Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

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.

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 This includes in-time inventory replenishment as well as removal of damaged or outdated goods.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 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.        Planning & control tasks for a partnership relationship.

Continuation in next subsection (2.3.5b).

Course section 2.3: Subsections and their intended learning outcomes

  • 2.3.7 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.