Collaborative Planning, Forecasting And Replenishment (Cpfr) Definition
Collaborative planning, forecasting and replenishment (CPFR) is a business practice in which supply chain partners work together to forecast customer demand and share information to streamline inventory management. The goal of CPFR is to reduce waste and stock-outs while maximizing customer satisfaction.
CPFR begins with both parties sharing their knowledge about the product, customers and market trends. This information is used to develop a sales forecast. Next, both parties develop replenishment plans that detail how and when inventory will be replenished. Finally, the partners review the plans and make adjustments as needed.
The key to successful CPFR is communication and trust between the supply chain partners. Both parties must be willing to share information openly in order for CPFR to be successful.
