D I C DP The supply chain fulcrum (i) Key D : Demand DP : Decision Point I : Inventory C : Capacity

D I C DP The supply chain fulcrum (ii) Visibility and Velocity enable the fulcrum to be placed nearer to Demand in order to reduce the need for inventory and/or capacity.

Visibility and velocity drive responsiveness Postponement Bottleneck Management Reduce non- value adding time Simplification Streamlined processes Reduce batch sizes Velocity in-bound lead-times Synchronous Supply Strategic Sourcing Visibility Internal Integration Close to customers suppliers Collaborative Planning Event Shared Information Process Access to real demand

The sales and operations planning process Generate aggregate demand forecast Modify forecast with demand intelligence Create a consensus forecast Create ‘rough cut’ capacity plan Execute at individual item (SKU) level against demand Measure performance

Benefits of CPFR Optimise production Reduce capital invested Higher utilisation of production capacity Greater supply chain visibility allows inventory and storage capacity reduction Reduce capital invested Reduce storage capacity Inventory 20-25% reduction inventory carrying cost Improved forecast accuracy 50% reduction in unplanned overtime Up to 500% ROI on promotions Reduced excess and obsolete inventory Reduction in lead time Wastage Benefits Decrease Costs Overtime Transportation cost Better availability Increase revenue Reduced out-of-stocks Improved consumer satisfaction ratings Improved consumer satisfaction