CPFR Model:  1. Strategy and Planning: Collaborative Planning, Forecasting and Replenishment (CPFR)

CPFR Model: 1. Strategy and Planning

What Does CPFR Strategy and Planning Involve?
Collaboration Arrangement Steps
Collaboration Arrangement Output
Joint Business Plan Steps
Joint Business Plan Output

h2. What Does CPFR Strategy and Planning Involve?

(VICS CPFR Model)

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

h2. Collaboration Arrangement Steps

Collaboration Arrangement Output

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.

h2. Joint Business Plan Steps

Joint Business Plan Output

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.