A SCOR Model of Collaborative Planning, Forecasting and Replenishment (CPFR™) Michelle Lohse, Senior Management Consultant PRAGMATEK Consulting Group, Ltd. SCOR Users Seminar October 23-24, 2000 Hyatt Regency St. Louis St. Louis, Missouri

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A SCOR Model of Collaborative Planning,
Forecasting and Replenishment (CPFR) Michelle
Lohse, Senior Management ConsultantPRAGMATEK
Consulting Group, Ltd.SCOR Users
SeminarOctober 23-24, 2000Hyatt Regency St.
LouisSt. Louis, Missouri
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Presenter Bio - Michelle Lohse

• 10 Years at Honeywell / Alliant Techsystems as a
  Process Engineer and IT Systems Engineer
• 6 Years in Consulting and Consulting Management
  in the areas of Manufacturing, Sales/Marketing,
  Leasing, Telco and Internet Startup
• PRAGMATEK Consulting Group Ltd.
• ERP Impl., Technology Services, Mgmt Consulting
• Practitioner of SCOR Model
• Leadership in SCC Technical Community
• 20 SCOR Projects
• 80 Consultants
• Minneapolis, Rochester NY, Dallas/Ft. Worth

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SCOR Project Roadmap
Align Performance Levels, Practices, and Systems
Information and Work Flow

• AS IS Work/Information Map
• Disconnects
• Design Specifications
• TO BE Work/Information Map
• Prioritized List of Changes

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Overview

• Why CPFR?
• CPFR Results
• CPFR Steps
• SCOR to CPFR Map - Customer
• SCOR to CPFR Key Points
• References
• Questions?

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Why CPFR?

• Imation (DSIM) Supply Chain Investment Strategy
  Project sponsored by Brad Fitzgerald, Supply
  Chain Director
• One recommendation was implement the
  Collaborative Planning, Forecasting, and
  Replenishment (CPFR) Standard with key customers
  and suppliers
• Key issue was improving sales and profitability
  in the retail channel
• A key customer account was requesting
  collaboration
• CPFR is a business model that has the potential
  to grow sales and reduce inventory

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CPFR Results

• CPFR Performance Results
• Sales increases of 8 to 10
• In stock improvements 5 - 8
• Inventory reductions of 10
• Cost of goods sold reduction of 3 to 4
• Qualitative Results
• Enhanced trading partner relationship
• Improved order forecast accuracy
• Improved technology ROI
• Improved overall GMROI
• Increased end customer satisfaction

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CPFR Steps

• 1) Develop front-end agreement (annually)
• 2) Create joint business plan (semi-annually
  /quarterly)
• 3) Sales forecast collaboration (weekly)
• 4) Identify exceptions for sales forecast
• 5) Resolve / collaborate on exception items
• 6) Order forecast collaboration (weekly)
• 7) Identify exceptions for order forecast
• 8) Resolve / collaborate on exception items
• 9) Generate order (weekly)

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CPFR 1 Develop Front End Agmt
EP.1 Manage Business Rules
Planning Decision Policies
Service Requirements
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CPFR 2 Create Joint Business Plan
EP.3 Manage Plan Data Collection
Planning Data
Supply-Chain Execution Data
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CPFR 3, 4 5 - Sales Forecast
Step 3 Sales Forecast Collaboration Step 4
Identify Exceptions for Sales Forecast Step 5
Resolve / Collaborate on exception items
P1.1 Identify, Prioritize and Aggregate
Supply Chain Requirements
Collaborative Sales Forecast EP.9 Aggregate
Forecast, Projections and Business Assumptions
Aggregate Demand Plan (Sales Forecast)
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CPFR 6,78 Order Forecast
Step 6 Order Forecast Collaboration Step 7
Identify Exceptions for Order Forecast Step 8
Resolve / Collaborate on exception items
P1.4 Establish Supply-Chain Plans
Collaborative Order Forecast Aggregate Supply
Plan (Sales Forecast balanced with SC Resources)
Order Forecast
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CPFR 9 Generate Order
D1.2 Receive, Enter and Validate Order
Customer Order Automatic PO Generation (Frozen
Forecast)
Sales Order
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SCOR to CPFR Map - Customer
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SCOR to CPFR Key Points

• CPFR is a leading practice that can net results
  with or without technology investment on both the
  supplier and customer sides of your supply chain
• CPFR puts structure to trading partner
  relationships
• CPFR can increase the value of your SCOR
  projects with key customer accounts

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References

• Collaborative Planning, Forecasting and
  Replenishment Voluntary Guidelines - 1998
  Voluntary Interindustry Commerce Standards
• Roadmap to CPFR The case studies - 1999
  Voluntary Interindustry Commerce Standards
• CPFR website - www.cpfr.org
• VICS website - www.vics.org

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Questions?

• THANK YOU