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 ad