The Procurement Glossary » Collaborative Planning, Forecasting & Replenishment (CPFR)

Collaborative Planning, Forecasting & Replenishment (CPFR)

Inventory & Logistics

Also known as: CPFR

Definition

A practice where buyer and supplier share forecasts and plans to synchronise supply with demand.

Explanation

CPFR aligns both parties around a shared demand picture, reducing the bullwhip effect, stockouts and excess stock. It requires trust and data-sharing but yields smoother, cheaper supply for both sides.

Example

Sharing promotional plans with suppliers under CPFR prevents the usual post-promo stockouts.

Related terms

• Demand Forecasting — Predicting future demand for goods to guide purchasing, inventory and production planning.
• Vendor-Managed Inventory (VMI) — An arrangement where the supplier monitors and replenishes the buyer's stock of its items, taking responsibility for availability.
• Bullwhip Effect — The amplification of demand variability as it travels up the supply chain, causing swings in orders and stock.
• Supplier Collaboration — Working jointly with suppliers on shared goals such as cost reduction, innovation, quality or forecasting.

Frequently Asked Questions

What is Collaborative Planning, Forecasting & Replenishment (CPFR)?

A practice where buyer and supplier share forecasts and plans to synchronise supply with demand. CPFR aligns both parties around a shared demand picture, reducing the bullwhip effect, stockouts and excess stock. It requires trust and data-sharing but yields smoother, cheaper supply for both sides.

Can you give an example of Collaborative Planning, Forecasting & Replenishment (CPFR)?

Sharing promotional plans with suppliers under CPFR prevents the usual post-promo stockouts.

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