Has your organization been struggling to deliver a consistent fill rate to your client or service level to your client’s customers? Has it been challenging for your company to keep decent inventory coverage or maintaining satisfying forecast accuracy? If you answered yes to one of these questions, it might be time for your corporation to rethink some aspects of your supply chain.

What Is CPFR?

In today’s competitive market, it is more and more difficult (if not almost impossible) to gain efficiencies and improve demand response for companies working in silos. One of the key enablers of efficiencies and improvements across supply chains is to create and use collaborative planning, forecasting and replenishment (CPFR) strategies across organizations’ boundaries. CPFR strategies allow aligning of multiple S&OP processes and jointly plan supply chain activities to ensure that the joint business plans between organizations are respected, while minimizing costs and maximizing efficiency from end-to-end of your supply chain.

Collaboration is a journey; it is built step by step. It requires a significant investment of time and resources. Each client has a different mission, organisational structure, targets, objectives and so forth. There is no “one size fits all” solution; collaboration has to be adapted and tailor made for each major customer. Hence, the first step is to identify for which customers the return on investment will be the greatest. The client needs to have a collaborative mindset, an open mind and represent a significant percentage of your total turnover.

CPFR Is Collaborative By Nature

Secondly, you need to determine which individual in your organization has the right skills and knowledge to build such an important project. This person needs outstanding client facing and PR skills while having a great and extended knowledge of internal processes, systems, business opportunities and a great sense of the “big picture”. To kick off the CPFR project, the objectives, priorities and expectations of both parties need to be discussed, defined and agreed. Furthermore, the customer’s processes, systems and operational rules have to be mapped and completely understood.

Subsequently, the collaboration project leader has to realise a quick “win-win” in order to gain the trust and build relationship with the customer’s organisation. I can’t stress enough the importance of relationship and trust for successful CPFR. Afterwards, joint key performance indicators need to be established. Collaborative companies need to agree on SMART objectives (Specific, Measurable, Attainable, Realistic or Relevant and Time based). A target for each KPI has to be determined. I highly recommend creating a weekly scorecard or dashboard displaying all the KPI to track and monitor. This dashboard has to be shared between all stakeholders of both corporations. It is very useful to monitor KPI, identify opportunities and keep everybody informed of the project’s progress. Corrective actions need to be taken to improve results and tackle the different challenges and opportunities.

If you are able find the right balance of all these ingredients, using the right resources in the right time, your organization will definitely become the best in class supplier for your customer! CPFR strategies are great tools to make your supply chain a competitive advantage in today’s market!

Cedrick Laporte-Roy
Customer Supply Chain Manager
L’Oréal

Constance Korol

Last night I had the pleasure of previewing the International Auto Show at the Jacob Javitz Center courtesy of Ford and the Social Media Club of New York City/ SMCNYC.

Scott Monty at the International Auto Show in New York City

We were certainly warmly welcomed as we were treated to a cocktail reception and a great networking opportunity with not only social media mavens but Ford executives such as Scott Monty, Head of Social Media at Ford, as well. I have seen Scott speak before at last year’s BlogWorld show but the event was overwhelmingly huge making  it quite difficult to approach him with so many people vying for his attention. This time it was much easier to get a moment to speak with him

We discussed Ford’s success over the past couple of years due in no small part to the company’s focus on profitability and staying true to the brand  but more importantly, their focus on relationships. He seemed extremely proud to be able to say “We didn’t take a dime from the government”. Ford leveraged social media by aggregating consumer ideas, collaborating with others with one goal, to make the best vehicle….”Together we arrive at a better decision”.  While social media played a role in developing and improving Ford’s relationships with consumers, Scott also mentioned in his short talk that the company also made it a priority to maintain a healthy relationship with its employees. This meant that even during the suffering economy, Ford employee morale remained stable.  I asked Scott if Ford has been struggling with supply chain issues and/or facing out of stock situations as a result of the crises in Japan. He replied on a similar theme, crediting great relationships with their suppliers for the fact that  they are doing OK.

Scott summed up his talk with the words that any good company would want to hear from their consumers, employees, suppliers or simply those that like them on Facebook…… “They built a relationship with me, I trust Ford”

How are relationships benefiting your business/company?  Take our poll on Linkedin and let us know your feedback in the comments.