Carrefour:

Managing the Global Supply Chain

By Manuel EL PAPIBOSS Peralta

Introduction
About Carrefour
Carrefour S.A. (French pronunciation: [kafu]) is a French multinational retailer
headquartered in Boulogne Billancourt, France, in the Hauts-de-Seine Department
near Paris.[2] It is one of the largest hypermarket chains in the world (with 1,452
hypermarkets at the end of 2011[1]), the fourth largest retail group in the world in terms
ofrevenue (after Wal-Mart, Tesco and Costco), and the third in profit (after Wal-Mart
and Tesco[3][4]). Carrefour operates mainly in Europe, Argentina, Bahrain, Brazil, China,
Dominican Republic, Iran, United Arab Emirates, Qatar, Lebanon, Kuwait and Saudi
Arabia, Pakistan, but also has shops in North Africa and other parts of Asia, with most
stores being of smaller size than hypermarket or even supermarket. Carrefour means
"crossroads" and "public square" in French. Previously the company head office was
in Levallois-Perret, also in the Paris suburbs.[5] The company is a component of
the Euro Stoxx 50 stock market index
The first Carrefour store opened on 1 January 1958 in suburban Annecy near a
crossroads (carrefour in French). The group was created by Marcel Fournier, Denis
Defforey and Jacques Defforey and grew into a chain from this first sales outlet. In 1999
it merged with Promods, known as Continent, one of its major competitors in the
French market.
Marcel Fournier, Denis Defforey and Jacques Defforey had attended several seminars
in the United States led by "the Pope of retail" Bernardo Trujillo (fr), who influenced them
to move forward with Carrefour idea.
The Carrefour group was the first in Europe to open a hypermarket, a large
supermarket and a department store under the same roof. They opened their first
hypermarket on 15 June 1963 in Sainte-Genevive-des-Bois, near Paris in France.[7]
In April 1976, Carrefour launched a private label Produits libres (free products
libre meaning free in the sense of liberty as opposed to gratis) line of fifty foodstuffs,
including oil, biscuits (crackers and cookies), milk, and pasta, sold in unbranded white
packages at substantially lower prices.
In September 2009, Carrefour updated its logo.[8]
In May 2011, Carrefour reviewed its situation under conditions of stagnant growth and
increasing competition in France from rivals including Casino Guichard-Perrachon SA,
and planned to invest 1.5 billion ($2.1 billion) to change the supermarket with the new
concept of Carrefour Planet in Western Europe.
In April 2015, Brazilian businessman Ablio Diniz revealed he was in talks to raise his
5.07 percent stake in Carrefour and has the support of shareholders to take a board
seat.[9]

Issues and Findings

Issues
Customization of supply chain country wise
Standardization of business processes across world
Integration at the center.
Findings
Use of IT to enhance efficiency
Procurement EDI & Shared Service Centers (SSCs)
Logistics Third Party Logistics solution providers (3PLs)
Warehouse WMS with Radio Frequency scanning.

1-In tune with its global vision, Carrefour streamlined and standardized its supply chain
processes in various countries. Explain how shared service centers (SSCs) helpedthe
company streamline its procurement process.

CORE
-Problem Lack of IT application integration across countries
-Solution Project Thales
BENEFITS
-Automation of procurement process
-Lesser documentation
-Enhanced transparency
-Standard Financial processes
-Easier flow of information
-Reduced Operating cost
-Better bargaining power.
1.Creation of Shared Service Centers (SSCs) in all countries
2.PeopleSoft PO module
3.Common information system platform
4.Order placement at 1 location in 1 country

5.Electronic catalogues
6.Consolidation of orders

PROCUREMENTS & SSC

Procurement
Supplier management strategy based on driving down costs
Standard protocols for the introduction and management of new vendors
Suppliers are evaluated to ensure that they are operating within the Carrefour guidelines
Regional procurement centers
Managers place orders for local goods in line with the companys strategy of
customization
2 about ssc
By reengineering its accounting processes, creating a shared financial services
organization to support the business change, and implementing a common information
technology and management infrastructure, Carrefour was able to reduce operating
costs, streamline its financial processes, and position the company for an aggressive
growth strategy.
not only geographically international, but truly global in vision, leveraging each
countrys experience as we optimize our resources and technology, that called for
leveraging investments in addition to standardizing and streamlining processes across
all geographical locations.
The challenge was to shift from local to global information technology and management
infrastructure.
The approach worked well, but was not ideal because of the slow management reporting
that resulted. Then, Carrefour adopted a new global vision that called for consistent
systems across the entire organization.
setting the following goals: standard financial processes and systems around the world
and in all stores, a global interface model to streamline information flows, and a global
data center to support finance operations.
In order to realize its goal, Carrefour was determined to operate globally with mobile
resources, standard processes and practices, and a common technology support
infrastructure.
To help tackle such a large-scale project, Carrefour chose to work with a limited number
of partners, i
Carrefours new financial information system program Thales, took approximately three
years to complete starting in March 1998 and ending in late 2000. The total project cost
was $170 million. The project entailed redesigning Carrefours accounting processes,
creating a shared service organization to support the business change, and implementing
PeopleSoft Financials in four modules.
Requisitions from the stores are now processed by the shared service center (SSC)
located in each country. The mission of the SSC is to optimize both costs and the
administrative management flow. Through the PeopleSoft purchase order (PO) module

implemented as part of Thales in October 1999, Carrefour created an SSC in each

country for all of the requisitions processed by its stores.
he new purchasing process involves the vendors, stores, and SSCs, or procurement SSC,
located in each country. This center is responsible for the centralized management of
purchases and negotiation with the suppliers. It is part of the assets direction and carries
out the operations that were executed, up to now, in the stores.
The simple fact of using referenceditemsmakestheaccounting,tax,and
payment information reliable from the beginning. This information is then managed
throughout the purchasing process.
The SSCs mission is to optimize purchasing. To do this, it reviews certain requests and
checks the reference of assets. In addition, it checks the justification of generic
requisitions (requisitions made outside the item master file) in order to try to channel
maximum requests towards the item master file. The benefits realized by Carrefour
from Thales include lower operating costs, more efficient streamlined accounting
processes through shared services, and standardization of common processes, systems,
and data across the entire company. Carrefour now has a unique infrastructure and
systems to manage their rapidly expanding finance operations around the world. A
three-and-a-half year payback on a $170 million investment program was anticipated
primarily based on headcount reduction.
These benefits were achieved due to increased efficiency through centralized accounting
functions, reduction of manual work in each store, and facilitation of non-inventory
purchasing negotiation with suppliers.

2- (a)
Explain how Carrefour used IT in Warehouse Management.
Warehouse Management System (WMS)
Orders for Shipment of goods
Radio frequency (RF) scanning
Integration of IT systems
Elimination of expired products
Benefits

Centralization
Time schedule
Better space utilization
Inventory management
Reduced stock levels
Smooth flow
No running out of stock
99.97% inventory accuracy levels
(b)
What elements of Supply chain must a company Customize and what it should
Standardize while managing a global Supply chain?
CUSTOM
Adaptability
Transportation cost
Back office operations
Front office operations
Suppliers
STANDARDIZE
Logistics
Procurement
Warehousing
IT
Information(sharing)

QUESTION 3
(a)
Carrefour is one of the most Global retailers in the world. Prepare a plan for the
company to effectively integrate its supply chain operations across borders.
SCM

Demand forecasting tools

Planning capabilities
SRM Supplier Relationship Management
TMS Transportation Management System
Use of Intranet & Extranet
POS Point of Sale System
BPM Business Process Management
ERP Enterprise Resources Planning
All functional areas
Integrate business functions into 1 information system
(b)
What issues will the company face in integrating its global supply chain operations?
Complexity of Supply Chain Network
Large No. of Suppliers and distributors
Delays due to cross-border problems
Customs, Taxes, Politics
Price fluctuations
Need of IT support for Communication & Collaboration
Complexity
How much differentiation / customization / localization
(c)
and how should it overcome them?
Internet - effective communication enhancer
Share information about consumer demand
Increase speed of processing transactions
Using IT & Softwares
ERP
EDI
Intranet & Extranet