Analysis On The CPFR Concept As A Solution To Inefficiencies In The Retailing Sector In China

When the markets in the developed economies became more saturated in the 1990s and all rationalization potentials have been exhausted, collaborative supply chain management initiatives gained increasing popularity in the retail industry. A younger supply chain initiative is Collaboration Planning, Forecasting and Replenishment (CPFR). It is designed to eliminate inefficiencies between supply chain members by mutually sharing relevant information between trading partners. This method claims to create accurate forecasts and replenishment that result in a reduction of costs and an increase of sales. The Chinese retail industry has faced rapid growth rates and extreme competition since the entry into the WTO. However, retailers have in the meantime signaled inefficiencies in their business activities. The purpose of this paper is to comprehend the concept of CPFR with its processes, benefits and key success factors on the basis of an extensive literature research. In order to understand if the CPFR model currently fits into the conditions of the Chinese retail industry, a status quo of CPFR in China is given based on secondary research and primary information provided by VICS, a non-profit organization dedicated to the development of supplier retailer collaborations. Finally, the thesis identifies the key success factors of CPFR, managerial implications and consequences to the Chinese industry.