Whatever happened to CPFR?
David McCarty
Strategic Advisor | CPG Strategy & RGM | Trade Promotion & Connected Planning (Anaplan/Pigment) | AI Prompt Engineering | CX & eCommerce SME
Earlier this week I had the privilege to spend some time at Anaplan's headquarters in San Francisco. While there, I got to spend some time with Kirby Bumpus who gave me about 4 hours’ worth of training and education on the Anaplan connected planning platform in a one hour meeting. Not sure what powers Kirby’s passion and enthusiasm, but if it could be identified and bottled, it would be a killer energy drink.
During one of his demos he pulled up a use case entitled “CPFR” …my jaw dropped.
For those unfamiliar with the term, back in the 90’s (which doesn’t feel as long ago as it was), there were big, collaborative CPG and retail initiatives to drive cost out of the value chain…initiatives like ECR (Efficient Consumer Response) and CPFR (Collaborative Planning, Forecasting and Replenishment). There were a lot of resources (time and money) put behind these efforts but it seemed that although the ideas were sound and the processes well defined, they didn’t take hold. By the mid-2000s, new buzzwords (e.g. “Demand Driven Replenishment”) took hold and it seemed as though the focus had moved on.
This is unfortunate as the need for CPFR still remains strong. Disconnected planning processes create inefficiencies within the enterprise and between trading partners within the ecosystem.
As Kirby and I dug into it the CPFR use cases and the capabilities of Anaplan, I realized that many of the challenges from the 90’s…data and process governance, forecasting model size and complexity, information security and ease of use have all been addressed with the Anaplan platform. With these constraints removed the promise of CPFR could be realized.
When I got home, I started wondering if maybe CPFR was more prevalent and that I had just lost touch with the details given my various roles over the past 10 to 15 years have been a step or two removed from supply chain planning. But a quick Google search didn’t turn much up…it really did seem like it was a concept that had been forgotten. I reached out to one of the sharpest people I know about Supply Chain, Steve Christiensen, to get his take. His point of view was that while the business need never faded, CPFR as defined never got the traction it deserved.
What have others seen in this area? Have parts of the defined CPFR process been implemented under other guises within S&OP or IBP? Given the technological advances over the past few years is it time for a CPFR Renaissance?
Principal Solutions Consultant at Anaplan
5yJust wanted to say thanks so much for the kind words, and love the article + the conversation you've started in here!!
Retail Supply Chain Planning Consultant | Author | Educator | System Integrator | Flowcasting Specialist
5yRichard Sherman, not sure how active you are on LinkedIn, but I remember the SCQ article you wrote a number of years ago called "Why Has CPFR Failed to Scale?" Thought you might be interested in this discussion.
Independent Industry Expert and Futurist
5yI remember in the late 90s creating scenarios and stories of the wonderful world of CPFR. Time for a 2nd round :-)
Vice President @ Shipium | Optimizing the way the world's best companies ship
5yacronyms aside, its a process that needs to be supported by integration, automation and an iterative/continuous approach to finding optimal outcomes ...easier said than done, but for those who get there fastest will grab the low hanging fruit.
Retail Planning Expert
5yDavid McCarty thank you for this article - timely and appropriate. I started my career at Target Stores in 1989 and CPFR was just taking off; and, it went way beyond CPFR right into vendor scorecards and lead time optimization for apparel. I see the research Jeff Harrop provided and would only offer this thought. The collaboration is only as good as the partnership between the retailer and the manufacturer / supplier. There was so much gaming going on back then - for instance, my forecasts would be combined with other retailer's forecasts and the supplier would still cut the overall forecasted need because they were looking at a more aggregate level and didn't want the risk of over-producing (this, by the way is the same problem for omni-channel and gave rise to the concept of stock protection). When it came time to allocate the product to retailers, we always ended up in some type of negotiation for the original forecasts we provided. Some vendors even forced me to buy different models because the foreign exchange rates for the original product I wanted was more favorable in other countries so there was no inventory for me to buy. With 30+ years behind me working with the retail supply chain, I feel CPFR is alive and well, but just not called CPFR anymore. As far as I'm concerned, Anaplan finally breathes life back into this idea with their connected planning idea. The only other way to get an integrated platform for all your applications is to buy point solutions and try to hook them all up. Even SAP (BPC), Hyperion, and Oracle, as great as they are, can't easily integrate all these planning applications like Anaplan. And since it's in the cloud, you can set it up to collaborate with the entire supply chain. By having all these applications hooked up in real time, it holds both the retailer and supplier accountable for their part of the process. I'm really glad you took the time to learn about Anaplan. We're going to see a big wave of implementations for supply chain and it wouldn't surprise me at all if CPFR makes a come back. As far as I'm concerned, your post may in fact be the beginning!