Collaborative Planning, Forecasting & Replenishment (CPFR®) Committee
The Purpose of the VICS CPFR Committee is to:
- LeRoy Allen, Vice President, Logistics Planning & Forecasting, Lowe’s
- Jim Flannery, Director, Customer Business Development, Procter & Gamble
- Gary Maxwell, Senior Vice President, International Innovations, Walmart Stores, Inc.
- Larry Smith, Sr. VP, Planning & Replenishment, West Marine
- Provide the Leadership and Innovation to reduce overall Value Chain costs and better serve our consumers
- Be a forum for discussion and debate where retailers, manufacturers and service providers can jointly identify opportunities, barriers or obstacles that could be addressed within the CPFR Framework.
- Launch new, collaborative research projects, staffed by industry experts that address cross industry opportunities or issues promoting common industry wide standards and/or solutions by member companies.
- Identify / create / vet new process models, current and emerging Best Practices and / or needed adaption of the CPFR Framework so that understanding, adoption and deployment of the framework benefits the industry, as well as, enable us to better serve our consumers.
- Own the CPFR Framework, provide stewardship for it and keep it relevant
- Maintain the Brand, its equity, the power of the Framework and its consistency with best collaborative business practices.
- Continually revisit the framework to keep it fresh and relevant as identified by our ideation.
- Create the Common Language and Standards
- Work with GS1 to develop the process, data and technology standards needed to support identified CPFR business requirements.
- Create, prove and publish guidelines to support current and emerging Best Practice processes behind all elements within the CPFR Framework.
- Promote relevance and application of the CPFR framework and trading partner collaborative approaches across industries and domains
- Drive understanding, adoption and Implementation
- Utilize Case Studies as a means to promote, disseminate, share know-how and prove the benefits of CPFR collaborative practices. Use the Committee to demonstrate support of Standards, process models and guidelines.
- Provide a forum for “content expert” networking as an incubator of new approaches to existing and developing industry challenges.
- Support GS1 implementation measurement efforts (GS1 Dashboard), track CPFR related progress.
- Administer and support Publications, Webcasts and “Knowledge Sharing” meetings (with success measured by the number of attendees participating to learn versus those there to present)
CPFR® Business Practices
CPFR: An Overview of the Model
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. Since the 1998 publication of the VICS CPFR guidelines, over 300 companies have implemented the process. Numerous case studies of CPFR projects document in-stock percentage improvements of 2 to 8% for products in stores, accompanied by inventory reductions of 10 to 40% across the supply chain.
By linking sales and marketing best practices such as category management to supply chain planning and execution processes, CPFR increases availability while reducing inventory, transportation and logistics costs. The experience gained from pilot and production implementations of CPFR over the past six years has yielded many insights. A joint committee of VICS and the Efficient Consumer Response (ECR) organization revised the guidelines slightly in 2001 to incorporate global requirements, sanctioned by the Global Commerce Initiative (GCI). In 2004, the VICS CPFR committee developed a major revision of the CPFR model to integrate innovations and overcome shortcomings identified in the original process. “Overview: Collaborative Planning, Forecasting and Replenishment (CPFR)” introduces the updated model.
Successful Large Scale CPFR Programs and Onboarding Trading Partners
Collaborative Planning, Forecasting and Replenishment (CPFR®) initiatives have moved well beyond pilots to programs governing the majority of sales of large enterprises.In this process, some of the distinguishing characteristics of successful collaborative programs are becoming clear. The purpose of this guideline is to document approaches for implementing and sustaining collaborative business processes, particularly in large scale CPFR programs.
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. Fundamentally, the aim of CPFR is to convert the supply chain from a disjointed, ineffective and inefficient “push” system to a coordinated “pull” system based upon end customer demand. Trading partners move to selling through their customer firms (to their end-customers) rather than to their customer firms. The “Implementing Successful Large Scale CPFR Programs and Onboarding Trading Partners – Business Process Guide” will help companies investigating collaborative approaches or those wanting to re-invigorate existing CPFR programs.
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. The coordination and sharing of this information both internally and among trading partners is critical to delivering the right products to the right place at the right time.
Both retailers’ and vendors’ financial and assortment planning processes affect inventory management, yet the business processes and underlying systems are often not integrated or synchronized between parties. This lack of integration and synchronization creates inefficiencies in the supply and demand chains leading to missed sales, inaccurate inventory, excessive markdowns, unnecessary operating costs, and extended response times. The purpose of this document, “Collaborative Assortment Planning for Apparel & Footwear,” is to delineate best practices that effectively address these challenges and improve assortment planning collaboration and execution.
Store Replenishment Collaboration
Working within the framework of Collaborative Planning, Forecasting and Replenishment (CPFR), Store Replenishment Collaboration aims to link manufacturers and retailers to plan store sales and promotion volumes, calculate store inventory requirements, and respond to on-going 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.
The benefits attributed to store-level collaboration include greater visibility to consumer take-away and overstock reduction. Replenishment accuracy, in-stocks and promotional execution all improve as well. Trading partners have a direct view of how consumers are responding to new products, existing shelf distribution, and promotional take-away. The “Store Replenishment - Business Process Guide” will help retailers and manufacturers planning or executing store-level initiatives by implementing consistent vocabulary and industry guidelines.
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. Executed within the framework of Collaborative Planning, Forecasting and Replenishment (CPFR®), suppliers and buyers work together to optimize the flow of inventory into the retail distribution center and out to the stores.
In this system, trading partners collaborate to improve the accuracy of DC-to-Store and Supplier-to-Retail DC forecasts. Also, optimal inventory levels are calculated as transportation and operational efficiencies are maximized. The “Distribution Center (DC) Replenishment Collaboration - Business Process Guide” outlines the methods to attain targeted service levels to the stored and increase profitability.
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.
In many stores, promotions and other retail events generate the largest swings in demand, resulting in most out-of-stocks, excess inventory and unplanned logistics costs. While the VICS Collaborative Planning, Forecasting and Replenishment (CPFR) Guidelines include recommendations for the entire life cycle, many organizations have sought to focus collaborative efforts on retail events where their financial opportunity is greatest. The “Retail Event Collaboration - Business Process Guide” does just that – outlining a standard business process model for retail event collaboration, along with the implementation guidelines needed to support the process.
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. GS1 US members may download these standards from the GS1 US Website.
Read the Latest on CPFR®
CPFR® is a Registered Trademark of the Voluntary Interindustry Commerce Standards (VICS) Association
Title: Collaborative Inventory Management at BJ’s Wholesale Club/VICS CPFR Meeting in Waltham, MA, April 26, 2006
Description: PowerPoint presentation outlines the benefits of supply chain integration.
Title: Taking the Sales and Operations Planning (S&OP) Process the Next Step/VICS CPFR Committee Meeting, April 25, 2006
Delivered by: Larry Lapide, Research Director, MIT Center for Transportation & Logistics
Description: PowerPoint presentation details the importance of the Sales and Operations Planning (S&OP) Process, how S&OP is done, success factors & improving the S&OP process and diagnosing where you are.
Title: P&G CPFR
Delivered by: Jeff LeMay
Description: Short presentation details Proctor & Gamble’s position, status and outlook on various CPFR efforts, the sharing of how CPFR is being used to enable:
Gillette integration, the design of a consumer driven supply network (CDSN) supply network, managing recent changes in customer inventory.
Title: Scaling Collaboration
Delivered by: Andrew White, Research Director, SCM for Gartner, Inc.
Description: Document contains several graphs and discussions of the following: What is the status of CPFR? How is CPFR viewed by end users? What impacts the adoption of CPFR?
Title: Retail Event Collaboration/Review of the Business Process Specification
Delivered by: John Bermudez, VP Product Management, Demantra; Guy Yehiav, VP & GM, Supply Chain Products, Demantra.
Description: PowerPoint covers the topics of Collaborative Event Strategy and Planning Process, Collaborative Event Forecasting Process, Collaborative Event Ordering and Fulfillment Process, Collaborative Event Analysis Process and Information Sharing Requirements.
Title: Collaborative Replenishment
Delivered by: Fred Baumann, JDA Software and Matt Johnson, Retek, Inc.
Description: Presentation covers Process Summary and Business Case, Case Study: Walmart Stores, Proposed Industry Process Guidelines (Retailer-Managed Replenishment and Vendor-Managed Replenishment), Business Process Steps and Message Interchange Scenarios.
Title: CMC CPFR Pilot Case Introduction
Delivered by: Phyllis Chang, CMC Magnetics Corporation
Description: Document details CMC involvement with CPFR, including CMC Implement Roadmap (Business Process Design Roadmap and System Development Roadmap); Finding Obstacles and Solutions (Business Process Issue and Technology Lesson Development Issue).
Title: Supply Chain Collaboration: What’s Happening
Originally Printed: The International journal of Logistics Management, Vol. 16 NO.2, 2005
Composed by: Soonhong Min, Anthony S. Roath, Patricia J. Daugherty,
Stefan E. Genchev, Haozhe Chen, Aaron D. Arndt, R. Glenn Richey
Description: An in-depth analysis of supply chain collaboration from an academic perspective.
Title: Joe Andraski Discusses Collaborative Planning, Forecasting and Replenishment with Larry Smith of West Marine.
Description: Larry Smith provides his insights on such topics as the role of forecasting in overall collaboration, how CPFR is improving fulfillment without order forecasting and how CPFR can become more scalable.
Title: VICS CPFR Case Study: Store Replenishment Collaboration at Walmart
Description: Case study outlines the largest CPFR initiative in the world resulting in an in-stock rate improvement of 7.85% for the most active CPFR suppliers.
Synchronization - Hewlett Packard Style, Supply Chain Management Review, March 1, 2005 - Hewlett-Packard's Imaging and Printing business knew that it had to overhaul its supply chain. The unit constantly struggled with too much of the wrong products and not enough of the right ones, and resellers' complaints were soaring. The answer came in the form of a holistic value chain—an approach that synchronizes the supply chain by working backward from the customer, truly understanding demand, and focusing on business processes instead of technical solutions.
Title: Effective Supply Chain Management Research Project
Delivered by: Collaborative Practices Research Team, Supply and Value Chain Center, the Neely School of Business, TCU, November 15, 2004
Description: Series of graphs illustrate the positive effect of supply chain collaboration.
VICS members can sign in here to see these presentations and white papers. For others, see these documents and many more by becoming a VICS member. Read more about the benefits of membership and which membership level is right for you!
CPFR for Apparel group launched in Las Vegas on October 7, 2004