Exploring the effectiveness of Collaborative Planning, Forecasting and Replenishment (CPFR) in enhancing supply chain performance in drop shipping

Abstract

Business operations have shifted from inter-organization to cross-enterprise due to supply chain management improvements and information technology advancements. New business models have emerged in response to the explosive growth of online retail, including the drop-shipping concept. Dropshipping is a relatively new type of order fulfillment in which the retailer does not store inventory. The merchant displays goods online and sends customer data to the producer, who ships straight to the customer. This method is frequently utilized as a supply chain solution to meet online demand. However, this model faces several challenges, such as uncertainty of demand, lack of control over inventory, and the need for efficient collaboration with suppliers. This paper explores the effectiveness of Collaborative Planning, Forecasting, and Replenishment (CPFR) in enhancing supply chain performance in dropshipping. Relevant literature on CPFR and drop shipping were explored and the findings indicate that CPFR is an effective strategy for improving supply chain performance in dropshipping. By enhancing collaboration and communication between suppliers and sellers, CPFR helps to mitigate the challenges faced by the dropshipping model.