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Essay on Supply Chain Effectiveness
Another critical result: food companies are being forced to look at ways to increase the effectiveness of their supply chains in order to stay competitive, according to Laver.
Food manufacturers and retailers are increasingly working together to improve supply chain effectiveness through initiatives such as collaborative planning, forecasting and replenishment (CPFR).
A study by the Grocery Manufacturers of America indicates that 67 percent of its member companies are engaged in some form of CPFR activity.
"CPFR initiatives use technology and a standard set of business processes for Internet-based collaborative forecasting and replenishment, with the ultimate goal of improving efficiencies across the supply chain, reducing inventory, improving service levels, and increasing sales," according to GMA.
Food giant Nabisco has long been involved in CPFR. "We look at CPFR as bringing supply chain management and category management together," explains Rick Blasgen, vice president of supply chain for Kraft Foods North America (and formerly vice president of supply chain for Nabisco).
While Nabisco's focus has shifted temporarily to finalizing its merger with Kraft Foods, collaboration has been a top priority for Nabisco. "We wanted to take advantage of the information provided through collaboration," Blasgen notes.
Nabisco implemented a CPFR pilot program involving Nabisco's Planter's brand and several retail partners, including Wegman's, the first retailer to participate in the pilot program.
"Through the Wegman's pilot, we were able to prove the CPFR model, and that we could grow market share," Blasgen explains. "It was a good learning experience, and proved that collaboration could work."
Following the pilot effort, Nabisco began evolving the CPFR model and developing better processes. "The tools weren't available to accommodate a lot of volume between multiple customers," Blasgen says. Nabisco had to do forecasting manually.
Technological tools have improved since the pilot program, so should no longer act as a roadblock to collaborative efforts..........
