Collaboration

CPFR®: The 21st Century’s Most Powerful Process for Consumer Satisfaction By Michael J. Peterson CPFR® is the 21st Century’s most powerful process for consumer satisfaction. Giving strategy, purpose, and structure to retailer-vendor partnerships, it is the culmination of years of struggle between their competing priorities. But by the end of 2002, only the gorilla chains of Walmart and Target have done enough CPFR® pilots to aggressively expand this technique to a sizable portion of their sales volume. Any other retailer who hopes to execute well enough to grow in the 21st Century must take the leap required to move forward with their major vendor partners. The CPFR® framework for creating demand based manufacturing and store inventory has been proven to increase sales and profits. Senior management must understand this and commit to it, making it a corporate priority, otherwise the organization will not adapt CPFR® on their own. Processes may have to change, especially those that cross functions internally. Collaboration Only by working together toward the same goal can any partnership reward both parties. If the retailer’s version of just in time means vendor holds the goods until my stores need it, or the manufacturer rewards its team solely on selling more product than last year, one side or the other gets squeezed on profits by carrying too much of the inventory load. Instead of win/win, it’s “I win, you figure out how to win.” However, if the manufacturer and retailer can agree that their common goal is to satisfy as many customers as possible, at the highest profit to both parties, they can each win and both make more money. This new type of collaborative partnership requires a long-term commitment to openly communicate, and share information. Partnering on strategy as well as execution requires trust and commitment, but is the only sustainable way to grow sales and profits. Retailers and vendors who take this long-term view with a majority business will...