CPFR

nullIntroduction to Collaborative Planning Forecasting and Replenishment (CPFR) November 3, 2000 Bob Cowdrick Manager of Business Consulting Logility Inc. Bcowdrick@logility.com Introduction to Collaborative Planning Forecasting and Replenishment (CPFR) November 3, 2000 Bob Cowdrick Manager of Business Consulting Logility Inc. Bcowdrick@logility.com AgendaAgendaIntroductions Logility Overview What is CPFR Software Demonstration Demand Planning XPS (eXtensible Planning Solution) Case Study Summary AdjournLogility Mission StatementLogility Mission StatementTo enable the optimization of our Customer’s Value Chain by providing solutions that collaboratively integrate their business processes with their Trading PartnersnullLeader: Business-to-Business Collaborative e-Commerce Solutions via the Internet with over 400 customers Innovator: Winner Information Week Outstanding e-Commerce Application using Internet Visionary: First Internet-based B2B Collaborative solution deployed in 1996 Public: Traded on NASDAQ under LGTY Logility Overviewnull “Logility’s strengths include breadth of product suite, ease of use of products (intuitive GUI), demand planning capabilities, rapid implementation focus, internet product -- not just vision.” Gartner Group “Logility is pioneering a direction the industry is sure to follow by providing collaborative planning solutions that balance production and supply constraints with demand opportunities.” AMR ResearchAnalysts’ Opinions of LogilityBlue Chip CustomersBlue Chip CustomersnullnullHistoric DemandForecastB2B Collaborative Commerce SolutionsnullHistoric DemandForecastCollaboration: Lite Users Sales Reps World-Wide Intranet-BasedB2B Collaborative Commerce SolutionsnullHistoric DemandForecastPromotional Data Advertising Calculate LiftB2B Collaborative Commerce SolutionsCollaboration: Lite Users Sales Reps World-Wide Intranet-BasednullHistoric DemandForecastTime-Phased Inventory PlanInventory Rules: Service Levels Safety Stock Inventory Turns Order QuantityPromotional Data Advertising Calculate LiftB2B Collaborative Commerce SolutionsnullHistoric DemandForecastTime-Phased Inventory PlanOn-Hand Inventory, Expected Receipts, Customer OrdersSupply Chain NetworkTransfer Orders, Manufacturing Orders, or Purchase OrdersPromotional Data Advertising Calculate LiftB2B Collaborative Commerce SolutionsnullForecastTime-Phased Inventory PlanPlanned Orders Inventory Rules: Service Levels Inventory TurnsHistoric Demand From Legacy Orders Trading PartnersPromotional Data Advertising Calculate LiftB2B Collaborative Commerce SolutionsnullHistoric DemandForecastTime-Phased Inventory PlanConstrain Supply OrdersTransfer Orders, Manufacturing Orders, or Purchase OrdersPromotional Data Advertising Calculate LiftInventory Rules: Service Levels Inventory TurnsOn-Hand Inventory, Expected Receipts, Customer OrdersB2B Collaborative Commerce SolutionsnullHistoric DemandForecastTime-Phased Inventory PlanTransfer Orders, Manufacturing Orders, or Purchase OrdersConstrain Supply OrdersPromotional Data Advertising Calculate LiftInventory Rules: Service Levels Inventory TurnsOn-Hand Inventory, Expected Receipts, Customer OrdersB2B Collaborative Commerce SolutionsnullHistoric DemandForecastTime-Phased Inventory PlanTransfer Orders, Manufacturing Orders, or Purchase OrdersConstrain Supply OrdersOn-Hand Inventory, Expected Receipts, Customer OrdersInventory Rules: Service Levels Inventory TurnsB2B Collaborative Commerce SolutionsnullDemand PlanningDemand Planning Flexible Business Model Best Fit Modeling Graphical Review & Overrides Advanced SimulationsTo deliver the most accurate forecasts with the least effort.The GoalPyramid Power & FlexibilityManagement OverridesPyramid Power & FlexibilityLogistics Face DIVFamilySKUDCCustomerSaksAtlantaKK101WatchRetailFlexible AggregationFlexible AggregationTypeSales Face32 User Defined AttributesSKUSalesmanAreaRegionSKUDCCustomernullSEASONALNONSEASONALPATTERNED IRREGULARUNPATTERNED IRREGULARMOVING AVERAGEDERIVED Automatic Model SelectionnullSelf Correcting ProcessnullE-Business ContinuumE-Business ContinuumCollaborative CommunityCooperative CoercionTrade ExchangeEDI over InternetPre Internet1abcabc312a311ab2cBuyerSellerRelationship ModelOne to One Company v CompanyMany to ManyMany to ManyOne to Many Company v Company Hybrid ColloborationBuyerSellerBuyerSellerBuyerSellerBuyerSeller2abc312Ind. Material, Public CompetitionOne to One,M Chain v Chain Direct Material Private Collaboration CPFR.ORGE-Business ContinuumE-Business ContinuumCollaborative CommunityCooperative CoercionTrade ExchangeEDI over InternetPre Internet1abcabc312a311ab2cBuyerSellerRelationship ModelOne to One Company v CompanyMany to ManyMany to ManyOne to Many Company v Company Hybrid ColloborationOne to One,M Chain v Chain Direct Material Private Collaboration CPFR.ORGBuyerSellerBuyerSellerBuyerSellerBuyerSeller2abc312Ind. Material, Public CompetitionCPFR: What Is It?CPFR: What Is It?A major initiative by large-scale backers It’s not a technical protocol A business process model in 9 steps Applies to all trading partner relationshipsA Definition…A Definition…A formal business process for value chain partners to coordinate plans in order to improve efficiencies and increase sales and service.VICS-CPFR ParticipantsVICS-CPFR ParticipantsCorning Consumer Products Eastman Kodak Fieldcrest Cannon Hewlett Packard Kimberly-Clark Levi Strauss Philips Consumer Communications Mead School & Office Products Nabisco Pillsbury Procter & Gamble Sara Lee Warner-Lambert ManufacturersRetailersCircuit City Federated Department Stores JCPenney Kmart Staples Wal-Mart Benchmarking Partners DAMA Project Ernst & Young Intelink Uniform Code Council OthersCollaborative Trading Communities vs. ExchangesCollaborative Trading Communities vs. ExchangesOne to One • Many to Many Price is not • Price is key primary driver decision factor Products are branded • Products are not or differentiated differentiated Fulfillment is • Fulfillment is competitive weapon homogenous Discontinuous • Continuous innovation, innovation, integrating automating old business new business processes processes Exception based • Self-service based B2B Exclusive • B2C and B2BThe CPFR ProcessThe CPFR Process1. Front-End Agreement2. Joint Business Plan3. Create Sales Forecast 4. Identify exceptions 5. Resolve exceptions6. Create Order Forecast 7. Identify exceptions 8. Resolve exceptions9. Generate OrderOnceQtr.Wk, MoWk, MoCollaborative PlanningCollaborative ForecastingCollaborative ReplenishmentSellerBuyerSales ForecastOrder ForecastVoyager XPSTM – VICS-Compliant CPFR Voyager XPSTM – VICS-Compliant CPFR Collaborative Forecasting and Replenishment Configurable Workflow Capabilities Process Definition for managing Trading Partner Relationships Universal Exception Builder User configurable exception engine Scalable Deployment Hub and Spoke and Peer to Peer nullHeineken USAHeineken USAPer Gartner Group and AMR: acknowledged as the first collaborative forecasting and replenishment system over the Internet (live since Dec. ‘96) $750M/year beer importer 425 distributors (95% of volume) now live with HOPS over the Internet Order to Cash Cycle Reduced by 4 weeks (from 9 to 5)Case StudyHeineken, USAHeineken, USAChallenge: New business process, connecting 450 distributors, Heineken USA, and Heineken breweries May 1996: Contract signed July 1996: Implemented Logility Value Chain Solutions at corporate November 1996: Pilot distributors live with Demand and Supply Chain Voyager December 1998: 100% participationHeineken “before”Heineken “before”Extended order cycle time Traditional supply-side focus Disconnected from field knowledgeFactoryWarehouseDistributionTradeYou & MeHeineken “after”Heineken “after”Focus on entire Value Chain 4 week reduction in lead time Fresher product on shelf Heineken Sales focused on trade cultivationFactoryWarehouseDistributionTradeYou & MenullWhy CPFR?Why CPFR? Reduce variance between your Supply and your customers Demand through jointly derived plans. Increase Revenue. Competitive Advantage: Win with your partner mentality - “My chain is better than your chain”. More accurate collaborative plans equates to more accurate/automatic execution transactions. null