Asda Pushes CPFR Initiative
By George Anderson
Wal-Mart’s Asda division is looking to improve the flow of information between it and its trading partners to keep its store shelves stocked and its customers happy.
As an article on the Leeds Today web site explains, Asda vendors can now get a real time picture of the on-shelf availability of their products through the company’s collaboration, planning, forecasting and replenishment (CPFR) initiative.
Wal-Mart Stores has been out front of CPFR initiatives in the U.S. The company ran its first CPFR test in 1995 with Warner-Lambert to expedite the flow of Listerine to the company’s stores.
To help suppliers overcome the learning curve in the U.K., Asda is working with the training and e-learning provider Dynamic Business Services.
Eileen White, training and implementation manager at Asda, said: “Dynamic have made CPFR easier and faster to understand for our staff and suppliers, leading to maximization of on shelf availability — a win-win situation for all concerned, especially our customers, which was the whole point of the exercise.”
Moderator’s Comment: What is the current state of collaboration, planning, forecasting and replenishment (CPFR) efforts
in the retailing and related supplier industries today? – George
Anderson – Moderator
The very fact that you are asking this question makes me think that progress is slow. I was writing about CPFR and its benefits five years ago for a food industry b2b report. By now it should have been de rigeur if the concept was a fraction as good as its proponents made out. Or perhaps it is only good for some and not so good for others? Hmmmmm as our colleague would say.
This is just one example of where near real-time messaging is taking supply chain management. By combining this with serialization made possible by RFID, all parties can have a view of “what and where”. There are huge opportunities here. Just think of the DSD delivery truck pulling up outside the store and the driver identifying the number of returns and inventory needs before they enter the store. In one trip, they could accomplish what now takes two trips. It also means that check-in times are greatly reduced and the suspicion on delivery accuracy is eliminated.
Inventory management applications for the warehouse will be able to consider the entire supply chain as additional “reserve stock” as they monitor the approach of new inventory and lower the amount of on-hand inventory carried for safety stock.
As graphical interfaces expand, the “video game generation” will manage the supply chain through visual queues that show bottlenecks in red and yellow warning images for items low on inventory. They will be able to use “point and click” interfaces to add items to loads, move reserve inventory into selection areas, or send a trailer from the yard to the receiving dock.
Wal-Mart obviously recognizes this opportunity in the US, and the effort at Asda will be their first step along the way.
Even moderate size retailers and suppliers have major collaborative activities. Since no one, retailers or suppliers, wants to carry inventory anymore, the collaboration is required. Because of lead times, it isn’t possible to buy or supply imports without careful planning, which inevitably has to be collaborative. It’s only through joint planning that anyone larger than a flea can stay in stock.
Disclosure: RAM Communications provides marketing and media relations support to the Voluntary Interindustry Commerce Standards Association, the progenitor and sponsor of CPFR©.
There are some amazing developments happening with CPFR. In a case study published last month in Supply Chain Management Review, West Marine reported having more than 200 CPFR relationships representing 90 percent of the retailers volume, In stock rates following CPFR implementation are close to 96 percent, including the peak boating season, and forecast accuracy is up to 85 percent. And Larry Smith, the company’s senior vice president of planning and replenishment expects further improvements!
I encourage retailers and their suppliers, as well as IT vendors, consultants and trade groups to visit the VICS website (www.vics.org) for more information.
Well for many supermarket retail chains, a lot of them are still far behind on the full implementation and even the concept of using CPFR for their use of keeping “shelves fully stocked.” You have to remember that even with the larger retailing chains for whatever industry they serve, there are simply too many changes in demand and trends that the use of CPFR seems silly.
What looks to be a instant messaging version of EDI, for example would look like a massive rock concert with 1 million people, and trying to talk to each individual before the end of the night. Also its only the larger suppliers of these chains that can afford or gain ROI on such a change.
It took many years just to implement EDI and now were moving again? It may be a while after the current downturn before we see progress here….