Question

Discuss how the CPFR process can enhance organization internal and external relationships, improve return on investment (ROI), and increase customer satisfaction.

Answer 1

CPFR is the abbreviation for Collaborative Planning, Forecasting and Replenishment. CPFR is a cross-industry drive that helps to build relationships between suppliers, manufacturers and retailers through shared information and effective collaborative planning process. It is one of the integrated supply chain methods with the prime objective of increasing the efficiency of the trading partners to provide improved services to the customers.

The benefits of CPFR results in:

- Enhanced organization internal and external relationships – The shared forecast helps in effective planning. It gives focus and direction for internal functional departments such as sales, marketing, production, etc. There is transparency in shared goals which allows the external trading partners to aling their goals with that of the manufacturer thus leading to efficiency in processes. This results in faster lead times, on-time delivery and quality compliance.

- Increase in Sales – A collaborative approach in planning and forecasting helps in reducing shortage of stock which results in lost sales. It also increases the optimum availability of stock thus leading to increased sales.

- Cost Savings – CPFR facilitates alignment of the production schedule with the forecast. This greatly helps in reducing the idle time, duplications etc thus increasing the ROI.

- Optimum Capacity Utilization- CPFR helps in optimum capacity utilization thus increasing the efficiency of the production system increasing ROI and customer satisfaction about quality of the product.

- Customer Satisfaction- CPFR results in enhanced relationships between the trading partners and their common goal is to satisfy customers’ needs. This results in increased customer satisfaction both in terms of quality and delivery of the product. Additional service assistance also enhances customer satisfaction. Retailers with CPFR collaboration offer specialized technical installation and repair for customer loyalty and their satisfaction.

Note- If you liked the answer, please give an up-vote, this will be quite encouraging for me, Thank you.

-