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To link CPFR and S&OP successfully, pay close attention to the following recommendations: Begin with a best-practice methodology. Manufacturers must find a methodology that ties independent best practices into a more holistic process that involves all partners in the supply chain. Manufacturers also should seek a methodology for connecting CPFR and S&OP that is built on insights from a number of retail partners. Additionally, best-practice committees such as Voluntary Interindustry Commerce Solutions (VICS) provide an opportunity for manufacturers and their trading partners to participate and validate the synergy of connecting CPFR and S&OP processes. Evaluate your technology platform. Manufacturers must ensure that they have technology that is scalable and can support a linked CPFR and S&OP process. Retrofitting an emerging process into an old architecture or application built for a different purpose will cause more headaches than positive results. Scalability is critical as time-phased demand planning generates massive amounts of data, and an outdated system simply cannot support the integration of data at this level of granularity. By adopting an advanced enterprisewide technology foundation, manufacturers will be effective at integrating this data into a unified CPFR and S&OP process. Take a proactive approach. Success or failure in this integration process hinges on creating a foundation of support with key trading partners. Without that support and trust, manufacturers will not receive the data and visibility generated by time-phased demand planning. Manufacturers should portray accurately how the data will be used to drive value to their trading partners. This includes committing to such benefits as shorter lead-times, higher order fill rates,
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improved on-time delivery and lower supply chain costs as a result of sharing this data. Establish a cross-functional team. Cross-functional teams historically have played a critical role in developing a single, shared forecast and replenishment plan with an assigned mass-market retail customer. However, in the past these teams have not been effective in ensuring that consumer demand data is translated into time-phased order plans and integrated into the supply chain, essentially defeating the purpose of the mass retailer providing this visibility. Manufacturers need to ensure that cross-functional teams have proven processes for migrating data pulled from timephased demand planning and transformed into a holistic CPFR and S&OP process. Seek executive sponsorship. Significant change in management will need to take place on behalf of the manufacturers and their high-volume trading partners. It is imperative that C-level executives make the process a priority to drive organizational change and build a foundation of trust. Senior leaders will require a business case that can support the transition to this new working model. Value analysis models are available to assist with quantifying the value to gain required resources. Companies also can potentially accelerate behavior and process change by seeking out industry-leading consultants with proven track records for facilitating strategic processes and behavioral changes.
product and geographical hierarchies. It is imperative that the participant views of the planning process can be summarized and changed at different levels of aggregation and then revised up or down the product location/hierarchy via automation. Incorporate a common framework and access approach to monitor performance of the collaborative S&OP (CS&OP) process. A common analytical environment should be connected to the single data repository to ensure that all constituents in the CS&OP process are measuring and monitoring performance from a common point of view. To allow for continuous process improvement, team members must buy into the measurements that are put in place and have timely access to metrics that they are chartered to deliver. Because many of the constituents in the process will be dispersed geographically, Web-based architectures are best suited to fill this requirement. Inventory, sales, margin, demand plan accuracy and other key operating plan metrics will point to opportunities, weaknesses and threats that should be addressed in the monthly CS&OP meetings. Exceptionreporting capabilities will go a long way to assist management and improve the efficiency of the process. Ensure the planning environment balances statistical views with human intelligence. It is a given that a statistical demand planning engine should be in place to support the collaborative demand planning process. It is critical, however, that the statistical engine be balanced by human intelligence that calls out assumptions incorporated into the working plans. The solution should have a place to incorporate these written assumptions into the demand planning view so plans and assumptions can be reviewed continually for validity. In addition, there should be documentation placeholders for vulnerabilities, opportunities and action items related to the associated planning views. This will help guide future strategies that mitigate risk and take advantage of key opportunities as they occur.
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