Post on 20-May-2015
Wal-Mart and Carrefour Supply Chain Comparison
Leon Liao, Garbour Chen, Alex Liu, Janet YouLeon Liao, Garbour Chen, Alex Liu, Janet You
PK
Supply Chain Strategy
Inventory Management
Logistics and Distribution
Procurement &supplier Management
Why this Strategy?
Technology
World WideWorld Wide
Walmart rated as No. 4 in the recent Supply Chain Top 25 by GartnerCarrefour has no such recognition yet
2,100,000
Employees2,100,000
Employees
Fleet of 3500
owned TrucksFleet of 3500
owned Trucks
80 Distribution Centers80 Distribution Centers
Most Technologically
advanced SCMMost Technologically
advanced SCM
Profit of $14 BillionProfit of $14 Billion
Sales of $405 Billion
(More than GDP of 160
countries)
Sales of $405 Billion
(More than GDP of 160
countries)
8500 Stores worldwide
in 14 nations8500 Stores worldwide
in 14 nations
495,000
Employees495,000
Employees
Profit of 3 Billion EuroProfit of 3 Billion Euro
Sales of 85 Billion EuroSales of 85 Billion Euro
12000 Stores
worldwide in 34 nations12000 Stores
worldwide in 34 nations
Founded in 1957 in France3PL Logistics3PL Logistics
66
Supply Chain StrategySupply Chain Strategy
WalmartWalmartStore formats:Store formats:
• Wal-mart Discount StoresWal-mart Discount Stores• Wal-mart SupercenterWal-mart Supercenter• Neighborhood Market by Neighborhood Market by
Wal-martWal-mart• Super-mer-cado de Wal-MartSuper-mer-cado de Wal-Mart• Market-sideMarket-side• Sam's ClubSam's Club
CarrefourCarrefourStore formats:Store formats:
HypermarketsHypermarkets Supermarkets Supermarkets Carrefour miniCarrefour mini Hard discount storesHard discount stores Convenience storesConvenience stores Cash & CarryCash & Carry
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Supply Chain StrategySupply Chain Strategy
Wal-martWal-mart
Centralized, Centralized, standardized, uniform standardized, uniform supply chain.supply chain.
Every day low prices.Every day low prices.
CarrefourCarrefour
Decentralized, flexible Decentralized, flexible supply chain.supply chain.
Focus more on Focus more on customer’s needs.customer’s needs.
Inventory ManagementInventory ManagementCPFR (Collaborative Planning, Forecasting & Replenishment)CPFR (Collaborative Planning, Forecasting & Replenishment)
CPFR provides templates for supply chain partner collaboration. The process model at below is segmented into three stages. The planning stage establishes and updates the relationship; the sales forecasting and order replenishment stages occur more frequently.
An important premise of this model is that accuracies in the forecast can be improved by having the customer and supplier participate in the forecast.
Started in 1997-98 with pilot project with Sara Lee increasing sales by 32%
Massive improvement ( from 89% to 97%) of in-stock items
Lead times reduced from 21 days to 11 days
Implementation was costly and required huge analytics
Can be implemented with Large Suppliers
CRP --Continuous replenishment programDRP--Distribution Requirements Planning
Inventory ManagementInventory ManagementCPFR (Collaborative Planning, Forecasting & Replenishment) - WalmartCPFR (Collaborative Planning, Forecasting & Replenishment) - Walmart
1010
Consumption/Requirements
MRP, work out requirements to supplier (PO)
Production, delivery
SupplierSupplier
Carrefour EDI
Delivery
ERP
Inventory ManagementInventory ManagementERP - CarrefourERP - Carrefour
1111
Inventory Management (CPFR Vs. ERP)Inventory Management (CPFR Vs. ERP)
VMIVMI
VMI implementation decision by top mgmt.
VMI implementation decision by top mgmt.
Employees convinced of the benefits of VMIEmployees convinced of the benefits of VMI EDI Standards were
setEDI Standards were
set
POS data sent to manufacturers
POS data sent to manufacturers
Manufacturer decides inventory replenishment
Manufacturer decides inventory replenishment
Goods are shipped to Distribution center
Goods are shipped to Distribution center
Walmart/Carrefour sends
acknowledgement
Walmart/Carrefour sends
acknowledgement
Manufacturer gets credited
Manufacturer gets credited
Logistics and Distribution
Comparison:Wal-MartDistributionSystemUpdate
Year Supply Management Order Management and Performance
1969 Computer Tracking Inventory
1980 Barcode Track order flow
1985 Apply EDI in area distribution center
1986
1988 Fully apply EDI. 1st using of satellite system, scanner
1989 72 hours delivery
1990 IT vendor has access to website for sales info.
1992 24 hours deliverReal time information for better communication
1995 Reduce staff Quicker response in supply chain
1997 Real Time Sales and Inventory Data
1998 Auto supply chain for small/local vendor
1999 Effective customer feedback systemAvailability for customer shopping information to sales managers with vedio
2000 Increase 570% for website inquiry daily sales to $1100M on Thanksgiving Day
2001 Run updated websitecustomers can get commodity very easy from 500K skus.
2002 No1 of Top 500 in Fortune. Daily sales to $1430M on Thanksgiving Day
2003 Promote EDIINT AS2 to set up industry standard
Cross DockingCross DockingWalmartWalmartDone on 85% goods soldDone on 85% goods soldSavings of 2-3% on sales Savings of 2-3% on sales Continuous Continuous communication neededcommunication needed
CarrefourCarrefourMoving to Cross docking Moving to Cross docking since 2009since 2009
Logistics and Distribution
1515
Wal-Mart and Carrefour Comparison
1. Fast and responsive system
2. Company owned transport fleet of 3500 trucks
3. Replenish store shelves twice a week compared to industry average of every 2 weeks
Wal-Mart
1. Uses 3PL when venturing into countries outside Europe like Brazil and China.
2. Move to “River and Rail” transport to reduce truck mileage and safeguard the environment.
3. Average inventory is 37 days of COGS
4. Minimizing Pallet size for effective inventory management
Carrefour
Logistics and Distribution
1616
Wal-Mart and Carrefour Comparison
Wal-Mart Carrefour
Vendor1
Vendor2
Vendor3
Vendor…
DistributionCenter
Store 1
Store 2
Store 3
Store…
Vendor1
Vendor2
Vendor3
Vendor…
Store 1
Store 2
Store 3
Store…
Logistics and Distribution
1717
Wal-Mart and Carrefour Comparison
1. Higher pressure to distribution center: watch out the climate, stock and vendor delivery very closely to make sure high stock-in in stores.
2. Better lead time to vendors for better forecast and order volume.
3. Hard to forecast the demand precisely for different stores.
Wal-Mart
1. Shorter lead time to vendors.
2. Vendors need deal with so many different stores.
3. The stores compete with each other for same resources.
Carrefour
Logistics and Distribution
1818
Wal-Mart and Carrefour Comparison
1. Inspect factory with same standard very strictly to insure higher quality which is the key for success in long term.
2. Purchasing center to source all goods to insure the efficiency and cost control
3. Better negotiable power for bigger quantity
4. Lower price to customers
5. Outsource purchasing to Li&Feng for cost reduction
Wal-Mart
1. Buying agent independently to purchase for individual store.
2. Saving cost based on target price
3. Local resource. Less differentiation in products.
4. Return goods very convenient for direct contact with vendor, less overstock or stock out.
Carrefour
Procurement and Vendor Management
TechnologyTechnology
1919
WalmartWalmartLeader and pioneer in SCM technologyLeader and pioneer in SCM technologyWas the one who pioneered bar codes in 1984Was the one who pioneered bar codes in 1984Invested $4Billion in building a Retail Link private extranet system Invested $4Billion in building a Retail Link private extranet system which included the largest privately owned satellite system.which included the largest privately owned satellite system.Invested POS in 1983 and linked with goods replenishment process.Invested POS in 1983 and linked with goods replenishment process.Start to introduce RFID in 2003Start to introduce RFID in 2003Transferred from VAN EDI to web EDI in 2003Transferred from VAN EDI to web EDI in 2003Use IBM and SUN as technology partnerUse IBM and SUN as technology partner
CarrefourCarrefour
Technology followerTechnology followerGenerix is the main Supply Chain Software provider. Integration of Generix is the main Supply Chain Software provider. Integration of 3PL and logistics capabilities of Carrefour and suppliers 3PL and logistics capabilities of Carrefour and suppliers
Inventory Turnover ComparisonInventory Turnover Comparison
Wal-mart: 7.9 Carrefour 10.4 Industry: 7.5
Why this Strategy- WalmartWhy this Strategy- Walmart
1
To achieve the target that lowest total supply chain cost in the industry.
2 3
U.S market needs are huge and almost identity.
3
U.S enterprise pursue new technology and willing to take risk.
Focus much on U.S market as it account for 70% of the total sales turnover.
Why this Strategy-CarrefourWhy this Strategy-Carrefour
1
To build flexible and customer focused supply chain to compete in the global market.
2
Carrefour operates in three major markets: Europe, Latin America and Asia. With a presence in 34 countries, over 57% of group turnover derives from outside France.
3
Carrefour’s main market varies a lot as it comes from different country, culture, and purchasing power.
3
Europe enterprise are usually conservative and respect tradition.
Team WorkTeam Work
Alex Liu: Strategy Alex Liu: Strategy Janet You: Logistics and ProcurementJanet You: Logistics and Procurement Garbour Chen: InventoryGarbour Chen: Inventory Leon Liao: Technology and summaryLeon Liao: Technology and summary
Q&AQ&A
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