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Group 9, Sec ACARREFOUR: MANAGING THE GLOBAL SUPPLY CHAIN9A Ankush Singh 15A Deepika Rastogi19A Jatin Khandelwal Mangu Siva Charan 24ARamya Sahiti 35AGawtam Ambati 56AAGENDA Introduction Global Presence Glance at SCM of CarrefourSupply Chain Importance of SSCKPIs for Suppliers Customization & StandardizationA New Initiative Issues and ChallengesKey Learnings To embrace the challenge of building a worldwide company not only geographically international , but truly global in vision , leveraging each countrys experience as we optimize resources and technology- Carrefours Global Vision 2France Based Carrefour is the second largest retailer in the world EXPANSION : Through Inorganic Growth DIVERSIFICATION Introduction

1991 : Acquired two French Hypermarket chains Euromarche and Montlaur

1996 : Acquired Felix Potin (convenience store)

1997 : Acquired Catteau (supermarket chain)

1999 : Acquired French Retail group Promodes to strengthen presence in the domestic marketGLOBAL NETXCHANGE (Internet-based supply exchange joint venture)

Ooshop (Online Shopping)

Carfuel (petroleum products )

Immobiliere Carrefour (real estate)

Providange (Auto Centers)

3Global PresenceStore TypeNumberSuper markets 3115Hypermarkets1459Convenience stores6111Cash and carry stores175Store Wise PresenceRegion Wise SalesRegion Wise StoresCarrefour at a Glimpse

ProcurementSupply Chain (1/3)Direct procurement strategy: Acquiring food products and other goods directly from local manufacturers

Developing countries- sourcing from local manufacturers stands at 90% of all products in a store

Used EDI (electronic data interchange) for linking stores, warehouses and suppliers through computer networks initially , to receive orders from stores and dispatch notices from warehouses.

Installed separate IT software applications in various countries, but lack of application integration created problems in financial reporting and order procurement

To overcome this problem Carrefour initiated a project known as THALES which sought to develop common accounting and information system platform by creating SSCs (shared service center's)

6LogisticsSupply Chain (2/3)In major countries where Carrefour operated , they had put in place State of the art logistics infrastructure comprising import platform, separate warehouses for groceries and non edible items , splinter platforms fro the movement of fresh products

Carrefour hired local 3PL solution providers to manage logistics

Underwent restructuring of logistics operations in 1990s

This enabled Carrefour to launch an A for A order system for food items

Cross Docking was used at distribution centers

Inventory handling and storage costs were reduced substantially- Cross Docking

7WarehouseSupply Chain (3/3) Hired local third party supply chain solutions provider in each country Brazil- WMS(warehouse management system) Service provider- take orders and schedule deliveries from warehouse to stores and get in touch with suppliers regarding shipment of goodsThe barcoded products entering the warehouse- scanned by a radio frequency scanning equipment to confirm their entryMonitoring warehouse without paperwork- Integrating IT systems at warehouse with those of the companyCentralization of distribution and warehousing- reduced stock levels and allowed greater variety of goods

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To control the movement and storage of materials within awarehouseand process the associated transactions, including shipping, receiving, put away and pickingImportance of SSCThales Project- SSC has become a common interaction platform for stores and suppliersBenefitsUsage in Warehouse ManagementOrders from all the stores are placed at once resulting in lesser invoices Easier flow of information across global supply chainTransparency in financial transactions involving accounting, tax, payment etcReduced operating costs primarily through reduced labor costsBy placing consolidated orders, it was able to bargain for better price discountsIT system at warehouse managed by 3PSCIntegratedIT systems at CarrefourIt used Warehouse Management System of 3PSC solutions provider

So integration of IT systems at warehouse with the IT systems at Carrefour, able to monitor all activities regarding warehouse management3PSC commercial ship operator

Thale10

Carrefour

Carrefour sends acknowledgementPerformance Indicators for Evaluation of Suppliers Anextranetis a website that allows controlled access to partners, vendors and suppliers or an authorized set of customers - normally to a subset of the information accessible from an organization's intranet.12Standardization- Purchasing and Supply Chain IntegrationPurchasing: Standardized

WhyMonitoring procurement processEnhancing transparencyEfficient tender evaluationSolving legal problems

As these operations enables Carrefour to have a standardized procurement processIntegration : StandardizedWhyAn integrated supply chain will coordinate order fulfilment to match actual consumption at the end of the supply chainsynchronise suppliers production to ensure the timely delivery Coordination among independent firms such as suppliers, distributors, 3PL, warehouses, stores is the key to attaining flexibilityCustomization- Store FormatsChina- CarrefourOriginal plan- to open 10,000 square foot shops, but after taking local specifics into account, the shops were resized into 3,000 square meter formatCarrefour differentiated selling practices- selling of fish had two modes: selling alive fish- for coastal citiesselling frozen fish- for inland locationsCarrefour adopted the Chinese customers to their practices- wine taxes in China went down- free wine seminars and tastings- how to drink wine and the value of it- introduced French wine later

Customization- Merchandise MixChina- CarrefourUnlike Walmart, Carrefour customized its merchandise mix through inorganic alliances with Lianhua (local Chinese supermarket chain)Traditional Chinese products- available in Carrefours Merchandise mixObtained the information from strategic alliances and local consumer behaviour

Carrefour- ChinaCarrefour- FranceNew Initiative- Improve Supply Chain Integration

Tie up with See Beyond- Installation of Integrated Composite Application Network (ICAN) softwareIntegration of stores, distribution centres and supply chain partnersAdapt itself to local conditionsICAN (uses internet) replaced VAN EDI system (used high- value networks)Benefits:Reduce CostsEnhanced business in foreign countriesIssues and ChallengesBusiness micro environmentBusiness macro environmentTechnical challengesSupply Chain Integration ChallengesBusiness process integrationSupplier competence requirementsGlobalization

Data and information integrationApplication integrationExtranet adoption challengesStrategy and PlanningCustomer order managementLogistic managementOperation flexibilityProcurement managementEnterprise Integration

Anextranetis a website that allows controlled access to partners, vendors and suppliers or an authorized set of customers - normally to a subset of the information accessible from an organization's intranet.17Key Learnings Seed to Growth and Global is Inorganic

Institutional of Shared Service Centers to conduct purchasing and management of suppliers from a single location

Use of Cross Docking and RFID to transport goods quickly from warehouse to retail stores

A Stringent Quality Considerations and KPIs for suppliers ensures provision of great customer satisfaction

Outsourcing is the Key : Reliance on 3rd party logistic providers to manage global supply chains