Collaborative planning, forecasting and replenishment (CPFR) – what is it?
Collaborative planning, forecasting and replenishment (CPFR) is a practice that involves collaboration between trading partners to jointly plan, forecast and manage inventory. The goal of CPFR is to increase operational efficiency, improve forecast accuracy and optimize inventory levels, leading to cost reductions and increased customer satisfaction.
Under CPFR, participants share information, market data and forecasts to better align production with actual market needs. The cooperation is based on trust and communication, which enables rapid response to changes in demand and minimizes the risk of over- or under-stocking.
CPFR implementation can lead to better synchronization of the supply chain, resulting in greater operational flexibility and allowing companies to manage resources more efficiently. This practice is particularly beneficial in industries with high demand volatility, such as retail, fashion and consumer electronics.
Frequently asked questions
1 What are the benefits of CPFR?
Benefits include better demand forecasting, reduced inventory and costs, and increased efficiency throughout the supply chain.
2) What are the challenges of CPFR?
Challenges include coordination between partners, information sharing, and trust and transparency in the collaboration process.
