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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
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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.
1Step
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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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8 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
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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10 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
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.
2Step
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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
12 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
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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16 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
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.
3Step
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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 .
Step 3 Closure Checklist
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.
4St
ep
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20 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
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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Step 4 Closure Checklist
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.
5Step
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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:
3 .0 Roadmap to CPFR
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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26 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
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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