• PLUS 

A New Model for Retailer-Supplier Collaboration

Leveraging a profound truth and the power of silence to improve collaboration and supply chain performance.

Subscriber: Log Out

Sorry, but your login has failed. Please recheck your login information and resubmit. If your subscription has expired, renew here.

This is an excerpt of the original article. It was written for the March-April 2024 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2024

Part of any supply chain manager’s job is risk mitigation. Thanks to COVID-19 and the ensuing, and constant, disruptions that have followed, more companies are now focused on reducing their exposure to supply chain chaos. We’ve heard a lot about diversification in recent years—having multiple suppliers in multiple locations. But risk mitigation goes far beyond diversification, and the recent case of Boeing should serve as a cautionary tale not to avoid those other risks.
Browse this issue archive.
Already a subscriber? Access full edition now.

Need Help?
Contact customer service
847-559-7581   More options
Not a subscriber? Start your magazine subscription.

The first CPFR pilot started in 1996 when Walmart collaborated with Warner-Lambert, focusing on the Listerine category of products. In conducting the pilot, Walmart and Warner-Lambert independently calculated the demand they expected for a period of six months into the future. They exchanged forecast numbers over the Internet, using special software. If the numbers were different, they used the link to exchange more data and eventually converged on a single forecast.

The pilot proved to be very successful, helping to confirm the potential promise of improved collaboration. Listerine sales went up, in-stocks were much higher, fill rates were at acceptable levels, and ecosystem inventories were reduced.

While this early pilot helped cement the benefits of collaboration, over the next several years and decades, CPFR failed to scale and realize its potential despite several success stories. This was largely because of two issues that plagued the approach.

First, in the model, both the retailer and the supplier were deriving an independent forecast of essentially supplier orders. That often resulted in a large discrepancy between each entity’s forecast. Then, as a result, considerable time and effort were required from both entities to reconcile the differences, reforecast, collaborate again, and eventually come to a consensus on a shared forecast of supplier orders.

This complete article is available to subscribers only. Log in now for full access or start your PLUS+ subscription for instant access.

SC
MR

Sorry, but your login has failed. Please recheck your login information and resubmit. If your subscription has expired, renew here.

From the March-April 2024 edition of Supply Chain Management Review.

March-April 2024

Part of any supply chain manager’s job is risk mitigation. Thanks to COVID-19 and the ensuing, and constant, disruptions that have followed, more companies are now focused on reducing their exposure to supply chain…
Browse this issue archive.
Access your online digital edition.
Download a PDF file of the March-April 2024 issue.

The first CPFR pilot started in 1996 when Walmart collaborated with Warner-Lambert, focusing on the Listerine category of products. In conducting the pilot, Walmart and Warner-Lambert independently calculated the demand they expected for a period of six months into the future. They exchanged forecast numbers over the Internet, using special software. If the numbers were different, they used the link to exchange more data and eventually converged on a single forecast.

The pilot proved to be very successful, helping to confirm the potential promise of improved collaboration. Listerine sales went up, in-stocks were much higher, fill rates were at acceptable levels, and ecosystem inventories were reduced.

While this early pilot helped cement the benefits of collaboration, over the next several years and decades, CPFR failed to scale and realize its potential despite several success stories. This was largely because of two issues that plagued the approach.

First, in the model, both the retailer and the supplier were deriving an independent forecast of essentially supplier orders. That often resulted in a large discrepancy between each entity’s forecast. Then, as a result, considerable time and effort were required from both entities to reconcile the differences, reforecast, collaborate again, and eventually come to a consensus on a shared forecast of supplier orders.

SC
MR

Latest Resources
Skills Report 2025: Supply chain and procurement trends
What are the biggest challenges facing supply chain and procurement leaders right now? Get the details in this just-released research brief.
Download

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release