration Along the Supply Chain 7. Corporate (Enterprise) Portals 8. Collaboration-Enabling Tools: From Workflow to Groupware Managerial Issues Real-World Case: Portal Speeds Product R&D at Amway Appendix 8a: Intranets Answers to Pause/Break Section Review Questions Section 8.1 Review Questions 1. Define the e-supply chain and list its three major parts. A supply chain that is managed electronically, usually using Web......

Words: 3293 - Pages: 14

Supplychain Strategy

...CASE I supply_chain_strategy LAUNCHING CPFR AT TEXAN FOODS: IMPROVING INVENTORY REPLENISHMENT WITH COLLABORATIVE ACTIVITIES AND TECHNOLOGIES Introduction Angela Preston sank back into the cushy leather chair in the Captain’s Club at LAX, and rubbed her eyes. She and her supervisor, Gordon Ross, had flown halfway across the country to Fresno to meet with representatives from a key supplier, Valley Bakers, to review the outcomes of their 180-day CPFR pilot program. When her drink arrived she hardly touched it,except to stir it nervously, until Gordon returned from the ticket counter. When she had agreedto accept the promotion to Category Director last year, she had no idea that the pressures ofthis job would be so enduring. The last six months had seemed like one long, dull headache. Since the initiation of the CPFR pilot program, it seemed that Valley, their supplier, had been making all the demands in this relationship. Wasn’t the customer supposed to be the one who was always right? Gordon eased into the chair next to her and immediately noticed the weary, pained look on her face. As Vice President of Supply Chain Operations for Texan Foods for the last 9 years, he had learned a lot about dealing with employee and customer frustrations. The CPFR pilot with Valley had tested his resolve as well. Valley’s CPFR team was unhappy with the small performance gains – and the occasional significant losses – that the program had delivered for the 34 SKUs......

Words: 12334 - Pages: 50