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EXECUTIVE SUMMARY | Fourteen years ago Collaborative Planning, Forecasting and Replenishment (CPFR) was introduced as a concept for which a manufacturer and retailer could jointly do replenishment planning of the retailer's inventories. Its history has largely followed the Gartner Hype Cycle. It started out with a lot of hype during the Internet/Dot.com Bubble, and then fell into a trough of disillusionment when the Bubble burst. Today its use is relatively pervasive, however, not in the same way it was standardized during the early days. It's about a bigger concept-supply chain collaboration. I got on the Collaborative Planning, Forecasting and Replenishment(CPFR) program bandwagon very early, just as it was getting started. There was much excitement about it in the supply chain community. It was viewed as a way for manufacturers and retailers to drastically reduce inventories, costs, and waste in consumer product goods (CPG) supply chains. Eventual Iy the excitement was about supplier-customercollaborationin general, as offering the long-term panacea, and the epitome among ways from which to integrate supply chains - and thereby gain huge benefits in inventory reductions and increased sales. Like most technology innovations, it followed the Gartner Hype Cycle in which early-on, after a trigger, it experienced a period of 'Inflated expectations, then a period of trough of disillusionment,and eventually enlightenment that led to its current period of productivity. The Early Days My first awareness of CPFR came over 14 years ago upon reading a Business Week magazine article, dated October 21, 1996, titled Clearing The Cobwebs from the Stockroom: New Internet Software May Make Forecasting a Snap (http:// www.businessweek.com/1996/43/ b3498166.htm). The article described a working pilot that was being conducted by WarnerLambert Company and Wal-Mart to co-forecast the retailer's sales of Listerine mouthwash, and to improve the retailer's inventory replenishment of the product. The initiative at that time was not called CPFR; instead, it was called Collaborative Forecasting and Replenishment or CFAR, to represent the implication of a see far initiative. According to the article, a small consulting firm, Benchmarking Partners, had developed CFAR with funding from Wal-Mart, IBM, SAP, and Manugistics (now part of JDA Software) and was trying to establish industry standards for the way retailers and their suppliers should collaborate over the Internet. That January, I joined Benchmarking Partners for about a year to play a part in CPFR's evolution, and continued to track the industry initiative during my tenure as a supply chain analyst for AMR Research (now part of Gartner). During this time, like many others, I felt that CPFR was going to be great and an important way in which to leverage the Internet to totally integrate supply chains. Like the Internet, we all felt that 'It was going to change everything and that we were entering into a new economic model. The first major AMR Research report I wrote on CPFR was published in July 1998: Are We Moving from Buyers and Sellers to Collaborators? While the title was posed as a question as to whether CPFR was going to be a big deal, the report was bullish on its long-term prospects. In that report, I showed Figure 1 to depict not just the manufacturer-retailer collaboration (regarding demand planning), but also all the various other opportunities along a supply chain for collaboration among selling and buying trading partners. I conjectured that the collaboration concept was going to be useful not only for the relationship between a manufacturer and a retailer (i.e., what CPFR was focused on), but also between a manufacturer and its multi-tiered set of suppliers to do Synchronized Production Scheduling and Collaborative Product Development. I also postulated collaboration among manufacturers and their logistics provider to do collaborative logistics planning for transportation and distribution center (i. …
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