Carrefour Managing the Global Supply Chain

Presented By:Himanshu Pachori Sachin Narang Robin Barua Anisha

Issues
The global Supply Chain Management practices of a
leading retail. The need for customizing a companys Supply Chain Operations according to the various countries in which it operates.

Introduction
Finance based Carrefour Group ,the second largest retailer
in the world embarked upon a $170 million project to standardize its business activities. The project involved the institution of Shared Service Centers (SSCs) in each country in which the company operated so that various activities such as purchasing and management of suppliers could be conducted at a single location. The company used Cross Docking and Radio Frequency equipment to transport the goods quickly from warehouses to the retail stores.

Background Note
The first Carrefour retail store was established in 1959 at
the convergence of five roads in Annecy, near Paris in France by Marcel Fournier and Louis Defforey. Carrefour had established a total of 5,709 stores globally, including 720 hypermarkets, 1,426 supermarkets, 3,228 discount stores, 165 convenience stores and 170 cash-andcarry stores under various brand names.

Managing the Supply Chain

Procurement
Carrefour followed a Direct Procurement Strategy. Local purchases enabled the company to keep its costs low as well as shorten its Supply Chain. In Japan, Carrefour depended on wholesalers for almost 40% of the items. Carrefour uses Electronic Data Interchange for Procurement to receive orders from the stores and receive dispatch notices. Carrefour initiated a project known as THALES that sought to develop a common accounting and information system platform by creation of Share Service Centers (SSCs) in all the countries in which it operated. The SSCs facilitated easier flow of information across the global Supply Chain and created a global data center that aided financial operations.

Logistics Management
The company had put in place state-of-the-art Logistics
infrastructure, comprising import platform, separate warehouses for groceries and non-edible items ad splinter platforms that managed the movement of fresh products.
Carrefour sought to reduce transport costs sos as to pass on the savings to its customers in form of reduced product sale prices. To handle Logistics Carrefour hired a third party Logistics solution provider as they have better understanding of market and are better equipped to deal with local conditions.

Contd
Carrefour launched an A for A order system for food items.
Under this system, stores which were close to the warehouses placed the orders in the morning and received the delivery of the products by afternoon and the stores located far off from the warehouses received delivery next morning. Cross docking enabled Carrefour to replenish stocks at the stores quickly.

Warehouse Management
Company usually hired a leading third party supply chain
solutions provider which was well versed with local conditions. For instance, In Brazil, Carrefour hired COTIA PENSKE.
PENSKE developed a warehouse management system in association with a Brazilian vendor. With the help of WMS, PENSKE could take orders, schedule deliveries from the center to the stores and get in touch with suppliers regarding shipment of goods.

Contd
The barcoded products entering the center were scanned by a
Radio Frequency scanning equipment to confirm their entry in to the center and record product details.
By integrating the IT systems at the center, Carrefour was able to closely monitor all these activities. The product data captured through barcode scanners enabled Carrefour to remove those products that had crossed their expiry dates Carrefour was closely followed all logistics and Warehouse Management activities on a regular basis.

The New Initiative

Carrefour tied up with See Beyond to install Integrated Composite Application Network (ICAN) software. By implementing ICAN, Carrefour aimed at integrating its stores, distribution centers, and supply chain partners in various countries.

The implementation of ICAN started with a B2B project to replace the existing VAN EDI system related to logistics, invoice,, distribution and inventory management between Carrefour and its global supply chain partners.

Ques1. How Shared Service Centers (SSCs) helped the

company streamline its procurement process ?
Ans. The SSCs acted as a common interaction point between the
stores and the suppliers . They supplied the stores with detailed product catalogues and information related to the products sold by the suppliers. They also kept in touch with the suppliers about their order status . All store managers had to place their orders at the SSCs located in their country. The electronic catalogue was regularly updated by all the SSCs comprised product and price lists of thousands of products supplied by the authorized suppliers of Carrefour. The order received from all SSCs were then combined and a consolidated order form was sent to the concerned suppliers. The suppliers then shipped the goods to the various individual stores as per the terms agreed upon.

Ques2. Explain how Carrefour used IT in

warehouse management ?

Ans. IT helped Carrefour in warehouse management

by monitoring all the activities like stock availability, stock requirement, inventory management etc.

Thank you