Continuous Replenishment Program (also known as Vendor Managed Inventory - VMI) is a vital tool in the implementation of the Efficient Consumer Response (ECR) strategy. It is the practice of partnering between distribution channel members that changes the traditional replenishment process from distributor-generated purchase orders, based upon economic order quantities, to the replenishment of products based upon actual and forecasted demand.
CRP is based on the principal of "pulled" logistics, where the replenishment of a warehouse takes place on the basis of information about sales and other factors necessary for efficient replenishment in the supply chain. The warehouse information values are current stock levels of both the retailer and the supplier. By making this exchange on a daily basis the system makes it possible to better monitor the warehouse and the expected demand. This leads to more effective planning in regards to production on the supplier's side and the management of warehouse levels and ultimate just in time supply to the retailer.
Safeway’s primary objective of a CRP trading partnership is improved inventory turnover, reduction in warehouse inventory, reduced out of stocks at the warehouse level, improved store service levels, and improved warehouse efficiency.
As a supplier, the primary benefit of CRP is the effective distribution and smooth flow of products towards the retailer. This helps in the development of a strategic partnership between the supplier and the retail / distribution trading partners. In addition, you will have a more integrated warehouse replenishment cycle and the store replenishment cycle to create a product flow that mirrors consumer demand. The ultimate goal is to have the supplier maintaining the inventory with minimal review on the part of Safeway Centralized Procurement.
Safeway provides a detailed CRP start up package that include a questionnaire and service level agreement for those suppliers that are interested in initiating a CRP program with us. Part of the startup includes exchanging item history, item identification codes, and sending test data. In order to support CRP the supplier needs to be capable of receiving and processing EDI transactions 852 and 824 and responding with 997 acknowledgments for both, as well as sending EDI transactions 855. Please see our mapping documents in the Implementation and Mapping guides section of this site (http://suppliers.safeway.com/usa/edi_us/edi_mapping.asp).
Safeway sends warehouse 852 data daily for most North American facilities. For the current list of times please visit: http://suppliers.safeway.com/usa/edi_us/VMI_Job_Schedule.pdf
If your company is interested in exploring the opportunities a CRP relationship will offer, please contact the electronic data department of Safeway via email at firstname.lastname@example.org.
Source: Council of Supply Chain Management Professionals retrieved on March 16, 2010 from web site http://cscmp.org/digital/glossary/glossary.asp
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