Which statement is true of collaborative planning, forecasting, and replenishment (cpfr)?
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Has your organization been struggling to deliver a consistent fill rate
to your client or service level to your client’s customers? Has it been challenging for your company to keep decent inventory coverage or maintaining satisfying forecast accuracy? If you answered yes to one of these questions, it might be time for your corporation to rethink some aspects of your supply chain. What Is CPFR?In today’s competitive market, it is more and more difficult (if not almost impossible) to gain efficiencies and improve demand response for companies working in silos. One of the key enablers of efficiencies and improvements across supply chains is to create and use collaborative planning, forecasting and replenishment (CPFR) strategies across organizations’ boundaries. CPFR strategies allow aligning of multiple S&OP processes and jointly plan supply chain activities to ensure that the joint business plans between organizations are respected, while minimizing costs and maximizing efficiency from end-to-end of your supply chain. Collaboration is a journey; it is built step by step. It requires a significant investment of time and resources. Each client has a different mission, organisational structure, targets, objectives and so forth. There is no “one size fits all” solution; collaboration has to be adapted and tailor made for each major customer. Hence, the first step is to identify for which customers the return on investment will be the greatest. The client needs to have a collaborative mindset, an open mind and represent a significant percentage of your total turnover. CPFR Is Collaborative By NatureSecondly, you need to determine which individual in your organization has the right skills and knowledge to build such an important project. This person needs outstanding client facing and PR skills while having a great and extended knowledge of internal processes, systems, business opportunities and a great sense of the “big picture”. To kick off the CPFR project, the objectives, priorities and expectations of both parties need to be discussed, defined and agreed. Furthermore, the customer’s processes, systems and operational rules have to be mapped and completely understood. Subsequently, the collaboration project leader has to realise a quick “win-win” in order to gain the trust and build relationship with the customer’s organisation. I can’t stress enough the importance of relationship and trust for successful CPFR. Afterwards, joint key performance indicators need to be established. Collaborative companies need to agree on SMART objectives (Specific, Measurable, Attainable, Realistic or Relevant and Time based). A target for each KPI has to be determined. I highly recommend creating a weekly scorecard or dashboard displaying all the KPI to track and monitor. This dashboard has to be shared between all stakeholders of both corporations. It is very useful to monitor KPI, identify opportunities and keep everybody informed of the project’s progress. Corrective actions need to be taken to improve results and tackle the different challenges and opportunities. If you are able find the right balance of all these ingredients, using the right resources in the right time, your organization will definitely become the best in class supplier for your customer! CPFR strategies are great tools to make your supply chain a competitive advantage in today’s market! Cedrick Laporte-Roy
Collaborating with partners across the extended supply chain, on demand forecasting and real time demand sensing, helps stock outs in volatile market cycles Aftermarket services are a high-margin business, and they account for a large portion of profits, especially in heavy equipment manufacturing. The biggest problem in the present-day world is the high competition and volatility of market fluctuations, causing downturns and upturns. No matter what the causes are, the effect is either going to have high backorders from customers or end with huge unsold inventory lying on the shelf. There is not a one-size-fits-all answer to solve this problem. Problem Statement In recent years, many large heavy equipment OEMs experienced excess inventory levels in a downturn and stock outs in an upturn. To carry the right inventory at the right time, in the right regions, for the right customers has always been a challenge, especially during volatile market situations. Recently, one of CGNs clients had gone through a severe downturn, and as a result launched initiatives, reducing material costs and inventory, across the organization. Even before the recovery was seen, the company experienced a sudden growth in demand, which resulted in back orders. CGN’s extended collaborative supply chain management solution, which encompasses concepts of collaboration planning, forecasting and replenishment (CPFR), as well as CGN's digital strategies have helped clients understand customer behavior, provided correct upstream forecasting signals, established end-to-end supply chain connectivity and reduced back orders, while improving service levels. Overview of CPFR Approach (CPFR) Collaborative planning, forecasting, and, replenishment extends vendor managed inventory principles and is the latest stage in the evolution of supply chain collaboration. Older supply chain initiatives have gaps in their practices. As in many operations, financial plans take precedence over forecasting, resulting in high inventory levels, lower order fill rates, and increased expedited activities. CPFR is a set of business processes that help eliminate supply and demand uncertainty through improved communication and collaboration between supply chain trading partners. It also facilitates the reengineering of replenishment between trading partners. An important promise of CPFR is that accuracy of the forecast (demand, order, sales) can improve by having the customer, dealers and suppliers participate in the forecast. In general terms, buyers and sellers work together to satisfy the demands of an end customer, who is at the center of the model. Figure 1. (below) illustrates this model, which is applicable to many industries. If a discrepancy occurs, the trading partners can get together and decide on the replenishment quantity to rectify the problem. This type of collaboration offers great potential for drastically improving supply chain performance  Fig 1. Components of CPFR Model CGN Solution Below are the steps taken to set a stable CPFR platform
CPFR is not considered a technical standard. The CPFR process does not fundamentally depend upon technology. CGN’s extended solution combines process with use of technology. It advocates using common tools and processes to improve supply chain planning through accurate and timely information flow. Powering up the CPFR process with technology can make the process more scalable. The following are examples that have been developed to facilitate the process:
CPFR is not considered a technical standard. The CPFR process does not fundamentally depend upon technology. CGN’s extended solution combines process with use of technology. It advocates using common tools and processes to improve supply chain planning through accurate and timely information flow. Powering up the CPFR process with technology can make the process more scalable. The following are examples that have been developed to facilitate the process:
Collaboration is the crux of CGN’s supply chain management. Ongoing and long-term collaboration and partnership between manufacturers and dealers delivers value to customers and profitability to all collaborating partners. Some of the critical success factors that could influence adoption of this process are:
Our experience suggests that, for the CPRF model to be successful, it is more important to align supply chain goals with digital strategies. CGN has years of experience delivering these unique solutions, helping clients achieve high performance results. At CGN Global, we transform businesses globally, by delivering the unexpected. It is through years of service and outstanding transformative solutions provided, that we believe adopting a highly automated digital operating model can establish end-to-end processes, data connectivity and improved visibility, across the board. CGN. Good thinking. Globally. Which of the following is a benefit of collaborative planning forecasting and replenishment CPFR )?The benefits resulting from a successful application of CPFR include reduction in stock-outs, improved inventory management, shorter cycle times, increase in sales revenues, stronger relationships between trading partners, better overall system visibility, customer service and improved cost structures. Shu et al.
Which of the following describes collaborative planning forecasting and replenishment CPFR )?Collaborative Planning, Forecasting and Replenishment (CPFR) describes a set of practices in which trading partners plan key supply chain activities to efficiently meet customer demand at the lowest possible cost.
Which of the following are the benefits of CPFR?The CPFR process streamlines many supply chain functions, lowers costs in inventory and logistics, and improves supply chain efficiency and inventory movement. By establishing a common process and defined metrics, CPFR aids retailers and suppliers in improving their processes and reaching their goals.
How many steps are there in collaborative planning forecasting and replenishment CPFR )?Step 2: There are five main steps in (CPFR)
The Collaborative Planning, Forecasting, and Replenishment (CPFR) approach are utilized to derive consensus supply chain forecasts.
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