In the manufacturer to retailer model, customer collaborative partnerships have been a dominant theme since the 1990s. Although there was a lot of energy behind CPFR and retailers are adopting different versions of collaborative forecasting and replenishment strategies now. These include Collaborative-VMI, CPFR, CMI, Shared Single Forecast, and replenishment, etc.
The retailers have emphasized the adoption of Collaborative Planning for better forecasting promotional volume. So there is a broader adoption of CPFR and Account-Based Forecasting in this space although there is no consistent standard among either manufacturers or retailers. The CPFR that is being preached by retailers also varies in flavor from one retailer to the other and between Mass, Food and Drug.
Some retailers focus on the Sales or the POS forecasts, while others focus on promotional forecasts alone. Again some Retailers focus on starting the process with two different forecasts, while others emphasize the importance of a Shared Single Forecast.
More formally, collaboration is defined as the creation of a shared understanding between two participants where none had previously existed or could have come to on their own.
Test of Collaboration:
Is there good Communication between collaboration Partners?
Are they communicating the right information?
The probability of an accurate collaborative forecast depends on the accuracy of the forecast as well as proper and timely communication.
If you have a question or comment