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CPFR & EDI
Presented To- Prof . Debasish Chakraborty GROUP - 1

MADHUMAY PANIGRAHI PGPLSCM/10-12/09 ASBM,Bhubaneswar
INTRODUCTION
"Supply Chain Process allows us to manage customer requirements quickly
It gives us visibility over customer forecasts resulting in improved service and cost reductions in the areas of production, inventory and shipping. We are able to quickly achieve our VMI goals and implement SCM with key clients with very different requirements. Synchronizing the supply chain from raw materials to the consumer offers the greatest opportunity to improve profitability and provide greater value to the consumer. It is quickly becoming the standard for competition. CPFR provides the process to link business plans and ensure synchronization.
CPFR(Collaborative Planning, Forecasting, and Replenishment)

It is a collaborative business practice that enables partners to have visibility into one another's demand, order forecast and promotional data to anticipate and satisfy future demand. This is done through a systematic process of information and knowledge sharing. CPFR links sales and marketing best practices, such as category management, to supply chain planning and execution processes. In this way product availability can be increased while reducing inventory, transportation and logistics costs. CPFR leverages existing investments in Warehouse Management Systems (WMS), Forecasting / APS systems, Enterprise Resource Management (ERP) systems, Materials Requirements Planning (MRP) systems, and Customer Relation Management systems.
ORIGIN(HISTROY)
J.D. Edwards offers unique functionality through its Supply Chain Management solutions to meet, enhance, and exceed capabilities outlined in the CPFR business model. CPFR was originally initiated in 1995 by Wal-Mart, Benchmarking Partners, SAP and Manugistics. The open source initiative was initially called CFAR (for Collaborative Forecasting and Replenishment, pronounced as See-Far).
Steps in CPFR. (Process)

Within Strategy & Planning, Collaboration Arrangement is the process of setting the business goals for the relationship, defining the scope of collaboration and assigning roles, responsibilities, checkpoints and escalation procedures. The Joint Business Plan then identifies the significant events that affect supply and demand in the planning period, such as promotions, inventory policy changes, store openings/closings, and product introductions.
Demand & Supply Management is broken into Sales Forecasting, which projects consumer demand at the point of sale, and Order Planning/Forecasting, which determines future product ordering and delivery requirements based upon the sales forecast, inventory positions, transit lead times, and other factors. Execution consists of Order Generation, which transitions forecasts to firm demand, and Order Fulfillment, the process of producing, shipping, delivering, and stocking products for consumer purchase. Analysis tasks include Exception Management, the active monitoring of planning and operations for out-of-bounds conditions, and Performance Assessment, the calculation of key metrics to evaluate the achievement of business goals, uncover trends or develop alternative strategies.
Phases of CPFR
Planning: This phase relates to people, processes, and developing of trust. Partners must break down cultural barriers and company-centric perceptions so they can view the bigger picture. Forecasting: CPFR solution begins with a collaborative forecast of end-user demand and continues through all aspects of supply chain planning, providing support for both long-term and day-to-day decisions. Executing: During the final CPFR phase, front-end planning and forecasting come together with supply chain execution.
Advantages and Disadvantages

Partner Relationships Facilitates flexible relationships Facilitates deeper collaboration through interdependencies, joint systems & processes Inventory Decrease in inventory levels and safety stocks Decrease in storage & financing costs Decrease in obsolescence Revenue Reduction in stock-outs and opportunity costs Promotion Efficiencies Sales increase from improved customer service Process Efficiencies Improvements in forecast accuracy Order Management Purchasing Inventory Control Production Labor
Transportation Management Strategic Rate Management Tactical Rate Management Less than Truckload (LTL) Consolidation Capacity Utilization Demurrage
Limitations of CPFR.(Disadvantages)
Applications might differ from industry to industry Difficult internal process changes (executive support etc) Technical issues (real-time systems integration and interoperability) Lack of partner trust Cost of implementation Benefits difficult to calculate Policy not to share internal corporate data such as forecast Top management-level commitment
The CPFR Reference Model

The CPFR Reference Model (figure) can be applied to many industries. A buyer and a seller, as collaboration participants, work together to satisfy the demands of an end customer, who is at the center of the model. (retail)
What is EDI?(Description)
Electronic Data Interchange (EDI) is the inter-corporate exchange of business information in a structured machine-readable form. EDI is designed to permit computers on both the sending and receiving end to communicate with one another without human intervention. definition contains 3 key concepts about EDI: Computer-to-computer: EDI in its most efficient form flows directly out of a sender s computer system directly into a receiver s computer system without any human intervention; however, it is not always possible for EDI to flow in this most efficient manner. Routing business data: EDI is used for routine business documents like Purchase Orders and Invoices. It is not used for non-routine business documents like complicated contracts or information meant for humans to read and analyze. Standard data formats: A standard definition of the location and structure of the data is provided. Unstructured text is not EDI.
The diagram above illustrates how much slower the conventional paper process than the EDI process. Additionally, the conventional paper process includes substantially more human intervention to move business information from one company to another. The conventional process requires someone to handle a printed computer generated form and mail it. Then, the recipient re-keys the data back into another computer for their internal processing. (It is estimated that 80% of the data that is keyed into computers is output from other computers!) The EDI process is a computer transmitting the information directly to another computer, eliminating the paperwork and human intervention.
EDI Standards
EDI standards are, in essence, agreements between users of EDI on how data is to be formatted and communicated between them. If corporations can t do business universally using EDI, then the technology will be useless. Today, X12 is the standard for North American EDI Usage. On the international front, EDIFACT is evolving as the key standard. Eventually, many believe, a merger between X12 and EDIFACT will create one common EDI international standard.
Why do we need EDI standards?

Many times two potential EDI trading partners will meet to discuss an electronic linkage between them and decide to use a simple file transfer to accomplish it. The reasons EDI was not used include: 1. The possibility of using EDI was not even considered. 2. They thought that EDI standards were too cumbersome and they did not fully understand published EDI standards. 3. The use of a file transfer is much simpler.
EDI Software
EDI software consists of code to translate information into and translate information out of the EDI standards agreed to between two trading partners. EDI software can also create bridges between applications. Just as EDI eliminates the need to rekey data between two trading partners, bridging software eliminates the need to rekey between applications within the same firm. For example, the data used from an incoming EDI purchase order could create the sales order as well as create an invoice automatically if the situation warranted it. Since bridge software is specific to each company, it is usually custom code.
EDI Hardware
In today s business environment, EDI is run on all levels of computers, including mainframes, minicomputers and PCs. In some cases, the PCs are put in front of the minis or mainframes to act as a preprocessor. In addition to the computer, EDI users must decide on the communications method to be used. Communications between users is performed by a modem. A modem is a device that converts computer signals to audio tones, which can be sent over telephone lines.
Advantages of EDI
Save Money End Repetition Save Time Improve Customer Service Expand Your Customer Base
Disadvantges of EDI
Too Many Standards Changing Standards EDI is Too Expensive Limit Your Trading Partners
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CPFR & EDI

Presented To- Prof . Debasish Chakraborty GROUP - 1

CPFR(Collaborative Planning, Forecasting, and Replenishment)

Steps in CPFR. (Process)

Advantages and Disadvantages

The CPFR Reference Model

Why do we need EDI standards?

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