Collaborative forecasting: a selection of practical approaches

The Collaborative Planning Forecasting and Replenishment (CPFR) process model developed by the Voluntary Inter-industry Commerce Standards (VICS) association has received significant attention from both practitioners and academics. However, despite promising pilots, the adoption rate of CPFR has been slower than expected, especially in Europe. The reason seems to be that the proposed collaboration process is currently too labour-intensive for many companies. There is a need for streamlined approaches to get collaboration started in Europe. This paper presents a case study involving a supplier and a retailer collaborating to increase the retailer's forecasting accuracy for new product introductions. The approach is based on creating one forecast that is then shared within the supply chain. Three other streamlined approaches to planning and forecasting collaboration are also presented on a more general level. Finally, there is a discussion as to how the product life cycle model can be used to select and combine the most suitable approaches to collaboration in different market situations.