gap between the customer service levels of VMI and CPFR is in its highest level when the uncertainty in market demand is in its highest level.Talking in numbers, while CPFR produces 1.52% of higher customer service level under low level of demand uncertainty (i.e. DV = SDV), it is increased to 2.
90% when there is high level of uncertainty in the market demand ( i.e. DV = HDV). This analysis makes us to conclude that compared with a VMI system, the value of CPFR is substantially greater under the market conditions where demand variability is high. Therefore, SCM practitioners have to be more eager to implement CPFR programs under more volatile market conditions.
The gap between the service levels achieved by CPFR and VMI increases as the lead times increase.To summarize we can see that the value of CPFR is greater in bigger lead times when compared to VMI and so, the SCM managers have to invest more in CPFR instead of VMI when the lead times are longer.4.3 Impact of Lead time on Supply Chain collaboration:The fig 3. Shows the relationship between the overall performances of CPFR and VMI under the influence of Replenishment Lead time.
It can be seen that, there is a significant impact on the performances due to Lead time. Some key points to be noted from the analysis are:The results were obtained from MANOVA results and they indicate that at 5% significance level, the interaction effect between L and SCTYPE has significant impacts on both performance factors. This means that lead times have a significant influence on CPFR and VMI for all performance measures.
It also reveals that CPFR and VMI exhibit different performance levels under different replenishment lead times.While the reduction amount in total supply chain cost under CPFR increases with increase in lead time, it is not the same case with VMI. There is in fact not much significant savings gained from the VMI. It is observed that the supply chain operated under CPFR, there is a reduction of supply chain cost by almost 20% as the lead time increases from 2 weeks to 4 weeks.
On the other hand, for VMI the level of increase or decrease in the lead time has no significant effect on the total supply chain cost.Considering the customer service level, we observe that under all the levels of lead times, the CPFR produces a higher level of fill rate than the VMI. In addition to that we can conclude that the gap between the service levels achieved by CPFR and VMI increases as the lead times increase. To summarize we can see that the value of CPFR is greater in bigger lead times when compared to VMI and so, the SCM managers
