Collaborative Planning, Forecasting, and Replenishment (CPFR)

Seminar paper from the year 2009 in the subject Business economics - Miscellaneous, grade: A, San Diego State University, course: Seminararbeit im MBA Studiengang, language: English, abstract: Today's business environment is facing more challenges than it has ever faced before. Whether it be globalization, shorter product life cycles, industry-wide consolidations, or the rapid advancements that have been made in information technology - all these factors have contributed to a steady increase in competitive pressure on domestic and foreign markets. In an economy that is increasingly becoming more volatile, organizations find it more difficult to achieve or maintain their competitive advantage. A way of overcoming these challenges and establishing advantages has been through optimization of the supply chain. Initially, these improvement efforts were limited to areas within the organization, such as inventory, quality, or the manufacturing process itself. In the early nineties, however, when the American retail and consumer goods industry was experiencing stagnating revenues and, at the same time, rising costs, an increase in productivity was hardly to be realized. At that time, aggressive pricing policies were seen as the only approach to gain market share, but the consequences, mainly a negative impact on margins and profits, made it an unsustainable business practice (Seifert, 2003). This led the retail industry to recognize that real gains could only be realized through open cooperative partnerships between retailers and manufacturers. As the supply chain improvement initiatives progressed, they began to include collaboration between the manufacturer, its suppliers, and clients. Although collaboration between trading partners was known as an efficient method for improving forecast accuracy, increasing service, and reducing costs, it was not until then that supply chain partners systematically devised processes that would move the information to where it could add value and, thereby, facilitate supply chain coordination. Since then, collaboration has been referred to as the driving force behind effective supply chain management (Horvath, 2001). One of the latest trends in supply chain management, CPFR is advertized by many authors, consultants, and software vendors as one of the most promising practices of collaboration so far (Ireland & Crum, 2005). The purpose of this paper is to examine the validity of this statement. In doing so, it will analyze the success potential associated with CPFR and, based on pilot results, evaluate the benefits and challenges that arise with its implementation.

Today's business environment is facing more challenges than it has ever faced before. Whether it be globalization, shorter product life cycles, industry-wide consolidations, or the rapid advancements that have been made in information technology - all these factors have contributed to a steady increase in competitive pressure on domestic and foreign markets. In an economy that is increasingly becoming more volatile, organizations find it more difficult to achieve or maintain their competitive advantage. A way of overcoming these challenges and establishing advantages has been through optimization of the supply chain. Initially, these improvement efforts were limited to areas within the organization, such as inventory, quality, or the manufacturing process itself. In the early nineties, however, when the American retail and consumer goods industry was experiencing stagnating revenues and, at the same time, rising costs, an increase in productivity was hardly to be realized. At that time, aggressive pricing policies were seen as the only approach to gain market share, but the consequences, mainly a negative impact on margins and profits, made it an unsustainable business practice (Seifert, 2003). This led the retail industry to recognize that real gains could only be realized through open cooperative partnerships between retailers and manufacturers. As the supply chain improvement initiatives progressed, they began to include collaboration between the manufacturer, its suppliers, and clients. Although collaboration between trading partners was known as an efficient method for improving forecast accuracy, increasing service, and reducing costs, it was not until then that supply chain partners systematically devised processes that would move the information to where it could add value and, thereby, facilitate supply chain coordination. Since then, collaboration has been referred to as the driving force behind effective supply chain management (Horvath, 2001). One of the latest trends in supply chain management, CPFR is advertized by many authors, consultants, and software vendors as one of the most promising practices of collaboration so far (Ireland & Crum, 2005). The purpose of this paper is to examine the validity of this statement. In doing so, it will analyze the success potential associated with CPFR and, based on pilot results, evaluate the benefits and challenges that arise with its implementation.

Autorentext
Markus Diederichs wurde 1977 in Troisdorf geboren. Nach der Ausbildung zum Industriekaufmann und anschließender, mehrjähriger Berufserfahrung im Logistikbereich absolvierte er sein Diplomstudium der Betriebswirtschaftslehre mit Schwerpunkt in Supply Chain Management an der Fachhochschule Dortmund. Fasziniert von der Thematik, zog der Autor danach in die Vereinigten Staaten von Amerika, um seine Studien im Bereich des Operations and Supply Chain Management an der San Diego State University zu vertiefen. Diese schloss er 2009 erfolgreich mit dem Master of Business Administration ab. Anschließend begann er eine Anstellung bei einem weltweit führenden Unternehmen der Mobilfunktechnologie- und Kommunikationsbranche in Kalifornien, USA, wo er nun bereits seit mehreren Jahren lebt.