Retailer Views on Forecasting Collaboration

Forecasting collaboration between retailers and suppliers is suggested to bring significant benefits in the form of increased efficiency and improved customer service. Yet, only few companies seem to be engaged in collaborative relationships. Even in the grocery sector, which is one of the most active promoters of supply chain integration efforts such as Efficient Consumer Response (ECR) and Collaborative Planning, Forecasting and Replenishment (CPFR), companies seem to have been slow to embrace collaborative forecasting. In this paper, data collected through in-depth interviews with twelve leading European grocery retailers is used to examine three hypotheses suggested to explain the slow adoption rate of collaborative forecasting in the European grocery sector. The data is found to support the proposition that retailers’ lack of forecasting capabilities is a more important obstacle to forecasting collaboration than the required investments in information technology. Evidence on the different forecasting needs of retailers and suppliers is also found. Some additionals elements of forecasting collaboration are also identified.