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CPFR
CPFR
CPFR
CPFR is an acronym that stands for Collaborative Planning, Forecasting and Replenishment.
It is a practice or framework that helps reducing the supply chain costs through
collaborations among multiple partners in a single supply chain.
There are four phases of CPFR as follows:
Strategy and Planning: This phase involves laying down the strategy for collaborative
relationships between supply chain partners. The idea is that all organisations involved in
partnership share common business goals. Roles, responsibilities and procedures are also
set out in the strategy and planning phase.
Demand and Supply Management: This is the element which focuses on sales and order
forecasting and the planning of orders.
Execution: This is the phase concerned with the processes of producing, stocking,
dispatching, and delivery of materials to end-customers.
Analysis: This element comprises of assessing the performance of supply chain performance
and adjusting and modifying your strategy based on the analysis.
Successful implementation of CPFR results in many advantages which are as follows:
Improved accuracy of sales and order forecasts
Reductions in inventory levels
Closer relationships among the supply chain partners
Reduced supply chain uncertainty
Realisation of supply chain cost reductions
More effective mitigation of supply chain risks
Improved flow of materials and information up and down the supply chain
Greater efficiency in production and manufacturing
For example: Home appliance giant Whirlpool adopted CPFR for its supply chain and
enjoyed immense success. Before CPFR was adopted, Whirlpool was struggling with a
forecast error rate of 70%, which reduced to 11% after the company and its supply chain
partners began working together under the CPFR framework.
Companies like Macy's, J.C. Penny, Zara, and Target are among the many apparel retailers
who have adopted the CPFR model
Sources:
https://www.thebalancesmb.com/how-cpfr-can-enhance-your-supply-chain-4158975
https://www.supplychainsecrets.com/an-introduction-to-cpfr-in-the-supply-chain/