CPFR Clamor Persists, but Adoption Remains Slow

Computerworld - Chicago

The fact that one retail executive felt compelled last week to issue a public challenge for his industry peers to push collaborative planning, forecasting and replenishment (CPFR) at their companies was a telling statement about its slow progress.

The term CPFR—which refers to a collaborative business process for improving supply chain efficiency—made its debut six years ago at the annual Retail Systems Conference and Exposition, according to those involved in its introduction. Although interest in CPFR is high and experts predict that it will be pervasive, pilot projects remain far more plentiful than large-scale implementations, and scores of retailers haven't begun to implement CPFR, various industry sources and analysts said.

"I'm losing patience with CPFR in terms of getting it going," Tom Cole, chairman of New York-based Federated Logistics, Operations, Store Planning and Systems, told attendees of this year's Retail Systems conference. Federated Logistics is a division of Cincinnati-based Federated Department Stores Inc.

Cole's disappointment extended to his own company, which he said has just one serious CPFR pilot in the works with Liz Claiborne Inc.

"When we sit here and talk about it amongst all these people, we have to realize it's not a success," Cole said. "It's still an idea."

Boston-based AMR Research Inc. estimates that 45 to 65 retailers and 100 to 150 manufacturers are piloting or implementing some form of CPFR. Some are doing projects with multiple trading partners, but no company is where it would eventually like to be.

Cincinnati-based Procter & Gamble Co., for instance, was one of the earliest adopters of CPFR and is doing collaborative planning with hundreds of retailers, according to Milan Turk, the company's director of customer e-business. But in order for Procter & Gamble to reach the sort of critical mass that will impact its production cycles, it will need to have roughly 12 of those retailers performing full CPFR with the company, he said. "That's two to three years away," Turk said.

That's not to say that the early adopters aren't seeing benefits. A study commissioned by the Grocery Manufacturers of America that was unveiled in its full form for the first time last week showed that those that have done CPFR pilots noted improved relationships with their trading partners as the No. 1 benefit. Interestingly, improving forecast accuracy, which many had anticipated would be the primary benefit, ranked fifth.

Stephen David, CIO at Procter & Gamble, said his firm and its retailer customers are seeing good results, but industry adoption has been slower than he would like. "People are starting to realize that you're not going to do full CPFR with every retailer-supplier relationship, and the most important part is working on the collaborative portion of this," he said.