Simplied presentation on CPFR from the suppliers point of view

1. CPFR
• CPFR - Collaborative Planning Forecasting & Replenishment
“Connecting the consumer to the factory floor”, “Store within a Store”,
“Shelf connected Supply Chain”…
• Believed to have been started in 1996, funding support from Wal-Mart, SAP,
IBM and others , as a replacement to EDI. Sponsored by VICS www.VICS.org
who continues to establish standards
• Originally Retailers initiated a CPFR program but only with key partners. Now
the Retailer and Vendor relationship is changing so Mass Merchandising
Vendors will need to be CPFR enabled

2. Why?
• Lean Manufacturing is not complete unless Benefits Range
connected to the retail shelf & Lean Distribution of %
Improved Forecast Accuracy 20-30%
• Retailers have discovered that by shifting Increased Sales 10-30%
category tasks back to their suppliers that they Increased Margin Rate 2-6%
are more profitable, so they are willing to share Improved On-Time Delivery 5-10%
just about everything Increased In-Stocks 2-7%
Decreased Inventory 10-30%
• The Retailer lacks category or market insights Decreased Operating & 10-28%
that can be provided by key suppliers Logistics Cost
Source: VICS Case Studies & Collaborative Commerce Award
Winners

3. Three Pillars of CPFR
Floor Ready Violations
Master Program Season Roll Out Deductions
Chargebacks
This Program
Course Correction Metrics
Vendor Developed Reforecast GMROI
Store Planogram Store Level Weeks Supply
Assortment Retail Turns
Vendor Developed Adjustment InStock%
Store/Week/SKU Sales
Forecasts Replenishment
Calculation
Store/Week/SKU

4. Supplier Challenges
• Technology + Culture
• Standardization
• Forecasting
• Structured Planning
• Change to Proactive Thinking