Intended learning outcomes: Produce an overview on collaborative planning, forecasting, and replenishment (CPFR). Describe vendor-managed inventory (VMI) and continuous replenishment planning (CRP). Identify planning & control tasks for a partnership relationship.
To fulfill the objectives of the collaboration, not only must planning & control systems be linked, but close contact among the participants is also key.
Collaborative planning, forecasting, and replenishment (CPFR) is a process whereby supply chain partners can jointly plan key supply chain activities from production and delivery of final products to end customers. Collaboration comprises business planning, forecasting, and all operations required to replenish raw materials and finished goods (cf. [ASCM22]).
A high degree of responsibility and powers of authorization for well-trained transcorporate teams are typical of functional supply chains. Such teams have a mutual understanding of problems with regard to quality, production processes, and delivery, and they strive toward continual improvement of order processing, following the idea of a learning organization. [note 206] Further measures include techniques of transcorporate data accessing and data revising:
- Vendor-managed inventory (VMI), or supplier-managed inventory (SMI): The supplier has access to the customer’s inventory data and is responsible for managing the inventory level required by the customer. This includes in-time inventory replenishment as well as removal of damaged or outdated goods. The vendor obtains a receipt for the restocked inventory and invoices accordingly. Cf. [ASCM22].
- Continuous replenishment (CRP): The supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales without stockouts and without receiving replenishment orders. Cf. [ASCM22].
An implementation of such procedures entails a lowering of associated costs and an improvement in speed and stock-inventory turnover.
The planning & control system for customer order processing is composed of the tasks shown in Figure 2.3.5.1. Systemic aspects and the systematic of planning & control within a supply chain will be examined in later sections. Here, we present the terms without further definition or commentary.
Fig. 2.3.5.1 Planning & control tasks for a partnership relationship.
Continuation in next subsection (2.3.5b).
Course section 2.3: Subsections and their intended learning outcomes
2.3 Designing a Strategic Partnership Relationship
Intended learning outcomes: Present target area strategies for intensive cooperation. Explain the Advanced Logistics Partnership (ALP) model with concepts such as building trust, working out collaborative processes in the supply chain, avoiding the bullwhip effect. Describe the virtual enterprise and other forms of coordination among companies.
2.3.1 Target Area Strategies for Intensive Cooperation
Intended learning outcomes: Produce an overview on the social competency of a company. Present target area strategies for an intensive cooperation in the partnership relationship, describe tasks and investment areas, and disclose possible supply chain risks entailed.
2.3.2 The Advanced Logistics Partnership (ALP) Model, a Framework for Implementation of Intensive Cooperation in the Supply Chain
Intended learning outcomes: Produce an overview on the ALP model: a framework for implementation of an intensive cooperation in the supply chain.
2.3.3 Top Management Level: Building Trust and Establishing Principal Relationships
Intended learning outcomes: Present trust-building measures in partnership relationships. Disclose the reasons for (1) creating the required conditions in your own company first, (2) – where possible – placing emphasis on local networks (local sourcing), and (3) not exploiting strengths in your company’s negotiating position.
2.3.4 Middle Management Level: Working Out Collaborative Processes in the Supply Chain
Intended learning outcomes: Present cooperative processes in the supply chain. Produce an overview on Collaborative processes in participative design/engineering. Describe contract issues for a partnership relationship.
2.3.5 Operational Management Level: Collaborative Planning, Forecasting, and Replenishment (CPFR)
Intended learning outcomes: Produce an overview on collaborative planning, forecasting, and replenishment (CPFR). Describe vendor-managed inventory (VMI) and continuous replenishment planning (CRP). Identify planning & control tasks for a partnership relationship.
2.3.5b Avoiding the Bullwhip Effect (Forrester Effect)
Intended learning outcomes: Explain the bullwhip effect. Identify the point of sale (POS) and the quick response program (QRP).
2.3.6 Managing a Strategic Partnership Relationship — A Practical Application
Intended learning outcomes: Present the ALP phases in the case of a high-tech Swiss machine tool manufacturer with a world market presence who wanted to introduce an intensive partnership relationship with suppliers of important assemblies.
2.3.7 The Virtual Enterprise and Other Forms of Coordination among Companies
Intended learning outcomes: Produce an overview on the virtual enterprise and underlying long-term network of potential partners. Present target area strategies for a virtual enterprise and disclose possible supply chain risks entailed. Describe some other forms of cooperation in relation to the virtual enterprise.
