Carrefour: Managing the Global Supply Chain

            
 
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Case Details:

Case Code : OPER033
Case Length : 12 Pages
Period : 1990 - 2003
Organization : Carrefour
Pub Date : 2004
Teaching Note :Not Available
Countries : France
Retail ing

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"To embrace the challenge of building a worldwide company, not only geographically international, but truly global in vision, leveraging each country's experience as we optimize our resources and technology."1

- Carrefour's Global Vision, Annual Report 1997.

"Carrefour is the world's most successful international retailer. Wal-Mart has no track record outside North America."2

- Jaime Vasquez, an industry analyst at Salomon Smith Barney (SSB) in London.

Introduction

In the late 1990s, France based Carrefour Group (Carrefour), the second largest retailer in the world (Refer Exhibit I for the company's financial performance) embarked upon a $170 million project to standardize its business systems and processes across the world.

Among other 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. Analysts said that by establishment of SSCs, Carrefour would be able to significantly improve the efficiency of its supply chain.

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Carrefour used advanced technology to manage its various supply chain processes including procurement, logistics and warehouse management. The company used cross docking and radio frequency equipment to transport the goods quickly from warehouses to the retail stores.

Carrefour also embarked upon an exercise to centralize its procurement and distribution activities in the late 1990s. This exercise covered all its global operations so as to reduce costs and enhance distribution efficiency.

The company relied on third-party logistics providers (3PLs) to manage its supply chain in most of its global operations.

It had global and regional tie ups with reputed firms for this purpose. Analysts felt that by managing its global supply chain operations well, Carrefour had emerged as one of the leading retailers in the world.

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1]  As quoted in the article, "Global Shared Services Case Study - Carrefour," by Tony Masella, posted on www.cfoproject.com, dated October 1, 2002.

2] As quoted in the article "Who's Afraid of Wal-Mart?" by Richard Tomlinson, Fortune, June 26, 2000.

 

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