CPFR Roadmap

You will probably do several collaborative planning, forecasting, and

replenishment (CPFR) pilots with different objectives–early implementations
emphasizing organization, later ones exploring collaboration. Companies may
want to jump into CPFR pilots by following only parts of the map, depending
3.0
on their starting point. The learning curve is steep, and change is an effort–

Roadmap to CPFR
but knowledge gained is significant. Piloting adapts to a company’s scale,
and the VICS CPFR Roadmap takes you there.

Introduction

You’ve read the VICS CPFR Guidelines. You have circulated it among colleagues
and executives. You’ve attended conferences and have identified potential
partners–and skeptics. So what steps do you take to implement CPFR and
demonstrate how it can increase sales and reduce costs?

Many organizations would like to implement collaborative planning, forecasting,

and replenishment (CPFR). Piloting can help organizations understand the
benefits of CPFR, document changes required for the further expansion, and
develop strategies for overcoming obstacles. This section is designed to help
companies answer the question, “How do I get started?”

The VICS CPFR Guidelines identified the processes that comprise CPFR, from
the creation of a Front-End Agreement through Business Planning, Forecasting,
and Replenishment. This VICS CPFR Roadmap is not meant to replace that work.
Instead, it supplements it with basic steps that help you get started with CPFR,
test it with a trading partner, and develop rollout plans.

This VICS CPFR Roadmap is a path from awareness of CPFR opportunities to

making implementation plans. Based on the CPFR process model in the
VICS CPFR Guidelines, it aligns you and your trading partner to common
objectives, and guides you together through forecast exchange, exception
management, and the review of performance results. Both partners gain

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 a clear understanding of the potential for rolling out CPFR practices throughout
their organizations.

The VICS CPFR Roadmap is divided into five steps:

• Step 1: Evaluate Your Current State
• Step 2: Define Scope and Objectives
• Step 3: Prepare for Collaboration
• Step 4: Execute
• Step 5: Assess Results and Identify Improvements

3.0 Roadmap to CPFR The VICS CPFR Roadmap provides ready-to-use templates that can be customized
for different partnerships. The Roadmap also provides a checklist for each step to
ensure all critical items have been completed.
Step

1 Evaluate Your Current State

CPFR begins long before piloting, with an assessment of your company’s needs,
values, culture, strategies, trading partner relationships, and track record in
implementing best practices. This step looks for areas where change is needed
to implement CPFR successfully. Only after this step is done will your company
be prepared to articulate a meaningful vision for CPFR. In addition, the senior
leadership of your company must not only understand the concept of CPFR,
but also openly offer their support.

Put CPFR into your company’s terms in order to gain commitment

CPFR can provide both demand and supply benefits. Mapping these potential
benefits to your company’s priorities will assist in cross-functional buy-in.

CPFR Benefits: Demand

Enhanced Relationship
Implicitly, CPFR strengthens an existing relationship and substantially accelerates
the growth of a new one. Buyer and seller work hand-in-hand from inception
through fruition on business plan, base, and promotional forecasts. Continual
CPFR meetings strengthen this relationship.

6 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
Greater Sales
The close collaboration needed for CPFR implementation drives the planning
for an improved business plan between buyer and seller. The strategic business
advantage directly translates to increased category sales.

Category Management
3.0
Before beginning CPFR, both parties inspect shelf positioning and exposure

Roadmap to CPFR
for targeted SKUs to ensure adequate days of supply, and proper exposure to the
consumer. This scrutiny will result in improved shelf positioning and facings
through sound category management.

Improved Product Offering

Before CPFR implementation, the buyer and seller collaborate on a mutual
product scheme that includes SKU evaluation and additional product opportunities.

CPFR Benefits: Supply

Improved Order Forecast Accuracy

CPFR enables a time-phased order forecast that provides additional information,
greater lead time for production planning, and improved forecast accuracy vs.
either stand-alone VMI/CRP or other industry tools.

Inventory Reductions
CPFR helps reduce forecast uncertainty and process inefficiencies. How much
inventory does your company hold to “cover up” for forecasting errors or a
trading partner’s inability to have the product available in a timely manner?
With CPFR, product can be produced to actual order instead of storing inventory
based on forecast.

Improved Technology ROI

Through the CPFR process, technology investments for internal integration can
be enabled with higher quality forecast information. Your company will benefit
by driving internal processes with common, high-quality data.

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 Improved Overall ROI
As other processes improve, the return on investment from CPFR can be
substantial.

Increased Customer Satisfaction

With fewer out-of-stocks resulting from better planning information, higher store
service levels will prevail, offering greater consumer satisfaction.

Where does your company stand today?

3.0 Roadmap to CPFR
Consider these questions to learn if your company is ready for CPFR:

Does your company have a culture that values cooperation and communication
between its departments and with its trading partners?
For a CPFR partnership to succeed, there must be a commitment to work with
and share information between functional areas and between trading partners.
Many companies recognize room for improvement here, but both recognizing
it and committing to make progress is an overwhelming indicator of the future
success of both CPFR and other business partnerships. Information sharing
brings strength that technology alone cannot provide.

Has your company implemented other industry best practices?

Companies that have adopted industry best practices, such as standard product
identification (UPC or EAN-13), Electronic Data Interchange (EDI), and the
basic principles of Quick Response or Efficient Consumer Response already
understand both their implications and benefits. Companies that have designed
a VMI or CRP group have also gained valuable learning applicable to CPFR.

Is using information technology to solve business challenges a company priority?

CPFR has been piloted with relatively little technology assistance. However,
once a pilot proves a business case, implementing CPFR on a broader scale may
become more effective when technology is applied. CPFR sponsorship by senior
management becomes particularly important at this point, as CPFR may be
viewed as competition for IT resources. Given proven results, however, it will
become evident that CPFR complements IT priorities.

8 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
The Internet offers an opportunity to improve both internal and external
business communications. Whether using the Internet simply as a vehicle to
expedite shared information or to use software, CPFR is a prime example of how
Internet technology can be used to enhance business-to-business relationships.

Develop Your Company’s CPFR Vision

3.0
Before implementation, your company needs a CPFR vision statement. CPFR is

Roadmap to CPFR
a business process that gives continuity to the strategies and tactics of category
management, integrating your company goals throughout the supply chain.
A well thought out vision answers these questions:

• What are your company’s objectives for CPFR?

• What areas of the organization will be impacted, and how?
• How will success be measured?
• What will be the scope of the project?
• Which product lines will be included?
• How many stores and DC’s will be included?
• How many trading partners will you bring on board in order
to have a significant impact?
• What is the level of technical sophistication of your company
and your trading partners?
• What is the long-term market position of your trading partners?
• What corporate stance will you develop for press releases?
• How will you document the vision?

Are Your Trading Partners Ready for CPFR?

Consider these factors when reviewing potential partners for a CPFR relationship:

Can your trading partner relationships be characterized as open and trusting?

A trusting and open relationship enhances the benefits of CPFR through the
sharing of sensitive information.

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 Do you and your trading partner have complementary strengths and weaknesses?
Think of what each partner can bring to the CPFR initiative. For example,
one may be strong technologically, providing the majority of the technology
infrastructure. The other may be strong in market and consumer knowledge,
and through the CPFR relationship be able to provide this strength. Be cautious
not to assume that your largest trading partner is the most likely candidate.

Does your trading partner have the appropriate commitment and resources required
to make CPFR successful?
3.0 Roadmap to CPFR Without a strong commitment to CPFR, its potential will not be realized.

Does your trading partner have experience with CPFR with another partner?
Build on learning. Even though development time may be greatly reduced by
leveraging the learning already gained through your partner’s previous efforts,
the template for each new partnership will probably be different.

Can your trading partner quantify the potential internal and external benefits?
CPFR requires a paradigm shift from an adversarial stance to a win-win
relationship, as well as the working together by departments that may have never
communicated directly or effectively in the past.

Develop a Business Case to take to your Partners

The Capability Assessment, in Appendix A, helps answer these questions, and

helps the partners recognize their current state and where they need to change
to implement a CPFR partnership successfully.

Pilot experience has already been brought to bear:

• The most productive deployment method was to have the seller team
members reach consensus on the scores separately from the buyer team
members.
• Once each company reached its consensus on the individual scores, the two
companies reviewed each CPFR assessment element together to agree on the

10 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
 score. Primary differences were documented along with the rationale for the
score in each area. The additional scoring rationale provided critical input
to improve the process for each element.
• When averaged and viewed in the overall context of the scoring grid, the raw
scores identified the relative strength of each of the four CPFR process areas.
• The overall information enabled the partners to set priorities for which CPFR 3.0

Roadmap to CPFR
processes to improve.
• At the detailed level, the individual scores and comments provided the
information to identify specific actions needed to improve the score on the
particular element.

This assessment process is a method to identify areas that need immediate

attention or that could be sequenced later in CPFR process improvement.
The key to this assessment process is understanding two critical aspects of CPFR:

1. All four process areas identified in the assessment must be maximized

to fully realize the benefits of CPFR.
2. Partnering companies have the flexibility to decide the priority
in which key CPFR processes will be worked on and improved.
Step

2 Define Scope and Objectives

After you create a CPFR Vision, you are ready to begin piloting. Step 2 requires:
1. Gaining commitment from your trading partner.
2. Assigning team members and establishing their roles.
3. Selecting products and locations that will be included in the process.
4. Deciding which part(s) of the nine-step CPFR process to test.
5. Establishing key performance metrics to measure the initiative’s success.

This is truly the implementation of the CPFR Front-End Agreement as designed

in the VICS CPFR Guidelines.

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 Preparations

The project begins by engaging at least one agreeable trading partner. To keep
the pilot manageable, no more than five trading partners should be involved.

Template Team Members, Roles, and Responsibilities

• Each trading partner identifies a management-level sponsor. The sponsors

select team members, ensure commitment to the project, and review results.
• The management sponsors for each company identify a team of three

3.0 Roadmap to CPFR or more individuals who can participate in the initiative at least 10 hours
each week. One team member from each side is assigned to each of these
three areas:

Team Members, Roles and Responsibilities

Role Responsibilities Typical Typical

Position Buyer Position Seller

Sales The sales collaboration team Category , Sales

Collaboration is responsible for establishing Manager Representative
sales forecasts, promotion plans, Buyer, (Account
collecting and reporting sales Replenishment Relationship
results. The team is also Analyst Owner)
responsible for recommending
and implementing changes to
the replenishment system.

Replenishment The replenishment team Inventory Customer Service

determines the order forecast, Analyst Manager,
and collects actual order and (Re-) Buyer Forecast
inventory information. Analyst, Order
Management
Analyst

Collaboration The collaboration technology IT Coordinator, IT Coordinator,

Technology team sets up the collaboration Project Manager, Project Manager,
environment, monitors Systems Systems Manager
technology effectiveness, and Manager
evaluates technical rollout
requirements.

Table 1

12 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
 • The management sponsors may also include an external project facilitator
(systems integrator, software vendor, or network services provider)
whose prior experience can help guide the project team.
• The management sponsors select a team captain for daily management
of the project.
3.0
Project Kickoff

Roadmap to CPFR
Once the project sponsors identify team members and roles, the project is
formally initiated with a kickoff meeting.

Template Kickoff Meeting

All team members, including sponsors and affected department liaisons attend
a one-day kickoff meeting.

Agenda
1. Introduce the team.
2. Create the pilot project overview, including performance metrics.
3. Begin joint scope-setting (see template).
4. Begin joint objective-setting (see template).
5. Set future meeting dates, times, and locations.

A CPFR pilot project is designed to give trading partners a sense of the real
impact of CPFR on their organizations by participating in a rapid test. Though it
is limited in scope, a pilot project includes the complete cycle of CPFR planning,
collaboration, and review. It should also investigate information technology that
can automate the process, in preparation for wide-scale future collaboration.

Give all team members the VICS CPFR Guidelines and the VICS CPFR Roadmap. If a
software package is used, distribute the user documentation. IT team members
should also receive software package administration and integration documentation.
(Detailed training sessions on CPFR practices and associated software are held in
the second phase of the project.)

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 During the scope- and objective-setting sections of the meeting, discuss adjustments
to the basic pilot implementation approach that the team would like to consider,
and document them carefully.

Schedule a one-day CPFR/collaboration technology training session for all team

members (except sponsors) within two weeks of the kickoff meeting.

All team members attend recap meetings at the conclusion of project steps 2, 3,
and 4. These meetings should be in-person, though they may also be conducted

3.0 Roadmap to CPFR as conference calls.

Finalizing Scope and Objectives

If additional work is required after the kickoff meeting to finalize scope and
objectives, the sales and replenishment collaboration members work informally
within their organizations to come to a conclusion. Templates offer guidelines
for a pilot project.

Template Project Scope-Setting

• Limit the initial phase pilot by using only one product category (between
10 to 50 SKUs) and possibly by limiting the number of distribution centers
involved. If store-level forecasting is used, the project should involve fewer
than 50 stores.
• Determine which CPFR processes will be piloted. Starting with the
Front-End Agreement, decide how far into the nine-step process to proceed.
For example, some companies test CPFR through the Sales Forecasting
Collaboration before proceeding on to Order Forecasting Collaboration.
• Determine which trading partner will take responsibility for the creation
of the sales forecast, the order forecast, and generation of the actual order.
Since this is probably already established in your relationship, discuss the
reasons as they relate to the strengths, systems, and resources of each
company. Before making this decision, discover which trading partner
has the best data and technology or software that could be used to increase

14 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
 forecast quality. This is critical, since a high-quality forecast on the front end
greatly reduces the amount future exception communication.
• Identify a process for determining both sales and in-stock inventory positions
for each SKUs/location(s) that will be included in the project.
(This information can be collected and entered from other systems,
or manually, if necessary.) Capture baseline data in order to determine 3.0

Roadmap to CPFR
if you have met your objectives.
• Identify where the best forecast data resides and how it can be used
for the project. Use SKUs where historical data is available.

Template Objective-Setting

Set performance metrics. The project should focus on increasing forecast and
planning accuracy, reducing both safety stock requirements and out-of-stock
conditions. The team sets targets for these measures relative to performance
in the same period a year earlier (or some other comparable period).
Here is a sample set of objectives:

• 15% increase in forecast accuracy (from 60% to 75%)

• 10% reduction in supply chain inventory (from 2000 cases to 1800 cases)
• 3-5% increase in retail in-stock position (from 90% in-stock to 94%)

When setting objectives, consider how the data will be collected. One common
example is total supply chain inventory. Often, manufacturers do not tally
inventory by customer, so assessing total supply chain inventory may be difficult.
Don’t be discouraged. Work with what you have. In this example, a manufacturer
may be able to provide good estimates on inventory by analyzing how its total
inventory for each item is affected.

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 Step 2 Closure Checklist

Before beginning Step 3, the team captain verifies the status and reports it
to the project sponsors:

✔ All team members have been assigned, and time has been allocated
for team member participation throughout the project.
✔ Products and locations for collaboration have been identified,
and associated personnel have been notified.
✔ Metrics such as forecast accuracy, inventory reduction,
3.0 Roadmap to CPFR and out-of-stock targets have been established.
✔ Sources of forecast data have been identified.
✔ CPFR training session and future project team meetings
have been scheduled.
Step

3 Prepare for Collaboration

In Step 3, the project team studies the details of the CPFR business process, and
identifies the technology and additional resources required to support it. Sales
and replenishment team members develop ground rules for managing exceptions
and changes. Collaboration technology team members install and configure the
information systems (purchased, developed, or simple spreadsheets and e-mails)
used to support collaboration between partner pilot teams. At the end of this
step, collaboration is ready to begin.

Process and Technology

Step 3 starts with a training session for the team, so team members can begin
working with CPFR processes and technology.

Template Collaboration Training Session

All team members except sponsors participate in day-long collaboration training.

• The first session reviews the CPFR process model and Front-End Agreement,
concluding with a case study.

16 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
 • The second session trains team members how to use the selected technology
to review exceptions, revise forecasts, and monitor scorecard measures.
• Training concludes with an on-line simulation of a trading scenario,
using the selected technology to interact.
• Collaboration Technology Team members take an additional day of training
on technology administration and integration. 3.0

Roadmap to CPFR
Configuration

Once the sales and replenishment collaboration team members are trained,
they begin to prepare their forecasts and exception thresholds. Meanwhile,
collaboration technology team members set up collaboration technology and
integration interfaces.

Template Sales Forecasting Preparation

• The sales collaboration team creates an initial sales forecast for weeks 9-14
of the project. The number of weeks in the forecast can be extended to
align with the next fiscal period.

• Create a sales forecast at the SKU level in normal buckets (such as weekly),
aggregated to the buyer distribution center level or other appropriate
customer ship point (for example, by store, if Direct Store Delivery is being used).

• Specify promotional forecasts (promotions with effective dates, projected

prices and volume impacts) independently of the base demand forecast
values. Seasonal uplift may be combined with base demand for simplicity.
The accuracy of promotional forecast can be greatly enhanced through the
use of high-quality lift tables that incorporate historical demand data and
related causal information.

• Set exception thresholds…for example thresholds could be at 5% change

in base demand, 15% change in promotional demand.

• Share the sales forecast among trading partners. Exceptions are triggered
based upon changes to this forecast, regardless of who makes them.

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 Template Order Forecasting Preparation

• Give replenishment team members early access to promotional plans

to develop the order forecast.
• Set the order forecast to the level of detail that you are going to replenish
(such as SKU level, weekly, by customer distribution center).
• Either the seller or buyer creates an initial order forecast covering the weeks
of sales planned in the sales forecast and incorporating the seller’s order
requirements (such as minimum order quantities). For example, if the
3.0 Roadmap to CPFR purchase-order-to-store replenishment cycle time is one week, and the sales
forecast is for weeks 9-14 of the project, then the order forecast should be
for weeks 8-13. Additional weeks can be added to support inventory builds
and other logistics to support the sales plan.
• Set exception thresholds. For example thresholds could be at 5% change
in base demand, 15% change in promotional demand.
• Share the order forecast among trading partners. Exceptions are triggered
based upon changes to this forecast, regardless of who makes them.

Template Collaboration Technology Configuration

Each company sets aside server systems for the project or can subscribe to a CPFR
service provider.

• IT staff or software vendor personnel install collaboration software on-site,

or activate the service provider.
• Each company provides extracts of product and location data to be used in
the project. These products and locations remain fixed through the project
life cycle, to simplify master data maintenance and integration interfaces
for the pilot.
• IT personnel (or business partners) load the product and location data
into the collaboration software.
• Each company provides a format for forecast data to be loaded.
IT, consulting, or software vendor personnel develop scripts to load
and update this data.

18 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
To complete Step 3, team members should meet to review their readiness for
on-line collaboration. By the meeting date, the team should have agreed upon
an initial forecast for the collaboration period, and the collaboration software
should be up and running with the required products, locations, and initial
forecast values entered.
3.0
Template Pre-Pilot Meeting

Roadmap to CPFR
All project team members, including sponsors, participate in a pre-pilot meeting.

Agenda
1. Review initial sales forecasts, including planned promotions.
2. Review initial order forecasts.
3. Discuss logistics issues (such as carrier arrangements) that could affect the plans.
4. Review the status of collaboration technology; demonstrate technology with project
products and locations configured.

Step 3 Closure Checklist

Before beginning Step 4, the team captain verifies the status and reports it to the
project sponsors:

✔ All team members have been trained.

✔ Initial sales and order forecasts for all product/location combinations
have been agreed upon.
Collaboration technology is ready to begin.
Step

4 Execute: Performing the Pilot

In Step 4, the sales and replenishment collaboration teams begin to exchange
forecasts with each other, modifying them to respond to changing conditions.
The collaboration technology team gains experience managing the environment,
and prepares for rollout to a large number of locations and projects after the
pilot is complete.

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 The Collaboration Process

Sales and order forecast collaboration follow specific ground rules to secure
benefits.

Template Forecast Collaboration

• Determine the rules for changing forecasts.

• The partners exchange new or revised forecasts at least weekly.
• The buyer enters the latest sales results for each product weekly.

3.0 Roadmap to CPFR • A partner who disagrees with a proposed forecasted value counter-proposes
a change, along with comments. Counter-proposals are made within five
business days. If a partner does not receive a counter-proposal within that
time, the proposal is accepted.
• The order forecast owner is the final arbiter of forecast values. After rounds
of three changes, only the order forecast owner can change a forecast.

Technology Rollout Planning

Consideration of technology rollout begins now, although details of the rollout

steps themselves are part of Step 5.

The collaboration technology team uses the pilot experience to understand

the IT requirements for a larger-scale rollout of forecast collaboration practices,
including electronic commerce, security, and application integration issues,
as well as staffing, training, backup/recovery, and support procedures. A clear
technology rollout plan produced during this phase of the project can greatly
accelerate future results.

Template Collaboration Technology Rollout Planning

Each organization develops its own plans for technology rollout.

• Assess prospective trading partners’ electronic commerce capabilities.

How many will use EDI? How many will have their own CPFR server?
How many will be client users only?

20 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
 • Determine which other application data feeds will be required to maintain
up-to-date product, location, and partner master data. Evaluate the level of
effort required to integrate these sources with the collaboration software.
• Determine which applications require or provide forecast information for
the range of products and locations to be covered in a general rollout.
Evaluate the level of effort required to integrate these sources to the 3.0

Roadmap to CPFR
collaboration software for import/export.
• Configure the corporate firewall and web servers to allow secure access
by CPFR trading partners.
• Identify the number of core users (planners), occasional users (management,
warehouse personnel, sales people), support personnel, and administrators.
• Estimate training requirements for the proposed user base.
• Develop a technology rollout timeline, including procurement, installation,
integration, training, and mobilization of support resources.

Collaboration Review

After about four weeks of collaboration, the project team meets to discuss
progress, problems, and changes. The team then takes an additional two weeks
of collaboration to determine whether adjustments have an impact.

Template Collaboration Review Meeting

All project team members, including sponsors, participate in the collaboration

review.

Agenda

1. Discuss major exceptions encountered in the first four weeks of collaboration.

2. Evaluate the effectiveness of response to changes.
3. Propose process enhancements.
4. Adjust objectives and collaboration ground rules.

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 Step 4 Closure Checklist

✔ The project team has participated in at least six weeks of on-line sales
and order forecast collaboration.
✔ The initial results and participant comments have been summarized
and reviewed by both trading partners.
✔ The project team has identified future technology and software
modifications that will enhance the process.
✔ The project team has held a collaboration review meeting, applying ideas

3.0 Roadmap to CPFR from the first four weeks to improving the process in the final two weeks.
✔ Results have been reviewed with the Project Sponsor.

Assess Performance
Step

5 and Identify Next Steps

In Step 5, the team and its management review its progress, report results to their
respective organizations, and make preparations for broader CPFR rollout.

Partnership Review

Every six to 12 weeks of collaboration, the business team reviews actual results
against the target metrics. The team also considers the business process impact
of their partnership.

Template Collaboration Scorecard

Evaluate the actual results against metrics that were agreed upon in the
Joint Planning Meeting and against data available from previous periods.

• Compare weekly SKU/store level sales forecast accuracy with the

year-ago period, and note changes.
• Compare weekly SKU/DC-level order forecast accuracy with results
for the year-ago period, and note changes.

22 R o a d m a p t o C P F R : T h e C a s e S t u d i e s
 • Compare total in-stock inventory at distribution centers and stores per
product with that for the year-ago period. Adjust for changes in the number
of products and stores, and note whether the balance of inventory has shifted
up or down the supply chain.
• Compare the number of store-level out-of-stock events with those for the
year-ago period. Calculate relative to the in-stock percentage per SKU. 3.0

Roadmap to CPFR
• Identify the number of exceptions and their root cause.
• Add any other measures that seem significant after the collaboration period.
Has there been significant sales growth in the category? Were there special
external conditions (weather, new competitors, product changeovers,
promotional merchandise, store openings/closings, staff changes) that
affected results? How can these factors be accounted for in the future?

For a sample copy of the pilot team scorecard, see Appendix F.

Template Business Process Review

• Review cases in which a business process or forecast changed dramatically.

What caused the change? Did the CPFR process reduce problems associated
with the change? Were there specific benefits over past ways of doing
business?
• Based upon the pattern of changes that occurred, what future opportunities
are revealed?
• Can purchase orders be eliminated, and collaborative forecasts be used
to trigger replenishment (actual orders) instead?
• Were any organizational problems identified?

Template Collaboration Technology Review

• Assess the contribution of CPFR technology to achieving project objectives.

• Highlight new opportunities the technology has uncovered, as well as any
issues or concerns.
• Present the collaboration technology rollout plan to other team members.
Incorporate their feedback.

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 Determining Next Steps

Before making a final report, team sponsors discuss what next steps they will
recommend to their respective organizations about continued collaboration.
Future initiatives between the implementation partners are determined jointly.

Team members from each organization also consider the next steps to take
relative to their own trading partner networks after the initial phase reviews are
completed. What additional partners should be included? Which product lines
should be added? Training requirements, organizational changes, project costs,
3.0 Roadmap to CPFR
and rollout time frames should all be estimated.

After a successful pilot, there are a number of ways to expand CPFR, and
numerous areas you would want to test and learn about:

Expanding CPFR

Add
Trading Automate
Partners the Process

Increase Successful
Level of CPFR Add
Detail SKU’s
Implementation

Expand to Integrate
Other CPFR the Results
Processes

Figure 1

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1. Expand to other CPFR processes
If the CPFR implementation focused on joint business planning and sales
forecasting, expand to order forecasting collaboration

2. Add SKUs
If the CPFR implementations initially focused on a limited set of items,
3.0
increase the gains by expanding to other product categories

Roadmap to CPFR
3. Increase the level of detail
If the implementation focused on warehouse-level information,
better results can be achieved by moving to store-level information.

4. Automate the process

Although few of the companies that have initiated CPFR have had to add human
resources to complete their implementation, automating the collaboration
process will produce increased gains. The vision of CPFR is one of managing
forecasts by exception, which can best be achieved through an automated
process–especially when the number of products and trading partners increases.

5. Add trading partners

The benefits gained from collaborating with one or a small number of trading
partners can be extended to more trading partners, depending on the relationship
with, culture, and capabilities of each partner. Even before a “critical mass” is
achieved, there are benefits to each relationship.

6. Integrate the results

The benefits of CPFR are fully realized only when the outputs of the collaborative
processes are integrated with the internal processes at both companies. For a
seller or supplier, this means using the collaborative forecast in the production
planning, capacity planning, and materials requirements planning processes,
as well as financial planning processes. For the buyer or retailer, this means
integrating the collaborative forecast into buying, merchandising, replenishment,
and financial planning processes.

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 Reporting Results

The project team should publish a joint project report that allows others in each
partner organization to understand the impact and potential for collaboration.
The initial CPFR experience contributes greatly to a successful general rollout.

Template Project Report

A project report has six major sections:

1. Executive Summary

3.0 Roadmap to CPFR 2. Project Scope, Objectives, and Resources

3. Business Process Results
4. Collaboration Technology Results
5. Next Steps
6. Organization-Specific Plans

• Executive Summary provides a high-level overview of the project.

• Project scope, Objectives, and Resources discusses the original conditions and
changes that were made as a result of the initial CPFR experience.
• Business Process Results reports results against key metrics.
• Collaboration Technology Results describes how information technology
supported the project’s objectives.
• Next Steps suggests future collaborations between the partners,
including the business and technology rollout plans.
• Organization-Specific Plans are private to each organization’s version
of the report. They can include proposals to expand collaboration
to other trading partners, projected costs, organizational impact,
and preliminary project plans.

The team captain creates a summary presentation to supplement the

project report.

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Project Completion Checklist

✔ The project team held a collaboration review meeting.

✔ The project sponsors agreed upon next steps, and developed
organization-specific deployment plans for additional collaboration initiatives.
✔ The project report for the current review was written and distributed to
3.0
others within the organization.

Roadmap to CPFR
✔ Senior Management has been informed of the results and has contributed
to the recommendations for expansion.

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3.0 Roadmap to CPFR

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