Professional Documents
Culture Documents
Login|Subscribe|Advertise|ContactUs|AboutUs
Search
Sponsoredby:
TOPICS
Browse70Categories
VIDEOS
TheLargestNetwork
THINKTANK
Blog,Whitepapers,Research
Forecasting&DemandPlanning
EuropeanGrocerySupplierShowsHowCPFRReallyWorks
SUPPLIERS
TheLargestDirectory
SCBTRANSLATOR
SelectLanguage
By:RobertJ.Bowman|December01,2002
CollaborativePlanning,ForecastingandReplenishmentmayhavebeenborninthe
U.S.A,butittookaGermangrocerysupplierdoingbusinessinSpaintodemonstrate
truecollaborationamongtradingpartners.
AnyAmericancompanystuckintheearlystagesofaCollaborative
Planning,ForecastingandReplenishment(CPFR)pilotwoulddowelltolook
acrosstheoceanforguidance.InSpain,amajorproviderofcleaning
productshasrealizeddramaticresultswithoneofthecountry'slargest
grocerychains.
ThepartnersareHenkelKGaA,theDusseldorf,Germanybasedmakerof
householdcleaners,adhesives,toiletriesandotherhomecareproducts,and
GrupoEroski,theSpanishgrocerychainwhosethousandsofoutletsrangefrom
"hypermarkets"tominimarkets.TogethertheylaunchedasuccessfulCPFRpilot,atatime
whenfewsucheffortswereinevidenceinEuropeortheU.S.
HenkelmaynotbeahouseholdnameintheU.S.,butit'stoughtoignoreinEurope,which
Melody Moore
DIRECTOR OF
REGULATORY
COMPLIANCE at
LeSaint Logistics
"At LeSaint safety is our
highest priority, and our team of knowledgeable
experts work hand-in-hand with our clients to
maintain compliance." Take a moment to learn
how these efforts unfold in every part of our
business.
Jeff Pennington
PRESIDENT of
LeSaint Logistics
"At the core of our culture is
the drive to make things
better for our clients. We
know our clients entrust their
supply chain to us." Every day our management
leads our teams to advance our service
performance to higher levels of efciencies. Take
a moment to learn how these efforts unfold in
every part of our business.
poweredwithNTENT
Resources
CloudbasedSupplyChain
Execution&Orchestrationin
anOmnichannelWorld:
Thiswhitepaperpresentsthe5key
stepstobuildingacloudready...
ASMMastersComplex
FinancialReportingwith
Wdesk:
ASMisaleadingsupplierof
semiconductorequipmentforwafer
proc...
ThePathtoSupplyChain
Cloud:
Thiswhitepapergoesintodetail
aboutthegrowthofthesupplych...
accountsfor50percentofsales.Thediversifiedcompanyhassoldofforacquirednumerous
entitiesinits126yearsofexistence.In2001,itshedtwochemicalmakingunits,Cognisand
HenkelEcolab.Themovereflectedadesiretofocusonitscoreproductlineofdetergents,
cleansers,adhesivesandtoiletries.Henkel'scurrentU.S.holdingsincludeManco,themaker
ofDuckTape,anda27percentshareinTheCloroxCo.
Atatimewhenmanyconsumergoodsmanufacturersare
struggling,Henkelhasdonereasonablywell.Itshowedan
operatingprofitof168meurosinthesecondquarterof2002,
up11.5percentoverthesameperiodofthepreviousyear.In
Ittookaboutayearfor
thefirstsixmonthsof2002,salesoftheHenkelGrouprose
HenkeltogettheCPFR
3.3percent,to4.9bneuros.StillcontrolledbytheHenkel
program'selementsfullyin
family,thecompanyhasabout47,000employeesaroundthe
place.
world,doingbusinessin70countries.
Beneaththesurface,though,Henkel'soperationshaven'tbeensoconsistent.Inthelate
1990s,thecompanywassufferingfromseriousflawsinitsforecastingandexecution
methods.Inventorylevelswereunacceptablyhigh,yetstockoutswerechronic.Sowere
transportationinefficiencies.
Muchoftheproblemstemmedfromaninabilitytogaugetheamountofproductneededina
givenmarket.AccordingtoEstebanGarriga,tradeservicesmanagerofHenkelIbericain
Barcelona,thecompanywasexperiencingsalesforecastaccuracyofbetween40and45
percent.Clearlytherewasaneedforbettertieswithretailers.
ButHenkeldidn'trushblindlyintoacollaborationproject.First,saysGarriga,itneededtoget
itsownhouseinorder.Thatmeantimplementinganewdemandplanningsystemforinternal
forecasting.Atthetime,thecompanyhadnocoherentsystem,wasunabletointegratea
continuousreplenishmentprogramintotheforecast,andcouldn'tevencommunicatethebasic
eventsonwhichitrelied.ForecastswereproducedthroughExcelspreadsheets.Theresults
werenosurprise:highcostsandpoorservice.
Henkel'sgoalswereequallyclear.Itwantedtoeliminateaslewofinternalglitches,including
stockouts,deliveryerrorsandinvoicingcomplaints.Forecastshadtobesynchronizedwith
productionatoneend,andconsumerdemandattheother.Purchasinganddistribution,two
http://www.supplychainbrain.com/content/technology-solutions/forecasting-demand-planning/single-article-page/article/european-grocery-supplier-shows-how-c
1/5
9/14/2016
http://www.supplychainbrain.com/content/technology-solutions/forecasting-demand-planning/single-article-page/article/european-grocery-supplier-shows-how-c
2/5
9/14/2016
http://www.supplychainbrain.com/content/technology-solutions/forecasting-demand-planning/single-article-page/article/european-grocery-supplier-shows-how-c
3/5
9/14/2016
Akeylesson,saysGarriga,wasthateachcustomerrequiresa
uniquefocus,emphasizingsomestagesattheexpenseof
others.TheEroskipilotcenteredoncollaborativeforecasting,
CPFRisstillarelativelynew
anareainwhichHenkelhadconsidereditselfespeciallyweak.
conceptinEurope.Sois
AsubsequentCPFReffort,withtheCataloniangroceryretailer
supplychainmanagement,
Condis,tackledupfrontagreementsleadingtopromotional
whichencouragesthefree
calendars.AccordingtoGarriga,thesoftwaretoolscreatedto
flowofdata.
supportCPFRmightfocusononeareaortheother,butnever
both.
It'seasytogetlostinthemassofrequirementsthatmakeuptheCPFRmodel.Garriga
recommendsthatcompaniesavoidtreatingtheeffortasasingle"superproject."Ratherthey
shouldapproachitasaseriesof20to30smaller,moremanageabletasks.Suchanapproach
canalsobehelpfulinimplementingCPFRwithsmallercustomers.
HenkelalsolearnedabouttheimportanceofmaintainingaCPFRprocessindefinitely.Long
afterapilothasbeenimplemented,companiesmustkeepinplaceataskforcetooverseeits
continuedsuccess,Garrigasays.
Henkel'ssuccesswithEroskileddirectlytothesubsequentpilotwithCondis,whichoperates
300storesinSpain'sCataloniaregionunderthebrandnamesofCondisSupermarketsand
Distop.Thistimearound,Henkelsoughttoincludenotjustthemanufacturerandretailer,but
anupstreamsupplier.Thegoal,saysGarriga,wasendtoendintegrationofthesupplychain
throughthedeploymentofCPFR.
LaunchedinSeptember2000,theCondispilotwascompletedearlierthisyear.Therelatively
lowtecheffortinvolvedtheuseofspreadsheetsfordata,withcollaborationtakingplace
throughemailandtelephone.ThefocusthistimewasonpromotionalSKUs.
JointlydefinedKPIsintheCondispilotincludedforecastingaccuracy,promotionplanning,
promotionplanchanges,servicelevels,inventorylevels,numberofrushorders,andtheuse
offullpalletsandfulltrucks.Initialresultsshoweda15percentimprovementinforecast
accuracybetweenJanuaryandJulyof2001,alongwithbetterjointplanningofpromotions.
Customerservicelevelsclimbedto99percentwithoutanincreaseininventorylevels.Overall
supplychaincostsfell6percent,largelyduetoadeclineinrushorders.
Fromthestart,saysGarriga,Henkel'sbiggestchallengewasgettingitsarmsaroundthe
complexCPFRmodel,andwhatwasneededtoapplyit."Wehadtoknowallofthedriversof
theforecast,"hesays."Thenwehadtodecidewhattofocuson."
Longerterm,CPFRcontinuestobeimpededbyageneralreluctancebysupplychainpartners
tocollaborateinameaningfulway.Manytoutthevirtuesofcollaboration,butfewseem
willingtoundertaketherevampingofbusinessprocesses,andsharingofsensitive
information,thatmakeitpossible.
FurtherblockingprogressisacontinuedlackofcommunicationsstandardsforglobalCPFR,a
deficiencythatmembersofVICS,theECRmovementandtheGlobalCommerceInitiative,
amongothers,areworkingtorectify.Still,thathasn'tstoppedsome50Europeancompanies
frommovingbeyondthepilotstagetofulluseofCPFR,saysFerrer.AndGossepointstothe
workofGlobalNetXchange,L.L.C.(GNX),anelectronicmarketplacewhichincludessomeof
thelargestretailersinEuropeandtheU.S.GNXfeaturesasupplychaincollaborationsuite
builtaroundtheCPFRmodel.
AsforHenkel,itisbentonextendingitssuccessintheEroskiandCondispilotstoother
http://www.supplychainbrain.com/content/technology-solutions/forecasting-demand-planning/single-article-page/article/european-grocery-supplier-shows-how-c
4/5
9/14/2016
RELATEDCONTENT
GotSupplierCapacity
Risk?
OMPPlusforChemicals
MayolySpindler:No
Shortages
ChangingDemandson
Foodservice
SmartPlanning&
Business
RoadmaptoBetterSupply
ChainPlanning
CaterpillarUsestheGT
NexusCloud
AdvancedQuality
Planning
AdsPoweredwith
>moreForecasting&DemandPlanningarticles
MorefromSupplyChainBrain
TheMagazine
Resources
SCBCorporate
News
Subscribe
Newsletters
AdvertiseonSCB.com
FeaturedContent
ManageYourSubscriptions
EventsCalendar
AboutUs
IndustryVerticals
PastIssues
Library
ContactUs
Videos
SupplyChainInnovators
SupplyChainSolutionsForm
PrivacyPolicy
Blogs
SupplyChain&LogisticsJobBoard
SiteMap
Whitepapers
Research&Analysis
Webinars
SupplierDirectory
CaseStudyShowcase
Allcontentcopyright20152016KellerInternationalPublishingCorpAllrightsreserved.Noreproduction,transmissionordisplayispermittedwithoutthewrittenpermissionsofKellerInternationalPublishin
http://www.supplychainbrain.com/content/technology-solutions/forecasting-demand-planning/single-article-page/article/european-grocery-supplier-shows-how-c
5/5