06 3 roadmap to cpfr

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CPFR Roadmap

You will probably do several co llaborative p lann ing, forecasting, an d

replenishment (CPFR) pilots with different objectivesearly implementations

emph asizing organization, later on es exploring collaboration. Comp anies may

want to jump into CPFR pilots by following only parts of the map, depending

on their starting point. The learn ing curve is steep, and change is an effort

but knowledge gained is significant. Piloting adapts to a comp anys scale,

and the VICS CPFR Roadmap takes you there.

Introduction

Youve read the VICS CPFR Guidelines. You h ave circulated it amon g colleagues

and executives. Youve attend ed conferen ces and h ave iden tified potential

par tne rsand skeptics. So what steps do you take to implement CPFR and

demonstrate h ow it can increase sales and redu ce costs?

Many organizations would like to implement collaborative planning, forecasting,

and rep lenishm ent (CPFR). Piloting can help organizations unde rstand the

benefits of CPFR, docum ent chan ges requ ired for the furth er expan sion, and

develop strategies for overcoming obstacles. This section is designed to help

companies answer the question, How do I get started?

Th e VICS CPFR Guidelines identified the processes that comprise CPFR, from

the creation of a Front-End Agreemen t thr ough Business Plann ing, Forecasting,

and Replenishment. This VICS CPFR Roadmap is not m eant to r eplace that work.

Instead, it supplements it with basic steps that help you get started with CPFR,

test it with a tr ading par tner, and develop rollout p lans.

This VICS CPFR Roadmap is a path from awareness of CPFR opportunities to

making implementation plans. Based on the CPFR process model in th e

VICS CPFR Guidelines, it aligns you an d your trading par tner to common

objectives, and guides you together through forecast exchan ge, exception

managem ent, and th e review of performan ce results. Both partner s gain

5 19 99 Vo l u n t ar y In t er i n d u s t r y Co m m er ce St an d a r d s A sso c i a t i o n

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6 R o a d m a p t o C P F R : T h e C a s e S t u d i e s

a clear understanding of the p otential for rolling out CPFR practices throughout

their organizations.

The VICS CPFR Roadmap is divided into five steps:

S tep 1: Evaluate Your Current State

S tep 2: Define Scope and Objectives

S tep 3: Prepare for Col laborat ion

St ep 4 : Execu te

Step 5: Assess Results and Identify Imp rovements

Th e VICS CPFR Roadmap provides ready-to-use templates that can be customized

for differen t partnerships. The R oadm ap also provides a checklist for each step to

ensure all critical items have been completed.

Evaluate Your Current Stat e

CPFR begins long before piloting, with an assessment of your companys needs,

values, culture, strategies, trading par tner relationships, and track record in

implementing be st practices. This step looks for ar eas where chan ge is needed

to implemen t CPFR successfully. On ly after th is step is done will your company

be pr epared to articulate a mean ingful vision for CPFR. In add ition, the senior

leadership of your company must no t on ly understand the concept o f CPFR,

but also open ly offer th eir suppor t.

Put CPFR into your companys terms in order to gain commitment

CPFR can p rovide both d emand and supp ly benefits. Mapping these potential

benefits to your companys priorities will assist in cross-functional buy-in.

CPFR Benefits: Demand

Enhanced Relationship

Implicitly, CPFR stren gthens an existing relationship and substantially accelerates

the growth of a n ew one. Buyer and seller work hand -in-han d from incep tion

through fruition on business plan, base, and promotional forecasts. Continual

CPFR meetings strengthen this relationship.

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Greater Sales

The close collaboration n eeded for CPFR implementation d rives the p lanning

for an improved busine ss plan be tween buyer and seller. The strategic business

advantage d irectly tran slates to increased category sales.

Category Management

Before beginning CPFR, both parties inspect shelf positioning and exposure

for targeted SKUs to ensure adequate days of supp ly, and proper exposure to the

consumer. This scrutiny will result in improved she lf positioning and facings

through sound category management.

Improved Product Offering

Before CPFR implemen tation, the bu yer an d seller collaborate on a mutu al

prod uct schem e that includes SKU evaluation an d add itional pro duct opp ortun ities.

CPFR Benefits: Supply

Improved O rder Forecast Accuracy

CPFR enables a time-phased ord er forecast that pr ovides additional information,

greater lead time for production plann ing, and improved forecast accuracy v s.

either stand -alone VMI/ CRP or other industry tools.

Inventory Reductions

CPFR he lps red uce forecast uncer tainty and p rocess inefficiencies. How much

inventory does your company hold to cover up for forecasting errors or a

trading partners inability to have the product available in a timely manner?

With CPFR, prod uct can be prod uced to actual order instead of storing inventory

based on forecast.

Improved Technology ROI

Through the CPFR process, technology investments for intern al integration can

be en abled with higher qu ality forecast information. Your company will ben efit

by driving internal processes with common, high-quality data.


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Improved Overall ROI

As other processes improve, the return on investment from CPFR can be

substantial.

Increased Customer Satisfaction

With fewer out-of-stocks resulting from better planning information, higher store

service levels will prevail, offering greater consumer satisfaction.

Where does your company stand today?

Consider these questions to learn if your company is ready for CPFR:

D oes your com p a ny ha ve a cul tu re th a t va lues coo p era ti on a nd comm un ica ti on

be tw een it s d ep a rt m ents a nd w it h it s tra d in g p a rt ners?

For a CPFR partner ship to succeed, there must be a com mitment to work with

and share information between functional areas and between trading partn ers.

Many compan ies recognize room for impr ovemen t her e, but both recognizing

it and com mitting to make pr ogress is an overwhelming indicator o f the future

success of both CPFR and other business partn erships. Information sharing

brings strength that technology alone cannot provide .

H a s your comp a ny im p lem ented ot her in d ustr y best p ra cti ces?

Compan ies that h ave adopted industry best practices, such as standard p rodu ct

identification (UPC or EAN-13), Electronic Data Inter change (EDI), and the

basic principles of Quick Response or Efficient Consumer Response already

understand bo th the ir implications and bene fits. Companies that have designed

a VMI or CRP group have also gained valuable learning applicable to CPFR.

Is us in g in for ma ti on technology to sol ve busi ness cha llenges a comp a ny p ri or it y?

CPFR has been piloted with r elatively little techn ology assistance. However,

once a pilot proves a business case, implementing CPFR on a broader scale may

becom e more effective when tech nology is app lied. CPFR sponsorsh ip by senior

management becomes particularly important at this point, as CPFR may be

viewed as compe tition for IT resources. Given proven results, however, it will

become evident that CPFR complemen ts IT priorities.



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The Internet offers an opportunity to improve both internal and external

busine ss comm un ications. Whether using the Inte rnet simply as a vehicle to

expedite shared information o r to use software, CPFR is a pr ime example o f how

Intern et technology can be used to enh ance business-to-business relationships.

Develop Your Companys CPFR Vision

Before implementa tion, your company needs a CPFR vision statement. CPFR is

a business process that gives continuity to the strategies and tactics of category

managem ent, integrating your compan y goals throughou t the supp ly chain.

A well thou ght out vision answers these questions:

What are your companys objectives for CPFR?

W hat a reas of the organization will be impacted, a n d how?

H ow will su ccess be m easu red?

What will be the scope of the project?

Which product lines will be included?

H ow m an y stores an d DC s w ill be i n clu ded?

H ow m an y tra di n g pa rtn ers wil l you brin g on board in order

to have a significant impact?

What is the level of technical sophistication of your company

and your trading partners?

What is the long-term market position of your trading partners?

What corporate stance will you develop for press releases?

H ow will you docu m en t th e v isi on ?

Are Your Trading Partners Ready for CPFR?

Consider these factors when reviewing potential partners for a CPFR relationship:

Can your tra ding pa rtner relationships be chara cterized a s open and trusting?

A trusting and op en relationship en han ces the bene fits of CPFR through the

sharing of sensitive information.


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D o you a nd your tr a d in g p a rt ner ha ve comp lem ent a r y str engths a nd w ea kn esses?

Think of what each partn er can b ring to the CPFR initiative. For example,

one may be strong technologically, providing the majority of the technology

infrastructure . The other may be stron g in market and con sumer knowledge,

and th rough the CPFR relationship be able to provide this stren gth. Be cautious

not to assume that your largest trading partn er is the most likely candidate.

D oes your tra d in g p a rtner ha v e th e a p p ro p ri a te com m it ment a nd resour ces requi red

to m a ke CP FR successfu l?

Without a strong commitment to CPFR, its potential will not be realized.

D oes your tra d in g p a rtner ha v e exp er ie nce w it h CP FR w it h a noth er p a rt ner ?

Build on learn ing. Even th ough d evelopmen t time may be greatly redu ced by

leveraging the learning already gained through your partners previous efforts,

the template for e ach n ew partn ership will probab ly be d ifferent.

Can your trading partner quantify the potential internal and external benefits?

CPFR requ ires a paradigm shift from an adversarial stance to a win-win

relationship, as well as the working together by departments that may have never

communicated directly or effectively in the past.

Develop a Business Case to take to your Partners

The Capability Assessment, in A pp en dix A , helps answer these questions, and

helps the partners recognize their current state and where they need to change

to imp lemen t a CPFR par tne rship successfully.

Pilot experience has already been brought to bear:

The most produ ctive deployment meth od was to have the seller team

members reach consensus on the scores separately from the buyer team

members.

On ce each company reached its consensus on the individual scores, the two

compan ies reviewed each CPFR assessmen t elemen t together to agree on the



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score. Primary differen ces were d ocumen ted along with the r ationale for th e

score in each area. The additional scoring rationale provided critical input

to improve the pr ocess for each elemen t.

When averaged and viewed in the overall context of the scoring grid, the raw

scores identified the relative strength of each of the four CPFR process areas.

The overall information enabled the partner s to set priorities for which CPFR

processes to improve.

At the detailed level, the ind ividual scores and commen ts provided th e

information to identify specific actions needed to improve the score on the

particular element.

This assessment p rocess is a method to iden tify areas that n eed immediate

attention or that could be sequenced later in CPFR process improvement.

The key to this assessmen t process is und erstanding two critical aspects of CPFR:

1. All four process areas identified in the assessment must be maximized

to fully realize the benefits of CPFR.

2. Partner ing compan ies have th e flexibility to d ecide the priority

in which key CPFR processes will be worked on and improved .

Define Scope and Objectives

After you create a CPFR Vision , you are ready to be gin piloting. Step 2 requires:

1. Ga ining commitment from your trad ing partner.

2 . Assignin g tea m m em be rs a nd est a bl ishi ng th ei r ro les .

3 . Sel ect in g p ro d ucts a nd loca ti on s th a t w il l be in clu d ed in th e p ro cess .

4 . D eci d in g w hi ch p a rt ( s) of th e ni ne-step CP FR p ro cess to test.

5 . Esta bli sh in g key p er for ma nce m etri cs to m ea sur e th e in it ia ti ves succes s.

This is truly the implementation of the CPFR Front-End Agreement as designed

in the VICS CPFR Guidelines.

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Team Members, Roles and Responsibilities

Role Responsibilities Typical Typical

Position Buyer Position Seller

Sales The sales co ll aborat ion t eam Category , Sales

Col labo rat io n i s r esp onsi bl e f or est abl ishi ng M an ag er Repr esent at ive

sales forecasts, prom otion plans, Buyer, (Account

collecting and reporting sales Replenishment Relationship

results. The team is also Analyst Ow ner)

responsible for recomm endingand imp lementing changes to

the replenishment system.

Replenishment The replenishment team Inventory Customer Service

determ ines the order forecast, Analyst M anager,

and co ll ect s actual o rder and (Re-) Buyer Fo recast

inventory information. Analyst, Order

Management

Analyst

Col labo rat io n Th e col lab or at ion techn ol og y IT Co or di nato r, IT Coor din at or,

Technology team sets up the col laborat ion Project Manager, Project Manager,

environment, moni tors Systems Systems Manager

technology effectiveness, and Managerevaluates technical rollout

requirements.

Table 1


Preparations

The p roject begins by engaging at least one agreeable trading par tner. To keep

the p ilot manageable, no more than five trading partner s shou ld be involved.

Template Team Members, Roles, and Responsibilities

Each trading partner identifies a management-level sponsor. The spon sors

select team members, ensure com mitment to the p roject, and r eview results.

The management sponsors for each company identify a team of three

or more individuals who can participate in the initiative at least 10 hours

each week. On e team mem ber from each side is assigned to each of these

three areas:



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The man agement sponsors may also include an external project facilitator

(systems integrator, software vendor, or n etwork services provider)

whose prior expe rience can h elp guide the p roject team.

The man agement sponsors select a team captain for daily management

of the pro ject.

Project Kickoff

On ce the p roject spon sors identify team mem bers and roles, the p roject is

formally initiated with a kickoff meeting.

Template Kickoff Meeting

All team members, including spon sors and affected departmen t liaisons attend

a on e-day kickoff meeting.

Agenda

1. Introduce the team.

2. Crea te th e p il ot p ro ject ov er v ie w, in clu d in g p er for ma nce m etri cs.

3 . Begi n join t sco p e-set ti ng ( see tem p la te ) .

4 . Begi n join t ob jecti ve-set ti ng ( see tem p la te) .

5 . Set fut ur e meeti ng d a tes, ti mes, a nd loca ti on s.

A CPFR pilot project is designed to give trading partners a sense of the real

impact of CPFR on th eir organ izations by par ticipating in a rap id test. Though it

is limited in scope, a pilot project includes the complete cycle of CPFR planning,

collaboration , and review. It should also investigate information te chn ology tha t

can au tomate th e p rocess, in pr eparation for wide-scale future collaboration.

Give all team members the VICS CPFR Guidelines and the VICS CPFR Roadmap. If a

software package is used, distribute the u ser documen tation. IT team members

should also receive software package administration and integration d ocumen tation.

(Detailed training sessions on CPFR practices and associated software are held in

the second p hase of the pro ject.)


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forecast qua lity. This is critical, since a h igh-quality forecast on the fron t end

greatly reduces the amount future exception communication.

Iden tify a process for determ ining both sales and in-stock inventory positions

for each SKUs/ location( s) that will be included in the project.

(Th is information can be collected and en tered from othe r systems,

or manu ally, if necessary.) Captu re baseline d ata in or der to de termine

if you have met your objectives.

Iden tify wher e the best forecast data resides and how it can be used

for the project. Use SKUs where h istorical data is available.

Template Objective-Setting

Set per formance me trics. The p roject shou ld focus on increasing forecast and

planning accuracy, reducing both safety stock requirements and out-of-stock

conditions. The team sets targets for th ese measures relative to pe rforman ce

in the same period a year earlier (or some other comparable period).

Here is a sample set of ob jectives:

15% increase in forecast accuracy (from 60% to 75% )

10 % redu ction in su pply chain in ventory (from 200 0 cases to 18 00 cases)

3-5% increase in retail in-stock position (from 90 % in -stock to 94% )

When setting objectives, consider h ow the data will be collected. On e common

examp le is total supply chain inventor y. Often , man ufacturers do not tally

inventor y by customer, so assessing to tal supp ly chain inven tory may be difficult.

Don t be discourage d. Work with what you have. In this example, a man ufacturer

may be able to provide good estimates on inventory by analyzing h ow its total

inventory for each item is affected.


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Step 2 Closure Checklist

Before beginning Step 3, the team captain verifies the status and repo rts it

to the project spon sors:

All team members have been assigned, an d time has been allocated

for team member participation throughout the project.

Products and locations for collaboration h ave been identified,

and associated personn el have been notified.

Metrics such as forecast accuracy, inventory red uction ,

and out-of-stock targets have been established.

Sources of forecast data h ave been identified.

CPFR training session and future project team meetings

have been scheduled.

Prepare for Collaboration

In Step 3, the project team studies the details of the CPFR business process, and

identifies the techn ology and additional resources required to support it. Sales

and replenishment team members develop ground rules for managing exceptions

and ch anges. Collaboration techn ology team mem bers install and con figure the

information systems (purchased, developed, or simple spreadsheets and e-mails)

used to supp ort collaboration between p artner pilot teams. At the end of this

step, collaboration is ready to begin.

Process and Technology

Step 3 starts with a training session for the team, so team members can begin

working with CPFR processes and techno logy.

Template Collaboration Training Session

All team members except sponsors participate in day-long collaboration training.

The first session reviews the CPFR process model and Fron t-End Agreement,

concluding with a case study.

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The second session trains team members how to use the selected techn ology

to review exceptions, revise forecasts, and monitor scorecard measures.

Training concludes with an on -line simulation of a trading scenario,

using th e selected techno logy to interact.

Collaboration Techn ology Team mem bers take an add itional day of training

on tech nology administration an d integration.

Configuration

Once the sales and replenishment collaboration team members are trained,

they begin to p repare their forecasts and exception thre sholds. Meanwhile,

collaboration tech nology team members set up collaboration tech nology and

integration in terfaces.

Template Sales Forecasting Preparation

The sales collaboration team creates an initial sales forecast for weeks 9-14

of the project. The n umber of weeks in the forecast can be extended to

align with the next fiscal period.

Create a sales forecast at the SKU level in no rmal buckets (such as weekly),

aggregated to the buyer distribution cen ter level or other appropriate

customer ship point (for example, by store, if Direct Store Delivery is being used).

Specify prom otional forecasts (promotions with effective dates, projected

prices and volume impacts) indep end ently of the base dem and forecast

values. Seasonal uplift may be com bined with base dem and for simp licity.

The accuracy of promotional forecast can be greatly enh anced th rough the

use of high-quality lift tables that incorporate historical demand data and

related causal information.

Set exception thresholdsfor example thresholds could be at 5% change

in base demand, 15% change in promotional demand.

Share the sales forecast amon g trading partners. Exceptions are triggered

based up on changes to this forecast, regardless of who makes them.


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Template Order Forecasting Preparation

Give rep lenishmen t team member s early access to promotional plans

to develop th e ord er forecast.

Set the ord er forecast to the level of detail that you are going to replenish

(such as SKU level, weekly, by customer distribution center) .

Either th e seller or buyer creates an initial order forecast covering the weeks

of sales planned in the sales forecast and incorporating the sellers order

requ iremen ts (such as minimum ord er quan tities). For example, if the

purchase-order-to-store replenishment cycle time is one week, and the sales

forecast is for weeks 9-14 of the project, then the order forecast should be

for weeks 8-13. Add itional weeks can be added to support inventor y builds

and other logistics to supp ort th e sales plan.

Set exception thresholds. For example thresholds could be at 5% change

in base demand, 15% change in promotional demand.

Share the order forecast among trading partners. Exceptions are triggered

based upon changes to th is forecast, regardless of who makes them.

Template Collaboration Technology Configuration

Each company sets aside server systems for the project or can subscribe to a CPFR

service provider.

IT staff or software vendor personn el install collaboration software on-site,

or activate th e service provider.

Each compan y provides extracts of product and location data to be used in

the project. These products and locations remain fixed throu gh the project

life cycle, to simplify master data maintenance and integration interfaces

for the p ilot.

IT personn el (or business partners) load the product and location data

into the collaboration software.

Each compan y provides a format for forecast data to be loaded.

IT, consulting, or software vendor personnel develop scripts to load

and update th is data.



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To comp lete Step 3, team mem bers should meet to review their r eadiness for

on-line collaboration. By the m eeting date, the team should h ave agreed u pon

an initial forecast for th e collaboration period, an d th e collaboration software

should be up and r unning with the required p rodu cts, locations, and initial

forecast values entered.

Template Pre-Pilot Meeting

All project team members, including sponsors, participate in a pre-pilot meeting.

Agenda

1. Review initial sales forecasts, including planned promotions.

2 . Rev ie w in it ia l or d er foreca sts .

3 . D iscuss logi sti cs is sues ( such a s ca rri er a rra nge ments) th a t could a ffec t th e p la ns.

4 . Rev ie w th e sta tu s of colla bo ra ti on techn ology; d em onstra te techn ology w it h p ro jec t

p ro d ucts a nd loca ti on s confi gured .


Before beginning Step 4, the team captain verifies the status and r epor ts it to th e

project spon sors:

All team mem bers have been trained.

Initial sales and o rder forecasts for all prod uct/ location combinations

have been agreed upon .

Collaboration technology is ready to begin.

Execute: Performing the Pilot

In Step 4, the sales and rep lenishment collaboration teams begin to exchange

forecasts with each other, mod ifying them to re spond to chan ging conditions.

The collaboration technology team gains experience managing the en vironment,

and prep ares for rollout to a large number of locations and projects after the

pilot is complete.

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The Collaboration Process

Sales and order forecast collaboration follow specific ground rules to secure

benefits.

Template Forecast Collaboration

Determine the rules for changing forecasts.

The p artner s exchan ge new or revised forecasts at least weekly.

The bu yer en ters the latest sales results for each product weekly.

A partn er who d isagrees with a proposed forecasted value counter-proposes

a change , along with comments. Coun ter-proposals are mad e within five

business days. If a partn er does not receive a counte r-proposal within that

time, the p roposal is accepted.

The ord er forecast owner is the final arbiter of forecast values. After round s

of three changes, only the o rder forecast owner can chan ge a forecast.

Technology Rollout Planning

Consideration of techn ology rollout begins now, although details of the rollout

steps themselves are part of Step 5.

The collaboration techno logy team uses the p ilot experience to und erstand

the IT requirements for a larger-scale rollout of forecast collaboration practices,

including electronic commerce, security, and application integration issues,

as well as staffing, trainin g, backup / recovery, and support p roced ures. A clear

technology rollout plan produced dur ing this phase of the p roject can greatly

accelerate future results.

Template Collaboration Technology Rollout Planning

Each organization develops its own plans for technology rollout.

Assess prospective trading p artner s electronic commerce capabilities.

How man y will use EDI? How man y will have the ir own CPFR ser ver?

How many will be client users only?



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Determine which other application data feeds will be requ ired to maintain

up-to-date pr oduct, location, and partner master data. Evaluate the level of

effort requ ired to integrate th ese sources with the collaboration software.

Determine which applications requ ire or provide forecast information for

the r ange of prod ucts and locations to be covered in a general rollout.

Evaluate the level of effort r equired to integrate these sources to the

collaboration software for import/ export.

Configure the corporate firewall and web servers to allow secure access

by CPFR trading partners.

Identify the nu mber of core users (planners), occasional users (man agement,

warehouse personn el, sales peop le), support p ersonnel, and adm inistrators.

Estimate training requirements for the proposed user base.

Develop a techn ology rollout timeline, including procur emen t, installation,

integration, training, and mobilization of support r esources.

Collaboration Review

After about four weeks of collaboration, the project team meets to discuss

progress, problems, and ch anges. The team then takes an add itional two weeks

of collaboration to deter mine wheth er adjustments have an impact.

Template Collaboration Review Meeting

All project team m ember s, including sponsors, participate in the collaboration

review.

Agenda

1. Discuss major exceptions encountered i n the first four w eeks of collabor ation.

2. Ev a lu a te th e ef fect iv eness of re sp onse to cha nges.

3 . Pro p ose p ro cess enh a ncem ent s.

4 . Ad ju st ob jecti ves a nd colla bor a ti on grou nd rules.


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The project team has participated in at least six weeks of on-line sales

and orde r forecast collaboration.

The initial results and participan t commen ts have been summarized

and reviewed by both trading partner s.

The pro ject team has identified future technology and software

modifications that will enhance the process.

The pro ject team has held a collaboration review meeting, app lying ideas

from the first four weeks to improving the process in the final two weeks.

Results have been r eviewed with th e Pro ject Spon sor.

Assess Perform ance

and Identify Next Steps

In Step 5, th e team and its management review its progress, repo rt r esults to their

respective organizations, and make p reparations for broader CPFR rollout.

Partnership Review

Every six to 12 weeks of collaboration, the business team reviews actual results

against the target metr ics. The team also considers the busine ss process impact

of their partnership.

Template Collaboration Scorecard

Evaluate the actual results against metrics that were agreed upon in the

Joint Planning Meeting and against data available from previous periods.

Compare weekly SKU/ store level sales forecast accuracy with the

year-ago per iod, and note changes.

Compare weekly SKU/ DC-level orde r forecast accuracy with results

for the year-ago period, and note ch anges.

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Compare total in-stock inventory at distribution centers and stores per

product with that for the year-ago period. Adjust for changes in th e nu mber

of prod ucts and stores, and n ote wheth er th e balance of inventory has shifted

up o r down the supply chain.

Compare the n umber of store-level out-of-stock events with those for the

year-ago per iod. Calculate relative to the in -stock percen tage per SKU.

Identify the number of exceptions and their root cause.

Add any other m easures that seem significant after the collaboration period.

Has ther e been significant sales growth in the category? Were th ere special

external con ditions ( weather, new competitors, product changeovers,

promotional merchand ise, store op enings/ closings, staff changes) th at

affected results? How can th ese factors be accoun ted for in th e future?

For a sample copy of the pilot team scorecard, see A pp endix F.

Template Business Process Review

Review cases in which a bu siness process or forecast changed dramatically.

What caused the change? Did the CPFR process red uce problems associated

with the chan ge? Were the re specific ben efits over past ways of do ing

business?

Based upon the pattern of changes that occurred, what future oppor tunities

are revealed?

Can purch ase orders be eliminated, and collaborative forecasts be used

to trigger replenishment (actual orders) instead?

Were an y organizational problems identified?

Template Collaboration Technology Review

Assess the con tribution o f CPFR techno logy to achieving project objectives.

Highlight new opportun ities the technology has uncovered , as well as any

issues or concerns.

Present the collaboration techn ology rollout plan to other team members.

Incorporate their feedback.


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Determining Next Steps

Before making a final rep ort, team spon sors discuss what next steps they will

recommend to their r espective organ izations about continued collaboration.

Future initiatives between the implementation partn ers are determ ined jointly.

Team m ember s from each or ganization also consider the next steps to take

relative to their own trading partner networks after the initial phase reviews are

completed. What additional partn ers should be included? Which product lines

should be added? Training requ iremen ts, organizational changes, project costs,

and rollout time frames shou ld all be estimated.

After a successful pilot, there are a number of ways to expand CPFR, and

numerous areas you would want to test and learn abou t:


Expanding CPFR

Successful

CPFRImplementation

Figure 1

AddTradingPartners

Automatethe Process

AddSKUs

Integratethe Results

IncreaseLevel ofDetail

Expand toOther CPFR

Processes


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1. Expand to other CPFR proce sses

If the CPFR implemen tation focused on joint business plann ing and sales

forecasting, expand to o rder forecasting collaboration

2. Add SKUs

If the CPFR implementations initially focused on a limited set of items,

increase the gains by expand ing to other p rodu ct categories

3. Increase the level of detail

If the implementation focused on warehouse-level information,

better results can be achieved by moving to store-level information.

4. Automate the process

Although few of the comp anies that have initiated CPFR have h ad to add human

resources to complete their implemen tation, automating the collaboration

process will produce increased gains. The vision of CPFR is one of managing

forecasts by exception, which can best be achieved through an automated

processespecially when the number of products and tr ading par tners increases.

5. Add trading partners

The bene fits gained from collaborating with one or a small number of trading

partners can be extended to more trading partners, depending on the relationship

with, culture, and capabilities of each partn er. Even before a critical mass is

achieved, the re ar e ben efits to each relationship.

6. Integrate the results

The benefits of CPFR are fully realized only when the outputs of the collaborative

processes are integrated with the in ternal processes at both companies. For a

seller or supplier, this means using the collaborative forecast in the production

plann ing, capacity plann ing, and materials requ iremen ts planning p rocesses,

as well as financial plann ing processes. For the buyer or ret ailer, this means

integrating the collaborative forecast into buying, merchandising, replenishment,

and finan cial plann ing processes.


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Reporting Results

The pro ject team shou ld publish a joint p roject report that allows others in each

partner organization to understand the impact and potential for collaboration.

The initial CPFR experience contributes greatly to a successful general rollout.

Template Project Report

A project report has six major sections:

1. Execut ive Summa ry

2 . Pr oject Scop e, O bjecti ves, a nd Reso ur ces

3 . Bu si ness Pro cess Resu lt s

4 . Co lla bo ra ti on Techn ology Resu lt s

5 . N ext Ste p s

6. Organization-Specific Plans

Executive Su mm ary provides a h igh-level overview of the project.

Project scope, Objectives, and Resources discusses the original conditions and

changes that were made as a result of the initial CPFR experience.

Bu sin ess Process R esu lts reports results against key metrics.

Collaboration Technology Results describes how information tech nology

supported the projects objectives.

N ext St eps suggests future collaborations between the partn ers,

including the business and techno logy rollout plans.

Organ ization-Specific Plan s are private to each organizations version

of the repor t. They can include proposals to expand collaboration

to oth er trading partner s, projected costs, organizational impact,

and pre liminary project plans.

The team captain creates a summ ary presentation to supp lement the

project report.



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Project Completion Checklist

The project team h eld a collaboration review meeting.

The p roject spon sors agreed upon next steps, and d eveloped

organization-specific deployment plans for additional collaboration initiatives.

The project repo rt for th e curr ent review was written an d d istributed to

other s within the organization.

Senior Managemen t has been informed of the results and has contributed

to the recommendations for expansion.


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06 3 roadmap to cpfr

Documents