Learning curves in collaborative planning, forecasting, and replenishment (CPFR) information systems: An empirical analysis from a mobile phone manufacturer

Abstract

a b s t r a c tWhile Collaborative Planning, Forecasting, and Replenishment (CPFR) information systems have been increasingly deployed to improve supply chain operations in a cross section of industries, the extant literature has largely overlooked the learning effects within organizations, thereby resulting in incomplete assessment of their business value. Using an operational-level panel data for nine product lines over 2.5 years, we empirically examine the learning curves in CPFR between Motorola, a mobile phone manufacturer, and one of its U.S.-based national retail partners. We found that the two key components of CPFR, collaborative forecasting (CF) and collaborative replenishment (CR), exhibit distinct learning curves. Forecast accuracy improves immediately following CPFR implementation but the rate of improvement slows over time, whereas inventory levels increase at first and begin decreasing after a period. Further, we found different learning effects in terms of inventory levels when products are later replaced with new form factors. Product replacements have lower inventory levels than their antecedents, at least for lowend products. We discuss important implications for theory and practice at the interface of information systems and operations management.

A Systematic Literature Review of Collaborative Planning Forecasting and Replenishment

“…The CPFR process is based in SC partners' joint decisions and the dynamics of the replenishment process (Barratt and Oliveira, 2001). Sales, promotions, production, purchasing and product development are jointly planned (Larsen et al, 2003, Attaran, 2004, Attaran and Attaran, 2007, Danese, 2007, Sari, 2008b, Yao et al, 2013, Ramanathan and Gunasekaran, 2014. A single demand projection is created, so the companies have a unique and mutually agreed forecast (Larsen et al, 2003, Ireland, 2005, Danese, 2006b, 2007, Chang et al, 2007, Chen et al, 2007, Yao et al, 2013, Ramanathan, 2014.…”

“…Sales, promotions, production, purchasing and product development are jointly planned (Larsen et al, 2003, Attaran, 2004, Attaran and Attaran, 2007, Danese, 2007, Sari, 2008b, Yao et al, 2013, Ramanathan and Gunasekaran, 2014. A single demand projection is created, so the companies have a unique and mutually agreed forecast (Larsen et al, 2003, Ireland, 2005, Danese, 2006b, 2007, Chang et al, 2007, Chen et al, 2007, Yao et al, 2013, Ramanathan, 2014. Based on this forecast the production and the activities to deliver products in response to market demand are synchronised and collaborative inventory replenishment is developed (Sherman, 1998, Larsen et al, 2003, Danese, 2007, Yao et al, 2013.…”

“…Trust is the most cited enabler in the literature (e.g., Barratt and Oliveira, 2001, Larsen et al, 2003, Attaran and Attaran, 2007, Chang et al, 2007, Chen et al, 2007, Småros, 2007, Chang and Wang, 2008, Büyüközkan et al, 2009, Choi et al, 2010, Smith et al, 2010, Yuan et al, 2010, Büyüközkan and Vardaloğlu, 2012, Yao et al, 2013. Trust refers to the confidence between trading partners that no one of them will exploit vulnerabilities by one of them (Ghosh and Fedorowicz, 2008).…”

“…Collaboration varies in scope and configuration according to contextual variables, among which market dynamics (demand uncertainty/unpredictability), goals (responsiveness versus efficiency), product diversity (same or different products) and number of partners (spatial complexity) seems to be the most relevant (Danese, 2011 (Fliedner, 2003), although it was later expanded to such a diversified array of industries astransportation, healthcare, automotive, mechanical equipment, agriculture, pharmaceutical, computers, packaging (Attaran, 2004, Danese et al, 2004, Ireland, 2005, Cassivi, 2006, Thron et al, 2006, Danese, 2007, D'Aubeterre et al, 2008, Sari, 2008b, Danese, 2011, Yao et al, 2013, Ramanathan, 2014. Some authors argue that CPFR methodology is applicable to any industry (Fliedner, 2003, Ireland, 2005.…”

“…A sustained attention is being given to CPFR initiatives due to the "success stories" reported from leading focal companies such as Wall Mart and Nabisco, among several others (Barratt and Oliveira, 2001, Danese, 2006b, Attaran and Attaran, 2007, Danese, 2011. By 2010, the Voluntary Inter-industry Commerce Standard (VICS) committee reported that over 300 companies had implemented CPFR initiatives (Lapide, 2010, Yao et al, 2013). …”