CVS Launches CPFR

Looks to boost customer service while benefiting suppliers, too

Scottsdale, AZ  May 16, 2002  Pharmacy chain CVS Corp. has launched a collaborative planning, forecasting and replenishment (CPFR) program in a bid to boost customer service while also delivering benefits to its suppliers.

CVS, a $22 billion company, went live with JDA Software Group's Portfolio E3 private exchange solution following an implementation that lasted less than seven weeks, and the pharmacy has already begun collaborating with one of its largest suppliers in the health care industry.

CVS expects to aggressively expand the CPFR program with other strategic suppliers. The CPFR program is instrumental to CVS' corporate mission to provide superior customer service as well as to deliver significant benefit to its suppliers, according to Leo Hartnett, vice president of efficient customer response at CVS.

"Our ultimate goal is to take care of the customer day in and day out," Hartnett said. "By collaborating with our partners to establish a single, shared demand forecast, our suppliers will be able to reduce their finished goods inventory and plan even better against their raw materials. As a result, we can make sure that our customers' personal and product needs are taken care of during their shopping experience."

Commenting on the JDA solution, Hartnett said: "JDA's collaborative framework provides simplicity, security, accessibility and a proven methodology. As a result we have been able to rapidly adopt the principles of CPFR to achieve the supply chain benefits we'd expect in a collaboration environment."

Hartnett expects to achieve a number of other benefits using the JDA Portfolio Web-based portal to access JDA's inventory optimization application, which CVS has been using for nearly nine years. These benefits include the ability to reduce lost sales, decrease inventories and improve handling and productivity.

"CVS has been carefully watching the progress of collaborative technology for several years and quickly moved past the industry's distrust of sharing data," said JDA's Fred Baumann, senior director collaborative business solutions and member of the Voluntary Inter-industry Commerce Standards (VICS) Committee's CPFR advisory board.

"By strategically extending the collaborative opportunity to the right partners, CVS and its suppliers will achieve a [return on investment] that delivers unmistakable competitive advantages," Baumann predicted.