Table of Contents FoREWORD OF THE vıcs CPFR COMMITTEE Rira Marzian, coclıair VJCS CPFR, Metro AC ]im Mcl.auçhlin, cochair VICS CPFR, Cillette Joseplı C. Andrashi, vice chair VICS CPFR, senior vice president, OMI Inıemaıiona! PREFACE 1 EFFICIENT CONSUMER RESPONSE AS THE ORIGIN OF CPFR Prof Dr. Dirk Seifert, Harvard Business Sclıool and University of Massachuseıts 1.1 THE GoALS AND TAsKs OF THE ECR CoNCEPT 1. 2 THE REvERSAL OF THE Pusu PRINCIPLE TO THE PuLL PRINCIPLE iN THE SUPPLY CHAIN xiii XV 1 3 5 V VI Table of Contents 1.3 ECR-CoLLABORATION flELD Locrsrrcs: SuPPLY Cı-ıAIN MANAGEMENT 7 1.3.1 The Implernentation of Supply Chain Planning 7 1.3.2 The Goals ofRetailers and Manufacturers Bound to Supply Chain Management 7 1.3.3 The Cost Savings Poterıtial of Supply Chain Managenıent 8 1.4 ECR-COLLABORATION flELD MARKETiNG: CATEGORY MANAGEMENT 11 1.4.1 The Goals ofRetailers and Manufacturers Bound to Category Management 11 1.4.2 The Nine-Step Category Management Planning Process 11 1.4.3 The Management ofCategories as Strategic Business Units 21 2 THE CPFR CONCEPT 27 2.1 THE CPFR VALUE PROPOSITION 27 Proj Dr. Dirk Seifert, Harvard Business School anıl Universitv of Massachuseıts 2.11 Integration ofCPFR in the ECR Concept 27 2.1.2 The Birth of CPFR: Wal-Mart and Wamer-Lambert's First Pilot 30 2.1.3 lnstitutions and Organizations of CPFR Development 31 2.1.4 The CPFR Process Model 34 2.1.5 CPFR and Value Creation 40 2.2 SALES AND ÜRDER FORECASTS iN THE CPFR PROCESS F0R RETAIL 41 Proj Dr. Cerharıl Arminger, Universitv of Wupperta! anıl SAF-AC 2.2.1 Integrated Dernand and Supply Chain Management 42 2.2.2 Sales Forecasts for Stores, Distribution Centers, and the CPFR Process 46 2.2.3 Order Building and Forecast 53 2.2.4 Issues in Practical lnı.plementation 55 2.3 CPFR EMERGES AS THE NEXT M0VEMENT iN SUPPLY CHAIN MANAGEMENT 56 ]oseph C. Andraski, VICS CPFR and OMI lnıernational 2.3.1 Studies Reveal Supply Clıain Managenı.ent Benefıts-Opportunities and a Patlı Forward 57 2.3.2 Progressing Beyond Supply Chain Management 59 Table of Contents vıı 2.3.3 CPFR as a Chaııge Ageııt 2.3.4 Industry Starıdards Are Critical 2.3.5 CPFR Addresses Several Key Pairı Points 2.3.6 lınpleınentatioıı and Payback Can Be Quick 61 63 65 66 2.4.1 2.4 CPFR-STATUS AND PERSPECTIVES: KEv REsuLTS OFA CPFR SURVEY IN THE CoNSUMER Gooos SECTOR AND UPDATES [ulie Fraser, Indusırv Directions ine. Survey Background 2.4.2 CPFR: The Next Wave 2.4.3 2.4.4 2.4.5 2.4.6 2.4.7 3 3.1 3.1 .1 3.1 .2 3.1.3 3.1.4 3.1.5 3.1.6 3.1.7 3.2 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.3 Proveıı CPFR Benefıts Perforınance and Challenges Leveraging Diverse Initiatives and Systems Sharing the Knowledge CPFR Implemeııtation CPFR iN NORTH AMERICA MAJOR TRENDS iN NORTH AMERICAN CPFRADOPTION Thomas H. Friedman and Creg Be/kin, Moon Watch Media Inc. Collaboration Means Restructuring Supply Chain Processes Scalable CPFR Requires lncrernental Developrnent The Power of üne CPFR Optimization Requires Order Forecasts Collaborative Efforts Drive B2B Exchanges Case Study: Wal-Mart lnitiates CPFR with Sara Lee Case Study: Schering-Plough Reinforces Collaborative Trading Practices CONSUMER-CENTRIC CPFR Lawrence E. Fennell, Wai-Man Sıores Current Retail Environment and Looking Forward Five Years lt's Time to Crack the Books Defıning CPFR How Do You Get Started? What Are the Obstacles? Where Do You Go from Here? CPFR-VIEws AND ExPERIENcEs AT SAFEWAY Christopher A. Bradv, Sqfeway 3.3.1 CPFR.. Is About Communication 70 70 73 74 77 80 84 86 95 95 95 98 100 102 104 106 108 111 111 116 118 120 120 121 122 123 viiı Table of Contents 3.3.2 3.3.3 3.3.4 3.4 3.4. l 3.4.2 3.4.3 3.4.4 3.5 3.5.l 3.5.2 3.5.3 3.5.4 3.5.5 3.5.6 3.6 3.6.1 3.6.2 3.6.3 3.6.4 3.6.5 3.6.6 3.6.7 4 4.1 4.l.1 The Application ofCPFR at Safeway Implementation lssues Suppliers Clıange Their Existing Processes CPFR IMPLEMENTATION AT AcE HARDWARE AND MANco Brian Basıock, Marıco Fred Baumann, JDA Soflware Scoıı Smith, Ace Hardware Primary Business Challenge The Role ofNew and Standardized Techniques Benefits Realized Level ofDiffıculty-Challenges to Be Addressed CPFRIMPLEMENTATION AT CANADIAN TıRE AND GLODALNETXCHANGE (GNX) Ceciffrey S. Frodsham, Canadian Tire Corporation Nick J. Miller, ClobalNetXchange Laura A. Moorıey, Manugistics What Is Driving CPFR? Technology Enabling CPFR Merging of Optimization and Collaboratioıı The Use of CPFR at Canadian Tire The Use ofCPFR at GNX GNX Client Results: Metro AG aııd Procter & Gamble THE POWER OF STANDARDS-BASED COLLADORATION-THE UNIFORM Cooa Couxcn. AND CPFR Joseplı C. Aııdraski, VICS CPPR and OM! Intemaıional Miclıael E. Di Yeso, Uııiform Code Coundl Standards: The Foundation for Collaboration Standards: Critical for Business Innovation Collaboration: The New Culture ofBusiness The EAN-UCC System: Gateway to CPFR Global Adoption Data Synchronization: Essential for Accurate Data Exclıange CPFR in Action Standards, Collaboration, and Comıııunication: Forrnula for Supply Chain Success CPFR iN EUROPE CPFR: REAoy 'ro TAKE ÜFF ıN EuROPE Prof Dr. Dirk Seifert, Hanıard Business School and Universiıy of Massachusetts Major Differences Between the United States and Europe 123 125 126 127 127 129 134 136 140 141 146 150 152 159 160 162 163 164 165 166 167 169 171 173 173 173 Table of Contents ıx 4.1.2 ECR Europe as a CPFR Pacernaker in Europc 4.1.3 CPFR Gets Rolling in Europe 174 175 4.2 llEsULTS OFA CPFR STUDY IN EuROPE Nils Weisphal, IDS Stheer AC and Universitv ofHaınbıır.R!Cerınaııy Prof Dr. Wı:/helın Pfdlıler, Universıtv ofHambıırg!Cerınany Dr. Ferri Aba/hassan, IDS Scheer AC Data Basis of the Study Which Strategies Are Conıpanies Following with CPFR? Influence of CPFR on the Prevailing Competitive Situation in I ııdustry 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.3 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 lnternal R.eorganization Due to CPFR Prospects CPFR rN GERMANY, AusTRIA, AND SwITZERLAND Saskia Treeck, Centrale j, :fr Coorganisation (CCC) Miclıael Seislıojf, Ceııtrale für Coorganisation (CCC) ECR D-A-CH-The Platform for CPFR in German-Speaking Courıtries The Necessity ofa CPFR.. Management Paper for the Germaıı­ Speaking Market ECR Concept-CPFR. Business Model Sales Forecast Conclusioıı 4.4 CPFR IMPLEMENTATION AT DM-DROGERIE MARKT ANO HENKEL IN GERMANY Cunter Baumgarı, Henkel Dr. Birgit Ester, dın-drogerie marlet Christian Schick, dın-drogerie markı Developm.ent of the Collaboration Betweeıı Henkel aııd dııı.-drogerie rnarkt CPFR as a Further Step in the Joint Business Process The Start of the CPFR Pilot 4.4.1 4.4.2 4.4.3 4.4.4 Experiences from tlıe Pilot Project and a Perspective on CPFR 4.5 CPFR IMPLEMENTATION AT DM-DROGERIE MARKT ANO PROCTER & GAMBLE IN GERMANY Chsisıian Senice, dırı-drogerie markı Peter Hambuch, Procter & Camble 4.5.1 Front-End Agreement 176 177 185 192 198 202 203 203 205 206 208 214 215 215 219 220 224 226 226 X Table of Contents 4.5.2 4.5.3 4.5.4 4.5.5 4.6 4.6.1 4.6.2 4.6.3 4.6.4 4.6.5 Conclusion and Perspective 4 7.1 4.7 2 4.7.3 4.7.4 4.8 4.8.1 4.82 4.8.3 4.8.4 4.8.5 5 5.1 5.1.1 5.1.2 Joiııt Busiııess Plan . • ı E ece tioııs Exchange O f Forecasts an d Maııageınent of Cntıca x p . Order Generation CPFR-A Learning Process: Eval ua. tı•on of Tes, t Resu 1 ts CPFR IMPLEMENTATION AT L0NDIS IN GREAT BruTAIN Doııald P. Breııchley, )DA Sofiware The Business Problem and How it Was Solved Advantages for Suppliers Advantages for Londis Advantages for the Consuıner 4.

7 CPFR IMPLEMENTATION AT HENKEL SPAIN Sergio Dı.ıque, Heııkel Spain Esteban Carriga, Heııkel Spain Hans Teı.ıscher, Accenture Spain New Demand-Planning Systenı CPFR Pilot-Henkel and Eroski Developnıent ofa CPFR Business Case CPFR Pilot-Henkel and Condis CPFR-Vrnws ANo ExPERJENCEs AT PROCTER & GAMBLE Peter Hambuc/ı, Procter & Camble The Objective of CPFR Collaboration Through the Entire Supply Chain at Procter & Gamble CPFR wirh Retai] Organizations CPFR with Suppliers Experience at Procter & Gaınble with Pilot Projects CPFR PERSPECTIVES AND ROADS TO IMPLEMENTATION MIGRATION TO VALUE