CPFR Model: 2. Demand & Supply Management: Collaborative Planning, Forecasting & Replenishment
Published on: Jan, 31, 2011
*h2. CPFR Model: 2. Demand and Suply Management
What Is CPFR Demand and Supply Management?
Sales Forecasting Overview
Sales Forecasting Steps
Sales Forecasting Output
Order Planning / Forecasting Overview
Order Planning / Forecasting Steps
EXAMPLE: How Sales Forecasts Drive Order Forecasts …
Order Planning / Forecasting Output
Project POS demand and order and shipment requirements over the planning horizon.
- Sales forecasting
- Projects demand at the point of sale
- Order planning / forecasting
- Determines future product order & delivery requirements based upon the sales forecast.
- Takes into account inventory positions, transit lead times, shipment quantities, and other factors.
- Consumption data is used to create a sales forecast.
- This consumption data differs depending on the product, industry, and trading partners:
- Retailer POS data
- Distribution center withdrawals
- Manufacturer consumption data
- Important to incorporate information on any planned events (ex. – Promotions, plant shut downs, etc.)
1. Analyze current joint business plan
- Analyze the potential effects of the current joint business plan on future retail sales
2. Analyze causal information
- Analyze the potential effect of causal factors on future retail sales based on historical events and the resulting sales impact
3. Collect and analyze consumption data
- Point-of-Sale (PoS) data, warehouse withdrawals, manufacturing consumption
4. Identify planned events
- Store openings or closings, promotions, or new product introductions
- This comprehensive list of events will be used to populate a shared-event calendar
5. Update shared event calendar
- Align events from each trading partner, resulting in a common plan
- Agree upon this short-term event plan
6. Gather exception resolution data
- Gather sales forecast exception resolution data from previous iterations
7. Generate sales forecast
- Generate the forecast for a given period with forecasting tools that use all relevant information and guidelines. Either partner or both partners may generate the sales forecast, depending upon the scenario
A single sales forecast generated by one or both parties
- Used as a baseline for the creation of an order forecast, as well as other supply chain activities
- Sales forecast, causal information, inventory policies, etc. are used to generate a specific order forecast.
- Actual volume numbers are time-phased and reflect inventory objectives by product and receiving location.
- The short-term portion of the forecast is used for order generation.
- The longer-term portion is used for planning.
Using POS forecast and inventory policy information, we can calculate when each store needs to release an order to the Retailer DC …
...and this info is then used to generate a replenishment forecast for the DC.
The same process can be used to develop an order forecast for the manufacturer.
A time-phased, netted order forecast.
- The order forecast allows the seller to allocate production capacity against demand while minimizing safety stock.
- The real-time collaboration reduces uncertainty between trading partners and leads to consolidated supply chain inventories.
- Inventory levels are decreased, and customer service responsiveness is increased. A platform for continual improvement among trading partners is established.
Read the Supply Chain Management Professional Newsletter
Read the latest supply chain research, articles, and news as soon as we post them.
- Introduction: Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutorial
- Organizational Implications: Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutoria
- CPFR Model: Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutorial
- CPFR Model: 1. Strategy and Planning: Collaborative Planning, Forecasting and Replenishment (CPFR)
- CPFR Model: 3. Execution: Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutorial
- CPFR Model: 4. Analysis - Exception Management: Collaborative Planning, Forecasting & Replenishment
- CPFR Model: 4. Analysis - Performance Assessment and Collaboration: Collaborative Planning, Forecas
- Summary: Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutorial
- References: Collaborative Planning, Forecasting and Replenishment (CPFR): A Tutorial