Customer replenishment planning

World Wide Web, supported by, 246, 256 Collaborative customer/demand planning, 968 Collaborative forecasting and replenishment, 779-780, 785... 

Plan B2B Integration and application server systems Forecasts are replaced with actual customer replenishment signals and orders where possible 5-Supply Chain Governance 0 X X ... 

Efficient Consumer Response (ECR) and Collaborative Planning, Forecasting and Replenishment (CPFR) both are operations models in the consumer goods industry to ensure delivery capability and avoid stockouts based on an automated replenishment of outlets using product inventory, historic and/or planned sales information at the point-of-sales (POS). CPFR focuses on a close cooperation between retailer and manufacturer. ECR focus on the customer-facing reaction on customer responses in logistics, sales and promotions. 

The only way to avoid this is by strict analysis of the supply chain from the customer order to final product delivery. Definition of the optimized (theoretical) process and sequential work towards a high service level approach allow the identification of gaps, and of opportunities which might not always be the cheapest (ship versus train versus plane) but could be the most effective way to reduce capital costs and shorten planning scope - an important aspect, especially in volatile customer markets with long production processes on the (chemical) supplier side. As in the case of CIP, this needs clear parameters, KPIs, commitment from all players, and regular tracking. The most important parameters are the lead time for all products, optimal lot sizes, replenishment points, and safety inventories. 

Production-inventory systems are one of the most established subjects in industrial engineering. The focus is on studying inventory dynamics, with inventory viewed as a buffer between supply (production/replenishment) and customer demand. Hence the emphasis is really more on inventory than on production, the latter being the primary focus of other IE subjects, such as scheduling and production planning. 

There are several planning functions precede the actual retrieval of products for customer orders. The first of these is to check current inventory levels in the forward pick areas and generate replenishment reports. Most warehouse operators prefer to replenish at the beginning of the shift, for reasons of safety and efficiency. Some replenishments may occur during the pick process, especially if the information about orders is incomplete, or if operators select full cartons from the item pick area when they should be selected from the carton pick area. The WMS should support workload balancing in the pick operation reflect different picker capabilities according to data in the personnel master (Table 10), and reflect different number of operators according to pick wave and shift. The abdity to balance workload over more than one day is desirable, but it is usually not available in the typical WMS. 

The CPFR model has a general framework, illustrated in Fig. 4.13, by which a buyer and seller can use collaborative planning, forecasting, and replenishing processes in order to meet customer demand. To increase performance, the buyer and seller are involved in four collaboration activities that are fisted in logical order, but companies often engage in these activities simultaneously. 

TOP (Table of Pulls) Units of end product per day used for supply chain planning. The TOP for a product is the agreed-to peak sales level. When the TOP equals the MSR, customer satisfaction is guaranteed. Sometimes a company may lower the TOP below the MSR. This could be a tradeoff between customer service and the cost of inventory. The TOP for an end product is used to plan 3C replenishment to support the customer service objective. 

Bullwhip effect results in poor aggregate production plans that lead to increased safety stocks, reduced customer service due to shortages, increased transportation cost, and inefficient allocation of resources (labor and equipment). By increasing the communication of actual downstream demand and collaboration between trading partners, the bullwhip effect can be minimized. One such collaborative process is known as collaborative planning, forecasting and replenishment (CPFR). Refer to the appendix in Chapter 3 of this book for a detailed description of the bullwhip effect in supply chains. 

Supply chain visibility— According to Blackhurst et al. (2005) supply chain visibility refers to the sharing of information in real-time across the supply chain stages and among their partners. The net effect of visibility is to make the supply chain more responsive, increase availability and reduce inventory risk. For example, Dell shares customer demand information with its suppliers so that they can maintain proper inventory of needed parts. Wal-Mart shares points-of-sales (PoS) data with its suppliers so that they can forecast and plan their replenishment strategies. 

Besides, Tesco introduced IT system that fostered collaborative planning, forecasting, and replenishment (CPFR) in 1999. Sharing of information using CPFR led to reduce the response time. Suppliers obtained Tesco customer needs and led to produce the appropriate goods. Thus, the use of information became more important in logistics. Tesco introduced a loyalty card and got the consumer needs from its loyalty card. Loyalty card fostered up store loyalty. 

Integrated demand planning driven by POS customer movement data Continuous replenishment programs vendor managed inventory, telemetry to automatically communicate replenishment of chemicals 5- upply chain governance O 0 X... 

The firm has created real-time integration between its sales configurator and its scheduling system. The firm also developed an application to attract customer orders that get published on the site. This integration, combined with improved supply chain planning, has enabled Miller SQA to reduce order fulfillment time from 21 days to fewer than 5 days. The most advanced networks are now hard at work on collaborative planning, forecasting, and replenishment (CPFR). 

With improvements to forecasting and a reliable level of accuracy as deliverables, the firm looks next at its demand management and capacity planning systems. For any such system to work effectively, the firm must meticulously collect the necessary data from everyone who can generate valuable information about demand — internal sales representatives, customer service personnel, channel partners, distributors, customers, and consumers. This data must then be refined frequently and updated to match actual consumption and replenishment needs. Any alterations to changing consumer preferences, customer needs, buying patterns, competitive moves, and market conditions need to be part of the input to a dynamic system of analysis, direction, and response. The process is continuous and requires maintenance to keep the demand plan as close to actual consumption and replenishment needs as possible. 

Customer relationship management (CRM) systems will finally flourish and link the nucleus firm with its most important business customers, while collaborative planning, forecasting, and replenishment (CPFR) techniques will be at work with any retailers or business customers benefiting from this type of shared effort. Distributors and resellers will play a familiar... 

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