"Collaborative Planning, Forecasting and Replenishment (CPFR)"
Definition: Collaborative Planning, Forecasting and Replenishment (CPFR) coordinates customer demand information with suppliers to reduce inventory and improve product availability. It requires suppliers and retailers to share sales and promotion forecasts at the item level over a defined time period. Also Known As: Efficient Consumer Response (ECR), Vendor Managed Inventory (VMI) Examples: A confectionary manufacturer forecasts sales of a certain candy bar at 50,000 cases over the next three months and adjusts its production plan to meet this need. One if its customers, a large convenience store operator plans to offer a special promotion for that candy bar, increasing demand by 30%. The manufacturer, unprepared, is not able to meet the demand. This causes a lost sales opportunity for the store operator. Had both the manufacturer and the store operator shared information, this would not have occurred.
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