CPFR Model: 1. Strategy and Planning
Establish the ground rules for the collaborative relationship. Determine product mix and placement, and develop event plans for the period.
- Collaboration arrangement
- Setting the business goals and defining the scope for the relationship
- Assigning roles, responsibilities, checkpoints and escalation procedures
- Joint business plan
- Identifies the significant events that affect supply and demand, such as promotions, inventory policy changes, store openings / closings, and product introductions
A document that gives both partners a co-authored blueprint for beginning the collaborative relationship.
- Defines the process in practical terms.
- Identifies the roles of each trading partner and how the performance of each will be measured.
- Spells out the readiness of each organization and the opportunities available to maximize the benefits from their relationship.
- Formalizes each party’s commitment and willingness to exchange knowledge and share in the risk.
A mutually agreed upon joint business plan that clearly identifies the roles, strategies, and tactics for the SKUs that are to be brought under the umbrella of CPFR.
- Cornerstone of the forecasting process.
- Should greatly reduce exceptions and the need for excessive interactions.