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Carrefour: Managing the

Global Supply Chain

Maastricht University
School of Business & Economics
Date:
6.1.2015
Name, initials:
Manuel Peralta Recart

About Carrefour

ID number:

6119255

Course :

Global Supply Chain

Tutor name:
Course code:

Management
Janina Nowak
EBC2030

The SSCs solved the lack of integration in the global supply chain.Carrefour S. increasing the interaction between stores and suppliers. Asia. Case Summary The case is centered in how Carrefour invested on a $170 million project to standardize their business systems and processes through their stores across the globe. Questions for discussion. warehouse management and logistics. and by developing a common accounting and information system platform. Carrefour also had a proper use of IT in order to enhance the efficiency in their supply chain especially in procurement. To do this Carrefour elaborated some key activities like involving shared service centers (SSCs) in order to increase the efficiency of their supply chain through centralizing the procurement activities. Denis Defforey and Jaques Defforey (Carrefour. n. Carrefour operates in Europe.d. . They started operating in January 1958 in a suburban area of Paris. Latin America and the Caribbean.A is a French retailer with a global coverage and also one of the largest retail groups in the world. Africa. France by Marcel Fournier.).

reduce the time spent on reading and reduce risks associated with errors made by individuals (Stehle. One of them was the mechanization of procurement process. Initially Carrefour operated with an Electronic Data interchange for the procurement of goods.d. with this it easier to handle the information. Also the orders they received in the different SSCs were combined and together they elaborate a final order. Explain how shared service centers (SSCs) helped the company streamline its procurement process. and also provide catalogues and useful information for the suppliers. processes and operations because they faced the problem of missing an integrated IT in their supply chain. they provided an electronic catalogue that included all the products they supplied in each and every one of the stores worldwide with their corresponding price. Through this they had a better control of the information and they could manage it in the most accurate way. Lesser documentation also decreases considerably the operation cost.1-In tune with its global vision. That project focused on developing a common accounting and information system platform that would highly contribute solving the IT difficulties of the company. There are multiple benefits with the automation of the procurement process. . The Thales project was centered in developing shared service centers in all of the countries in which they operated. n. mainly because it reduces the labor cost and paperwork. Carrefour streamlined and standardized its supply chain processes in various countries. But in the mid 1990s when they started their aggressive expansion they needed to standardize their business systems. For that reason they came up with the solution of developing the “Thales” project. As mentioned before.). The SSCs are where the interaction takes place between shops and suppliers. The SSCs came along with multiple benefits for Carrefour. One of them is reducing the documentations.

IT can be considered as the processing of information using computers. Applying IT facilitates the management and coordination of activities between supply chain members (Ghorban. The use of IT totally restructure the previous supply chain models used in the 80s and 90s. schedule deliveries from the warehouse to the stores and monitor the delivery. Information is now observable. 2011).Explain how Carrefour used IT in Warehouse Management. n. . Technology plays a key role when keeping the correct amount of stock in stores and the lowest possible inventory levels in the warehouses.d. clear and accurate for their stakeholders (Stehle. 2011). reaching higher level of effectiveness due to decreasing inventory and distribution costs and mistakes. fax or other messaging platforms. Even communicating was much more complicated than now with the use of e-mail. 2. IT also contributes considerably in the flow of data and goods across the supply chain. and therefore decrease costs leading to a competitive advantage (Ghorban. Carrefour used the IT in Warehouse Management through Warehouse Management System (WMS). This improves the quality of the relation with the stakeholders and as a consequence the trust. This system also contributes optimizing stock retention in warehouses due to the information provided by the IT platform. Retailers such as Carrefour integrate IT systems that optimize processes in their supply chain. therefore IT is definitely a requisite to be competitive in the market. Using IT makes the transfer of information much faster that in the last decades paper based transfer of information. Integrating IT in the correct way can considerably improve the supply chain and operations effectiveness of companies. with this they could take orders.1.Also with automation improves the transparency of the company. Therefore SSCs considerably helped Carrefour streamlining in their procurement processes because they were able to communicate and collaborate in a more effective way with the suppliers they have worldwide.).

For that reason they must be informed and have a quick response when new trends are coming up. 2014). Keeping tracked the products facilitate a smooth and monitored distribution and as a result they reduce the wasted time that they spend communicating by telephone or fax as they did in past decades(Ghorban.97% applying this tracking system. To conclude applying IT in the warehouse management system optimize the receipt.Carrefour used IT also through radio frequency scanning equipments in their products to keep them tracked. Every year new technologies are coming up and some firms are leaving behind because they cannot catch up to the requirements of the industry to stay competitive. that allowed to monitor their supplies closely from the warehouse to the final delivery destination. this because they can detect when one of the stores is about to run out of stock and they can act before it becomes a problem. that is why . As we can appreciate using IT in warehouse management can be really useful and can provide multiple benefits to the company. The management of the inventory in stores also improves. They equipped their products with bar-codes. Optimizing the space utilization in the warehouses is also relevant. 2011). 2. Carrefour was benefited also from implementing IT in their supply chain through optimizing their time management.2 What elements of Supply chain must a company Customize and what it should standardize while managing a global Supply chain? Companies nowadays must customize some of the elements in their supply chain in order to stay competitive. Companies must be adaptable. this because an appropriate tracking decrease the stock levels and therefore they can optimize the space utilization. storage and move of the goods to a warehouse or to stores. The accuracy level of the inventory increased into a 99. they must have the ability to be flexible and be able to adjust to changes and requirement of the market as also shifts in technology (Yashada.

Standardizing the warehouse management systems is also important because enables the company to keep a set level of inventory and decreases the chances of overstocking or of stores running out of stock and facilitate the information sharing to stakeholders. Finally we can appreciate that standardizing is more suited for global issues of the company while customization is more suited for local issues. it provides a parameter of how will companies execute their supply chain in different circumstances. For that reason they will need to constantly be informed and looking for new alternatives to keep to costs low and optimize the flow of the processes. When standardizing the procurement processes the suppliers will have the requirement of providing their goods on time and with the required quality. 2014). This contributes decreasing costs and achieving global economies of scale. To achieve a global supply chain it is a requirement that companies have standardized processes so they can perform their logistics in the cheapest and faster way through the different countries. Standardizing is the process where companies establish norms and regulations through documenting them (Yashada. However. Global IT standards contribute on reducing the cost of operations. companies nowadays also need to standardize some elements of their supply chain in order to stay competitive. Keeping a standardized IT system is highly relevant for organizations. Also standardizing IT increase the reliability and transparency of the firm in a way that having the processes already established across the globe ensure a quality supply chain in the countries that the firm perform (Yashada. procurement and warehousing. In addition. A global supply chain company face multiple laws and regulation through the different countries and with it different customs and transportation costs. mainly because the technological system is already developed and decrease the amount of labor work.is highly relevant that companies develop in a continuous improvement environment (Yashada. 2014). . Companies must standardize some of their elements among them the logistics. Logistic processes of the supply chain must be standardized in order to keep all the distribution channels working in the optimum way. 2014).

In the Carrefour supermarkets of some countries the products that are procured locally can reach even 90% of the whole store. It’s highly relevant to earn the trust of them and keep them satisfied with their requirements all the time and also by providing them clear and reliable information about the business (Awad & Othman. 2010).1 Carrefour is one of the most Global retailers in the world. In order to achieve that.3. determining if the goals are being achieved or if they need to improve the strategy if they are not. providing goods according to the local trends across the different countries where they are present (Awad & Othman. Doing this they have a shorter supply chain and keep to costs lower. They will need to communicate to the stakeholders if something goes wrong and provide an effective solution to the problem. Carrefour will additionally need a IT system that monitor the performance of the stores. They will need to be constantly aligned with the market needs. To be able to accomplish that they need flexible supply chain processes. In order to effectively elaborate an integrated global supply chain they must be able to integrate different stakeholder and processes into one functioning system (Awad & Othman. that is the reason why Carrefour adapts to the requests of every country by keeping a 3PL outsourcing strategy. Prepare a plan for the company to effectively integrate its supply chain operations across borders. Also they must keep a technological system that optimizes the logistics of they supply chain in order that the transportation of goods is done in the most efficient way (Awad & Othman. Carrefour will have to face some challenges in order to stay competitive. That reflects that every country have different cultures and consume different things. . 2010). To effectively integrate a global supply chain they have to keep a good relation with the suppliers. 2010). 2010).

Carrefour managed around 12. Local companies going on strike can be a challenge for the company because it will disrupt the supply chain. 201).3. For instances.2-What issues will the company face in integrating its global supply chain operations? And how should it overcome them? Carrefour keep growing every year and facing a competitive market. therefore opening new stores will increase the suppliers and distributors network. Other challenge that Carrefour can face with their suppliers in their global supply chain operations is through delays and interruptions in their processes.000 stores on 2014 and it is highly probable that they will keep on opening stores and consequently the complexity of their supply chain network will increase also. In occasions. Dealing with multiple suppliers in different parts of the world can be a serious problem. The policies of the countries can be a problem also because new regulations and policies can interrupt the production of some product and will disrupt the supply chain in that way(Awad & Othman. customs can complicate the exportations of Carrefour white labels that will be soon delivered into each supermarket across the globe. For that reason it is necessary to have mitigation strategies to reduce of those risks. 201). suppliers do not provide the goods on time or either product do not reach the quality standards required. In order to avoid a threat in the supply chain they will need backup strategies that reduce the impact of situation and keep the processes as smooth as possible. Also they can face problem with the local economies and policies of each country. For that reason managers have to make sure of finding reliable suppliers that provide a consistent service of quality in order to keep their processes successful (Awad & Othman. Economies and policies may even cause the bankrupt of one of the suppliers. for that reason they will face some problems related with their global supply chain operation. That is why it is essential that Carrefour manage IT in a way that support communication and global supply chain operations will require a high level of communication to remain competitive . Carrefour work mainly with local suppliers across the globe. As mentioned before.

com/content/history Ghorban.carrefour. H. March 17). Standardization and customization. T. Retrieved from http://es. Retrieved from http://www.iaeng. How Technology Can Ease Supply Chain Management and Mitigate Risk.).slideshare.com/content/general-scm/quality-metrics/singlearticle-page/article/how-technology-can-ease-supply-chain-management-andmitigate-risk/ Stehle. by Tina Stehle.pdf Carrefour.supplychainbrain.. Supply chain integration: definition and challenges. & Othman. (2011.org/publication/IMECS2010/IMECS2010_pp405-409.net/Hjyotsana/standardization-and-customization .).com/business_review/2044/topfive-reasons-to-automate-inventory-and-procurement Yashada. Retrieved from http://www. Retrieved from http://hotelexecutive. (n. M. CARREFOUR > Group > History.d. January 1). Retrieved from http://www.References Awad.d. P. Top Five Reasons to Automate Inventory and Procurement. (2014. M. (n. (201. August 29).