Collaborative Planning, Forecasting
and Replenishment (CPFR)
Steve Whited & Dennis Van Deusen
Objectives
Define and understand CPFR
Understand CPFR Goals, Costs and Benefits
Describe CPFR at MeadWestvaco Consumer & Office Products
(MCOP)
CPFR
Defined
An Established process where by Vendor and Retailer communicate
forecasts in order to better align common strategic goals.
Synchronization of supply and demand will improve each party’s
overall performance.
Planning
Forecasting
Replenishment
CPFR Cost/Benefit
Costs
Programming;Software Enhancements; EDI
Dedicated Analysts - increased payroll
Retailer may charge you to participate
Potential fees if not successful
Benefits
More accurate forecasts
Improve fill rate and in stocks = better sales
Reduce Vendor and Retailer inventory levels
Reduced “fire drills” & premium freight; Competitive Edge
About MCOP - Sidney
87 years in the dated goods business
Keith Clark, AT-A-GLANCE, Mead, MeadWestvaco,MWV
Products
Brands
Customers
Commercial Inventory Management Program - late '80’s
VMR/VMI: ARIES model developed (Cornell University) in use 1990.
Commercial Market Inventory Management
Focus- dated goods sold to wholesalers and contract stationers
“Simplified, low tech” CPFR
MCOP Analysts work directly with major accounts
Annual meetings, weekly teleconferences
Focus on annual numbers, major ordering events, units
Sales Rep. administered program for smaller accounts
Stock Order Guides
Inventory Monitors
Overstock returns and transfers
CPFR
MeadWestvaco’s version of CPFR
Vendor creates the forecast. Identifying exceptions is a shared
responsibility.
Forecasts are for a full season and are not broken down by
week/month.
Forecasts are calculated and communicated in what we anticipate
the Retailer will sell, not what we will ship them.
Weekly conference calls are used to review sales trends, adjust
forecasts and deal with any “issues.”
Replenishment is done in various methods.
• Direct to store
• Ship to warehouse
• Cross-Docks
Measurements
The Retailers use many means to evaluate success of the program
Comp sales.
Gross Margin Dollars generated.
In Stock percentage - an extreme challenge in our category.
Lost Sales Dollars.
On time and Complete.
A Representative Time
Table
December – Marketing Generates a proposed Mix for Next year’s implementation
based upon current POS.
January – Proposed Mix is presented to retailers.
It includes display transition and
forecasted unit and dollar sales. A line review with the Retailer is completed for
current selling season.
April – Retailer communicates mix.
Vendor adjusts forecasts based on sku drop/adds.
Vendor and Retailer to review replenishment timeline and adjust forecasts based
upon finalized mix.
Time Table Continued
May/June – Initial shipments to Retailer for new products.
Retailer transitions displays
in store.
September – Vendor and Retailer review early POS and adjust forecasts based upon
trends.
October through December – Vendor ramps up shipments.
Vendor and Retailer
communicate shipping schedules and timelines. They also review in stock
percentages and any out of stocks.
December/January – Retailer incurs majority of sales.
Planning cycle begins again
with marketing review of current POS to determine mix for next year.
Other Initiatives have impact on
CPFR
Periodically Retailers have new programs or initiatives that have an
impact on CPFR
Change in method of shipment
Freight Collect programs
Sku Reduction
Merchandising Changes
Conclusion
Define and understand CPFR
Understand CPFR Goals, Costs and Benefits
Describe CPFR at MeadWestvaco Consumer & Office Products
(MCOP)