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IEM 5763 - Supply Chain Strategy

CASE STUDY - 4

Campbell Soup Company: A Leader in Continuous Replenishment Innovation

By
Leader: Arun Dhanapal
Facilitator: Rajkumar Ramakrishnan
Discussant: Aravind Jasti

2/21/2012

1.Campbell’s Implementation of CPR

Company Background:

Campbell is a largest branded product company, which has made a strong stand in US grocery distribution channels. By maintaining excellent relationships with its retailors and wholesaler customers, they were continuously involved in improving the channel efficiency and effectiveness for mutual benefit of the company and as well as its customers.

Continuous product replenishment (CPR) was the process used by Campbell to improve the channel efficiency. Initially the CPR Pilot program was conducted with HEB using a PC-Based process that was intensive manually. This was based on an internal Lotus spreadsheet application. Use of this PC system was not introduced to experiment or test with CPR, but it was very easy and quick to implement the change in the process.

Campbell was using electronic data interchange (EDI) with many customers, which facilitated development of CPR capabilities. With EDI Campbell could gather the total volume of data between retailor and manufacturer. EDI gave a machine readable structured format between computers at different companies. There was a continuous development and expansion of CPR Systems, New Mainframe system was tested and released expanding the CPR program to new customers, with third and fourth release simulation tools became more powerful sales tool.

Problems that led to CPR implementation:
Increase in product promotions made forward buying favorable for the supply chain. •The addition of promotional pricing to forward buying made it difficult to estimate the consumer demand. •The uncertainty in total demand and large fluctuations in periodic demand increased manufacturer inventory. •This resulted in...
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