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Wal-Mart and Carrefour Supply Chain Comparison
Leon Liao, Garbour Chen, Alex Liu, Janet You
Supply Chain Strategy
Inventory Management
Logistics and Distribution
Procurement &supplier Management
Technology
Why this Strategy?
World Wide
Walmart rated as No. 4 in the recent Supply Chain Top 25
by Gartner
Carrefour has no such recognition yet
Founded in 1957 in France
Supply Chain Strategy
Walmart
Store formats:
Carrefour
Store formats:
• Wal-mart Discount Stores
• Wal-mart Supercenter
• Neighborhood Market by
Wal-mart
• Super-mer-cado de WalMart
• Market-side
• Sam's Club
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Hypermarkets
Supermarkets
Carrefour mini
Hard discount stores
Convenience stores
Cash & Carry
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Supply Chain Strategy
 Wal-mart
 Carrefour
Centralized,
Decentralized, flexible
standardized, uniform
supply chain.
supply chain.
Focus more on
Every day low prices.
customer’s needs.
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Inventory Management
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.
Inventory Management
CPFR (Collaborative Planning, Forecasting & Replenishment) - Walmart
CRP --Continuous replenishment program
DRP--Distribution Requirements Planning
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
We're all working together; that's the secret – Sam Walton
Inventory Management
ERP - Carrefour
ERP
Delivery
Carrefour
EDI
Supplier
Consumption/
Requirements
MRP, work out
requirements to
supplier (PO)
Production,
delivery
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Inventory Management (CPFR Vs. ERP)
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VMI
Employees convinced
of the benefits of VMI
EDI Standards were set
VMI implementation
decision by top mgmt.
Walmart/Carrefour sends
acknowledgement
Manufacturer gets
credited
POS data sent to
manufacturers
Goods are shipped to
Distribution center
Manufacturer decides
inventory replenishment
Logistics and Distribution
Comparison:
Wal-Mart
Distribution
System
Update
Year
Supply Management
1969
Computer Tracking Inventory
1980
Barcode
1985
Apply EDI in area distribution center
Order Management and Performance
Track order flow
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 deliver
Real 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 system
Availability 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 website
customers can get commodity very easy from
500K skus.
No1 of Top 500 in Fortune. Daily sales to
$1430M on Thanksgiving Day
2002
2003
Promote EDIINT AS2 to set up industry standard
Logistics and Distribution
Cross Docking
Walmart
 Done on 85% goods sold
 Savings of 2-3% on sales
 Continuous
communication needed
Carrefour
 Moving to Cross docking
since 2009
Logistics
andand
Distribution
Wal-Mart
Carrefour Comparison
Wal-Mart
1. Fast and responsive system
2. Company owned transport fleet of 3500
trucks
Carrefour
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
3. Replenish store shelves twice a week
compared to industry average of every 2
weeks
4. Minimizing Pallet size for effective inventory
management
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Logistics
andand
Distribution
Wal-Mart
Carrefour Comparison
Wal-Mart
Carrefour
Store 1
Vendor1
Store 1
Store 2
Vendor2
Store 2
Vendor3
Store 3
Vendor3
Store 3
Vendor…
Store…
Vendor…
Store…
Vendor1
Vendor2
Distribution
Center
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Logistics
andand
Distribution
Wal-Mart
Carrefour Comparison
Wal-Mart
Carrefour
1. Higher pressure to distribution
center: watch out the climate, stock
and vendor delivery very closely to
make sure high stock-in in stores.
1. Shorter lead time to vendors.
2. Better lead time to vendors for
better forecast and order volume.
3. The stores compete with each other
for same resources.
2. Vendors need deal with so many
different stores.
3. Hard to forecast the demand
precisely for different stores.
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Procurement
andand
Vendor
Management
Wal-Mart
Carrefour
Comparison
Wal-Mart
1. Inspect factory with same standard very
strictly to insure higher quality which is
the key for success in long term.
Carrefour
1. Buying agent independently to
purchase for individual store.
2. Saving cost based on target price
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
3. Local resource. Less differentiation
in products.
4. Return goods very convenient for
direct contact with vendor, less
overstock or stock out.
5. Outsource purchasing to Li&Feng for
cost reduction
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Technology
Walmart
 Leader and pioneer in SCM technology
 Was the one who pioneered bar codes in 1984
 Invested $4Billion in building a Retail Link private extranet system
which included the largest privately owned satellite system.
 Invested POS in 1983 and linked with goods replenishment process.
 Start to introduce RFID in 2003
 Transferred from VAN EDI to web EDI in 2003
 Use IBM and SUN as technology partner
Carrefour
 Technology follower
 Generix is the main Supply Chain Software provider. Integration of
3PL and logistics capabilities of Carrefour and suppliers
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Inventory Turnover Comparison
Wal-mart: 7.9
Carrefour 10.4
Industry: 7.5
Why this Strategy- Walmart
1
To achieve the target
that lowest total supply
chain cost in the industry.
2
Focus much on
U.S market as it
account for 70%
of the total sales
turnover.
3
U.S market needs are
huge and almost identity.
3
U.S enterprise pursue
new technology and
willing to take risk.
Why 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 Work
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Alex Liu: Strategy
Janet You: Logistics and Procurement
Garbour Chen: Inventory
Leon Liao: Technology and summary
Q&A
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