These revenue-growing collaborations become a part of the single forecast. The value of having a single demand plan, if nothing else changes, would be to better coordinate value-chain process activities. This coordination would yield significant, but not dramatic benefits. Dramatic benefits come from using the demand plan to affect the significant constraints inhibiting supply-process performance. An example of a significant constraint would be manufacturing flexibility.
Most manufacturers hold finished goods inventory in sufficient quantities to meet retail demand.
Manufacturing capacity is not used because the retailers' normally short order-cycle times are inconsistent with longer manufacturing cycle times. This removes the need to hold a significant amount of finished goods inventory in the value chain and improves customer service, which produces dramatic benefits. Another example of constraints that could be addressed involves dynamic inter-enterprise scheduling to optimize asset utilization across manufacturing, transportation, and distribution centers. CPFR provides the foundation for these and many other breakthrough supply-process improvements.