A collaborative planning, forecasting and replenishment (CPFR) baseline survey conducted by GMA, the world’s largest association of food, beverage and consumer product companies, found that 67% of the association’s members are engaged in some form of CPFR activity.
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In total, 42 member companies participated in the survey, which was conducted near the end of 2001 by KJR Consulting, and 19% were found to be moving beyond pilot studies to implement CPFR with their trading partners.
CPFR initiatives use technology and a standard set of business processes for Internet-based collaborative forecasting and replenishment, with the ultimate goal of improving efficiencies across the supply chain, reducing inventory, improving service levels and increasing sales.
The study found that some companies were inhibited from adopting CPFR initiatives because of the costs involved, the lack of technology standards and hesitation to share information that might be seen by a competitor.
Other possible barriers to CPFR include quality of store-level and distribution center- level data and a need for more employee training.
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By GlobalDataWhile GMA member companies have taken a conservative approach to CPFR implementation, the study showed that pilot efforts are reaping some benefits. Among more experienced CPFR users, 67% report improvement in forecast accuracy, and 56% report a decrease in inventory.
Companies participating in the survey overwhelmingly cited improved forecast accuracy (86%) as the most anticipated benefit of CPFR, followed closely by increased sales and improved internal communications (each at 76%).
GMA member companies have created alliances with a variety of trading partners on CPFR initiatives, with 71% partnering with mass merchandisers, 35% collaborating with grocery retailers and 12% teaming up with chain drug stores. One reason for the high amount of collaboration with mass merchandisers could be that some mass merchandisers are offering training and providing software to ensure its manufacturer partners have the ability to perform CPFR.
“CPFR fosters true trading partner collaboration and is increasingly being viewed as a critical business tool for manufacturers and their customers,” said GMA president & CEO C. Manly Molpus. “GMA members implementing CPFR initiatives continue to see better internal and external communications and increased profit growth.”
