Background

1. What is Drummond Group, Inc. (DGI)?

General

2. What is interoperability and why is it important?
3. What is tested in the interoperability tests?
4. What is CPFR® and who oversees it?
5. What is the mission of the CPFR® Committee?
6. How often are VICS CPFR® meetings held and where?
7. How can I determine if CPFR® will help my organization?

Technical

8. What technology do I need to implement CPFR®?
9. What is the CPFR® Nine-step process and do I need to implement all nine steps?
10. Why is sharing Event data important and what are the benefits?
11. What are the business benefits of interoperable CPFR® applications?
12. Where can I find the lists of certified interoperable software?
13. Where can I find more information about CPFR®?

8) What technology do I need to do CPFR®?
Technically, CPFR® specifications, recommendations, and discussions of technical implementation criteria fall into four areas:

• Data Format Standards:
• Interoperability Messages:
  For exchanging messages between CPFR® applications, CPFR® XML data formats have been developed. Specifications were published by the EAN.UCC Global Standards Management Process (GSMP) on March 21, 2002, and are available at:

  The EAN.UCC CPFR® Business Message Standards

  and the EAN.UCC CPFR® XML Schemas

• Transaction Data:
  For exchanging data between trading partners and a given CPFR® application, various Data Formats are used, but EDI and CSV are common. The CPFR® application vendors have provisions in their software to import these and other formats, and your company does not have to have Forecasts, POS and Event data in XML in order to engage in CPFR® relationships.
• Transport Protocol:

AS2 data transport for transmitting messages between CPFR® trading partners. CPFR® solution vendors typically partner with AS2 vendors thereby providing their CPFR® and AS2 solution as a package.
• Security Considerations:

Techniques for authentication, encryption, non-repudiation, and origin of CPFR® messages are addressed by the Transport Protocol AS2.
• CPFR® Applications:

Several companies offer CPFR® solutions. These CPFR® solutions offer software to help manage the CPFR® Nine-step process.

9) What is the CPFR® Nine-step process and do I need to implement all nine steps?
CPFR® is defined in a Nine-step Business Process outlined below. However, you do not have to do all nine steps to gain benefits from CPFR®. Many deployments focus on the first five steps. Still, others only implement the first three steps (where a buyer may be focused on giving visibility to plan only).

Recent trends have shown that there is a stronger focus on sharing Event data with presentations at recent VICS CPFR® meetings.

CPFR® Nine-Step Process

Step 1 - Develop Front-End Agreement
Step 2 - Create Joint Business Plan
Step 3 - Create Sales Forecast
Step 4 - Identify Exceptions for Sales Forecast
Step 5 - Resolve/Collaborate on Exception Items
Step 6 - Create Order Forecast
Step 7 - Identify Exceptions for Order Forecast
Step 8 - Resolve/Collaborate on Exception Items
Step 9 - Order Generation

10) Why is sharing Event data important and what are the benefits?
Promotions and other retail events have a major impact on sales volume in the retail channel, at times generating many months' worth of sales for a product in a single week. Such major swings in demand can result in out-of-stock situations, high logistics costs, and large amounts of excess inventory if they are not planned and executed well.

To be successful, both parties need a clear view of upcoming events, with agreed timing, terms and volume estimates. They also need to be alerted to any changes in promotion plans or product availability as quickly as possible.

By communicating this critical information to partners in a timely fashion, the following benefits will be realized:

• An increase in efficient planning and negotiation
• Reduction in errors, resulting in fewer stock outs and less residual stock
• Better integration of event impact into forecasts and replenishment plans
• More accurate, detailed understanding of event impact

11) What are the business benefits of interoperable CPFR® applications?
As CPFR® deployments continue to grow, organizations will want and are beginning to standardize on a single CPFR® application of their choice. Without interoperable CPFR® applications, replenishment analysts will be required to use multiple CPFR® applications, thus introducing the following bottlenecks to the adoption of CPFR®:

• Larger staff of replenishment analysts to learn multiple CPFR® applications
• Non-centralized location of data restricting analysts from viewing the "whole picture" in their CPFR® application
• Difficult back-end integration because data is not centrally localized in one CPFR® application
• Replenishment analysts specialized on single CPFR® applications
• Cross-training of staff

Please refer to the following whitepaper which discusses the importance of interoperable CPFR applications: "CPFR® Interoperability"

12) Where can I find the lists of certified interoperable software?
The results of the interoperability tests conducted by DGI are now published on the www.drummondgroup.com website:

For Test Results, click on the following link:

• CPFR® : http://www.drummondgroup.com/html-v2/cpfr-companies.html

13) Where can I find more information about CPFR®?
Extensive information regarding CPFR® is available throughout the website, www.cpfr.org, which is devoted exclusively to CPFR®. This website also contains online PDFs that explain each step of the business process. In addition, you will find presentations and meeting minutes from previous CPFR® meetings. Attendance of a VICS CPFR® meeting is also encouraged.

-- CPFR® is a Registered Trademark of Voluntary Interindustry Commerce Standards (VICS)