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Walmart and carreford_v3

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  • 1. Leon Liao, Garbour Chen, Alex Liu, Janet You Wal-Mart and Carrefour Supply Chain Comparison PK
  • 2. Supply Chain Strategy Inventory Management Logistics and Distribution Procurement &supplier Management Why this Strategy? Technology
  • 3. World Wide Walmart rated as No. 4 in the recent Supply Chain Top 25 by Gartner Carrefour has no such recognition yet
  • 4. 2,100,000 Employees Fleet of 3500 owned Trucks 80 Distribution Centers Most Technologically advanced SCM Profit of $14 Billion Sales of $405 Billion (More than GDP of 160 countries) 8500 Stores worldwide in 14 nations
  • 5. 495,000 Employees Profit of 3 Billion Euro Sales of 85 Billion Euro 12000 Stores worldwide in 34 nations Founded in 1957 in France 3PL Logistics
  • 6. Supply Chain Strategy Walmart Store formats: Wal-mart Discount Stores Wal-mart Supercenter Neighborhood Market by Wal-mart Super-mer-cado de Wal-Mart Market-side Sam's Club Carrefour Store formats: Hypermarkets Supermarkets Carrefour mini Hard discount stores Convenience stores Cash & Carry
  • 7. Supply Chain Strategy Wal-mart Centralized, standardized, uniform supply chain. Every day low prices. Carrefour Decentralized, flexible supply chain. Focus more on customer’s needs.
  • 8. 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.
  • 9. Inventory Management CPFR (Collaborative Planning, Forecasting & Replenishment) - Walmart 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 program DRP--Distribution Requirements Planning
  • 10. Inventory Management ERP - Carrefour Consumption/Requirements MRP, work out requirements to supplier (PO) Production, delivery Supplier Carrefour EDI Delivery ERP
  • 11. Inventory Management (CPFR Vs. ERP)
  • 12. VMI VMI implementation decision by top mgmt. Employees convinced of the benefits of VMI EDI Standards were set POS data sent to manufacturers Manufacturer decides inventory replenishment Goods are shipped to Distribution center Walmart/Carrefour sends acknowledgement Manufacturer gets credited
  • 13. Logistics and Distribution Comparison: Wal-Mart Distribution System Update 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 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. 2002   No1 of Top 500 in Fortune. Daily sales to $1430M on Thanksgiving Day 2003 Promote EDIINT AS2 to set up industry standard  
  • 14. 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 and Distribution
  • 15. Wal-Mart and Carrefour Comparison Fast and responsive system Company owned transport fleet of 3500 trucks Replenish store shelves twice a week compared to industry average of every 2 weeks Wal-Mart Uses 3PL when venturing into countries outside Europe like Brazil and China. Move to “River and Rail” transport to reduce truck mileage and safeguard the environment. Average inventory is 37 days of COGS Minimizing Pallet size for effective inventory management Carrefour Logistics and Distribution
  • 16. Wal-Mart and Carrefour Comparison Wal-Mart Carrefour Vendor1 Vendor2 Vendor3 Vendor… Distribution Center Store 1 Store 2 Store 3 Store… Vendor1 Vendor2 Vendor3 Vendor… Store 1 Store 2 Store 3 Store… Logistics and Distribution
  • 17. Wal-Mart and Carrefour Comparison Higher pressure to distribution center: watch out the climate, stock and vendor delivery very closely to make sure high stock-in in stores. Better lead time to vendors for better forecast and order volume. Hard to forecast the demand precisely for different stores. Wal-Mart Shorter lead time to vendors. Vendors need deal with so many different stores. The stores compete with each other for same resources. Carrefour Logistics and Distribution
  • 18. Wal-Mart and Carrefour Comparison Inspect factory with same standard very strictly to insure higher quality which is the key for success in long term. Purchasing center to source all goods to insure the efficiency and cost control Better negotiable power for bigger quantity Lower price to customers Outsource purchasing to Li&Feng for cost reduction Wal-Mart Buying agent independently to purchase for individual store. Saving cost based on target price Local resource. Less differentiation in products. Return goods very convenient for direct contact with vendor, less overstock or stock out. Carrefour Procurement and Vendor Management
  • 19. 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
  • 20. Inventory Turnover Comparison Wal-mart: 7.9 Carrefour 10.4 Industry: 7.5
  • 21. Why this Strategy- Walmart Focus much on U.S market as it account for 70% of the total sales turnover. 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.
  • 22. 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.
  • 23. Team Work Alex Liu: Strategy Janet You: Logistics and Procurement Garbour Chen: Inventory Leon Liao: Technology and summary
  • 24. Q&A

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