CPFR Model: 4. Analysis – Performance Assessment and Collaboration: Collaborative Planning, Forecasting

CPFR Model: 4. Analysis – Performance Assessment and Collaboration

Performance Assessment Overview
Resolving the Exceptions May Require a Negotiation!
How Collaboration Is Built into the Model
CPFR Collaborative Roles

h2. Performance Assessment Overview

(VICS CPFR Model)

  • Performance assessment is essential to any understanding of collaboration benefits.
  • The specific measures can vary from one situation to the next, but generally fall into two categories:
    • Operational measures: fill rates, service levels, forecast accuracy, lead times, inventory turns, etc.
    • Financial measures: Costs, item and category profitability, etc.
  • In reality, partners are often reluctant to share financial measures and estimates of “profitability” can vary widely, depending on how one defines and assigns costs.

Resolving the Exceptions May Require a Negotiation!

Determine if negotiation is required.

  • Not all instances of resolving exceptions require detailed negotiations with parties. Remember—negotiation is a time consuming process!
  • Discussion Question: When should exception negotiation occur? In what circumstances?
  • Discussion Question: What areas or issues besides price and delivery date may require negotiation between the participants?

[Negotiation will be covered in depth in module 4?]

h2. How Collaboration Is Built into the Model

(VICS CPFR Model)

Each collaboration task has corresponding enterprise tasks

Most retailers and manufacturers are already doing these tasks!

CPFR provides a framework for coordinating these efforts.

h2. CPFR Collaborative Roles

  • CPFR is always superimposed on an existing demand planning and replenishment process
  • Compatible with either VMI or conventional ordering processes