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Introduction to Collaborative Planning Forecasting and ... Introduction to Collaborative Planning Forecasting and ... Presentation Transcript

  • Introduction to Collaborative Planning Forecasting and Replenishment (CPFR) November 3, 2000 Bob Cowdrick Manager of Business Consulting Logility Inc. [email_address]
  • Agenda
    • Introductions
    • Logility Overview
    • What is CPFR
    • Software Demonstration
      • Demand Planning
      • XPS (eXtensible Planning Solution)
    • Case Study
    • Summary
    • Adjourn
  • Logility Mission Statement
    • To enable the optimization of our Customer’s Value Chain by providing solutions that collaboratively integrate their business processes with their Trading Partners
    • Leader: 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 Overview
    • “ 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 Research Analysts’ Opinions of Logility
  • Blue Chip Customers
  •  
  • Historic Demand Forecast B2B Collaborative Commerce Solutions
  • Historic Demand Forecast
    • Collaboration:
    • Lite Users
    • Sales Reps
    • World-Wide
    • Intranet-Based
    B2B Collaborative Commerce Solutions
  • Historic Demand Forecast Promotional Data Advertising Calculate Lift B2B Collaborative Commerce Solutions
    • Collaboration:
    • Lite Users
    • Sales Reps
    • World-Wide
    • Intranet-Based
  • Historic Demand Forecast Time-Phased Inventory Plan
    • Inventory Rules:
    • Service Levels
    • Safety Stock
    • Inventory Turns
    • Order Quantity
    Promotional Data Advertising Calculate Lift B2B Collaborative Commerce Solutions
  • Historic Demand Forecast Time-Phased Inventory Plan On-Hand Inventory, Expected Receipts, Customer Orders Supply Chain Network Transfer Orders, Manufacturing Orders, or Purchase Orders Promotional Data Advertising Calculate Lift B2B Collaborative Commerce Solutions
  • Forecast Time-Phased Inventory Plan Planned Orders
    • Inventory Rules:
    • Service Levels
    • Inventory Turns
    Historic Demand From Legacy Orders Trading Partners Promotional Data Advertising Calculate Lift B2B Collaborative Commerce Solutions
  • Historic Demand Forecast Time-Phased Inventory Plan Constrain Supply Orders Transfer Orders, Manufacturing Orders, or Purchase Orders Promotional Data Advertising Calculate Lift
    • Inventory Rules:
    • Service Levels
    • Inventory Turns
    On-Hand Inventory, Expected Receipts, Customer Orders B2B Collaborative Commerce Solutions
  • Historic Demand Forecast Time-Phased Inventory Plan Transfer Orders, Manufacturing Orders, or Purchase Orders Constrain Supply Orders Promotional Data Advertising Calculate Lift
    • Inventory Rules:
    • Service Levels
    • Inventory Turns
    On-Hand Inventory, Expected Receipts, Customer Orders B2B Collaborative Commerce Solutions
  • Historic Demand Forecast Time-Phased Inventory Plan Transfer Orders, Manufacturing Orders, or Purchase Orders Constrain Supply Orders On-Hand Inventory, Expected Receipts, Customer Orders
    • Inventory Rules:
    • Service Levels
    • Inventory Turns
    B2B Collaborative Commerce Solutions
  •  
  • Demand Planning
    • Flexible Business Model
    • Best Fit Modeling
    • Graphical Review & Overrides
    • Advanced Simulations
      • To deliver the most accurate forecasts with the least effort.
    The Goal
  • Management Overrides Pyramid Power & Flexibility Logistics Face DIV Family SKU DC Customer Saks Atlanta KK101 Watch Retail
  • Flexible Aggregation Type Sales Face 32 User Defined Attributes SKU Salesman Area Region SKU DC Customer
  • SEASONAL NONSEASONAL PATTERNED IRREGULAR UNPATTERNED IRREGULAR MOVING AVERAGE DERIVED Automatic Model Selection
  • Self Correcting Process
  •  
  • E-Business Continuum Collaborative Community Cooperative Coercion Trade Exchange EDI over Internet Pre Internet 1 a b c a b c 3 1 2 a 3 1 1 a b 2 c Buyer Seller Relationship Model One to One Company v Company Many to Many Many to Many One to Many Company v Company Hybrid Colloboration Buyer Seller Buyer Seller Buyer Seller Buyer Seller 2 a b c 3 1 2 Ind. Material, Public Competition One to One,M Chain v Chain Direct Material Private Collaboration CPFR.ORG
  • E-Business Continuum Collaborative Community Cooperative Coercion Trade Exchange EDI over Internet Pre Internet 1 a b c a b c 3 1 2 a 3 1 1 a b 2 c Buyer Seller Relationship Model One to One Company v Company Many to Many Many to Many One to Many Company v Company Hybrid Colloboration One to One,M Chain v Chain Direct Material Private Collaboration CPFR.ORG Buyer Seller Buyer Seller Buyer Seller Buyer Seller 2 a b c 3 1 2 Ind. Material, Public Competition Transaction Cost, Unit Cost Service, Revenue, Relationship Value Primary Benefit
  • 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 relationships
  • 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 Participants
    • Corning 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
    Manufacturers Retailers
    • Circuit City
    • Federated Department Stores
    • JCPenney
    • Kmart
    • Staples
    • Wal-Mart
    • Benchmarking Partners
    • DAMA Project
    • Ernst & Young
    • Intelink
    • Uniform Code Council
    Others
  • Collaborative Trading Communities vs. Exchanges
    • One 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 B2B
  • The CPFR Process 1. Front-End Agreement 2. Joint Business Plan 3. Create Sales Forecast 4. Identify exceptions 5. Resolve exceptions 6. Create Order Forecast 7. Identify exceptions 8. Resolve exceptions 9. Generate Order Once Qtr. Wk, Mo Wk, Mo Collaborative Planning Collaborative Forecasting Collaborative Replenishment Seller Buyer Sales Forecast Order Forecast
  • Voyager XPS TM – 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
  •  
  • Heineken USA
    • Per 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 Study
  • Heineken, USA
    • Challenge: 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% participation
  • Heineken “before”
    • Extended order cycle time
    • Traditional supply-side focus
    • Disconnected from field knowledge
    Factory Warehouse Distribution Trade You & Me
    • Focus on entire Value Chain
    • 4 week reduction in lead time
    • Fresher product on shelf
    • Heineken Sales focused on trade cultivation
    Heineken “after” Factory Warehouse Distribution Trade You & Me
  •  
  • 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.
  •