"carrefour and unilever deployment of a global supply chain strategy"

"Carrefour and Unilever "Carrefour and Unilever deployment of a Global Supply deployment of a Global Supply

Chain Strategy"Chain Strategy"

Carrefour, a global presence in 26 Carrefour, a global presence in 26 countriescountries

n°1 France

n°1 Spain

n°1 Belgium

n°2 Italy

n°1 Greece

n°1 Brazil

n°1 Argentina

n°1 Taiwan

n°1 Indonesia

• 561 hypermarkets• 1324 supermarkets• 2611 deep discounts stores• 788 other store formats

More than 9000 stores under banner

Unilever at a glanceUnilever at a glance

• We sell our Home & Personal Care and Foods We sell our Home & Personal Care and Foods brands in 150 countriesbrands in 150 countries

• Overall 1999 turnover of US$ 45,790 millionOverall 1999 turnover of US$ 45,790 million

• 43rd by turnover in the Fortune 500 list of largest 43rd by turnover in the Fortune 500 list of largest companies (August 1999)companies (August 1999)

• Recent major acquisitions: Amora Maille (F), Recent major acquisitions: Amora Maille (F), Ben&Jerry’s (USA), Slim Fast (USA), and Ben&Jerry’s (USA), Slim Fast (USA), and Bestfoods (USA) Bestfoods (USA)

Carrefour objectiveCarrefour objective

• No out of stocks on the shelfNo out of stocks on the shelf

• Lowest total inventoriesLowest total inventories

• Faster cycle timesFaster cycle times

• Automation of all information flowsAutomation of all information flows

• Lowest total delivered cost (supplier to shelf)Lowest total delivered cost (supplier to shelf)

The excellence of the supply The excellence of the supply chain:chain:

Carrefour supply chain visionCarrefour supply chain vision

Cross-Cross-dockingdockingplatformplatform

SupplierSupplier StoreStore

NoNoBackrooBackroo

mminventorinventor

yy

NoNoinventorinventor

yy

Daily sales &Daily sales &inventory datainventory data

Daily salesDaily sales& inventory data& inventory data

per storeper store

Integrated information

systemEDI

Continuous replenishment (A to B delivery)

The target organization:The target organization:

One of Carrefour’s Key One of Carrefour’s Key StrategiesStrategies

• More sharing of informationMore sharing of information

• Greater supplier involvement in the replenishment Greater supplier involvement in the replenishment processprocess

• Greater accountability:Greater accountability:– Shared objectivesShared objectives

• Inventory levelsInventory levels

• Cycle timesCycle times

• Service rates, etc, …Service rates, etc, …

– Performance indicators and score cardsPerformance indicators and score cards

Collaborative approach with our suppliersCollaborative approach with our suppliers

Carrefour and UnileverCarrefour and Unilever scope of operations scope of operations

• Commercial relationship in all Carrefour CountriesCommercial relationship in all Carrefour Countries

• Involvement of 57Unilever CompaniesInvolvement of 57Unilever Companies

• Across all Unilever categoriesAcross all Unilever categories

• Mutually important business partnersMutually important business partners

• With a shared ambition for growth and operational With a shared ambition for growth and operational global excellenceglobal excellence

Carrefour & Unilever - A mature Carrefour & Unilever - A mature Supply Chain in EuropeSupply Chain in Europe

• EDI rolled out at 100% in all major countriesEDI rolled out at 100% in all major countries• CMI with common tools and processesCMI with common tools and processes• Building experience with ABC costingBuilding experience with ABC costing• … … and Product Availability & Traceabilityand Product Availability & Traceability

ResultsResults• Improvements in Service levelsImprovements in Service levels• Significant costs reductionSignificant costs reduction• Robustness of operationsRobustness of operations• Better integration of work flowsBetter integration of work flows

Definition of a Global Common Definition of a Global Common Supply Chain StrategySupply Chain Strategy

• Corporate commitment to promote process improvements globally

• Use a standard scorecard to monitor current situation

• Implement Best Practices– EDI– Co managed inventory

• Global roll out plan for overseas regions (Latin America and Asia)

• Close cooperation on plan management

Implementation of the strategy Implementation of the strategy in Asia and Taiwan in particularin Asia and Taiwan in particular

• Asia is the fastest growing Carrefour regionAsia is the fastest growing Carrefour region

• Capabilities and openness on new technologiesCapabilities and openness on new technologies

• Three priority countries:Three priority countries:– TaiwanTaiwan– KoreaKorea– ThailandThailand

• Taiwan the biggest Asian country for CarrefourTaiwan the biggest Asian country for Carrefour»

• An adapted infrastructure for a facilitated roll outAn adapted infrastructure for a facilitated roll out

Row Nb

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IndicatorsIndicator

unitN-1

Target N

To date result

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Dec.

1 - Logistic volumes11 S Turnover M LC(*)

12 S Number of parcels x1000 parcels

13 S Number of orders

14 S Number of parcels per order parcels

2 - Sales competitiveness21 C Purchase price indicator

3 - Administrative performance31 S Billing accuracy %

32 S Number of operationnal EDI messages

4 - Logistic performance4.1 Supplier

411 C Product availability %

412 S Delivery lead time Nb of days

413 C On time deliveries %

414 C Proposal orders modified (CMI) %

4.2 - Carrefour warehouse421 C Product availability %

422 C A to B store deliveries %

423 C Inventory level in days Nb of days

424 C Inventory level in value K LC(*)

425 C Inventory level in pallets Nb of pallets

4.3 - Carrefour store431 C Out of stock on the shelf %



5 - Logistic benefitsC 5.1 - Real operational savingsC 5.2 - Estimated operational saving

* LC : local currency

Supplier ECR Score CardCarrefour - Unilever

ScorecardScorecard

SPECIMEN

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To date result

























ScorecardScorecard

SPECIMEN

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ScorecardScorecard

SPECIMENRow Nb

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414 C Proposal orders modif ied (CMI) %

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ScorecardScorecard

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4 - Logistic performance4.2 - Carrefour warehouse






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ScorecardScorecard

SPECIMEN

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4 - Logistic performance4.3 - Carrefour store

431 C Out of stock on the shelf %



+

PHYSICAL STOCKS

MOVEMENTS

FORECASTS

CARREFOUR STOCK

CLIENT

CLIENT

E.D.I.

ORDERSLEVER STOCK

Physical flow of products

Co-Managed Inventory (CMI)Co-Managed Inventory (CMI)

STOCKS & WHAREHOUSE

MOVEMENTS

DELIVERY ORDER

ORDER

CONFIRMATION

ORDER

PROPOSAL

Supply Chain optimization in Taiwan Supply Chain optimization in Taiwan

very promising resultsvery promising results• Improved service from Unilever to Carrefour’s Improved service from Unilever to Carrefour’s warehousewarehouse– on time deliveries = +7%on time deliveries = +7%– product availability = +20% product availability = +20%

• Increased service from Carrefour ’s warehouse to Increased service from Carrefour ’s warehouse to storesstores– product availability = +11%product availability = +11%

WhileWhile•Reducing stocks by 40%Reducing stocks by 40%

•Reducing delivery lead times by one dayReducing delivery lead times by one day

What is: ?What is: ?

• A stand-alone profit-oriented business :– with its own management team – focused on delivering efficiency to :

• the retail community,• its suppliers

– through the use of internet based transaction and collaboration tools.

• A business whose services are available to all retailers, regardless of equity participation.

• It is not a «central buying office ».

The equity members

Pinault Printemps Pinault Printemps RedouteRedoute

• A global purchase turnover > to US$ 200 billionA global purchase turnover > to US$ 200 billion

• A member’s commitment to bring 70% of this A member’s commitment to bring 70% of this purchase amount on GNXpurchase amount on GNX

The valuable services

Sourcing Suppliers Sourcing Suppliers and Productsand Products

Collaborative Collaborative Product Product

DevelopmentDevelopment Web-Enabled,Web-Enabled,

Dynamic TradingDynamic Trading

Collaborative Collaborative Planning, Planning,

Forecasting and Forecasting and Replenishment Replenishment

(CPFR)(CPFR)

Additional Value Additional Value Added ServicesAdded Services

Communication Tools

CataloguesA

pplic

atio

ns

WorkflowApplications

Unilever: one of the chosen Unilever: one of the chosen partners involved in GNX design partners involved in GNX design

and implementationand implementation

• Prove transaction capabilities on the NetProve transaction capabilities on the Net

• Set up a migration plan from existing EDI to GNXSet up a migration plan from existing EDI to GNX

• Develop a standardized approach for the product Develop a standardized approach for the product catalog with the other GNX partnerscatalog with the other GNX partners

• Build supply chain optimization capabilities (CPFR)Build supply chain optimization capabilities (CPFR)

Taiwan a GNX pilot countryTaiwan a GNX pilot country

• Two pilot countries: France and TaiwanTwo pilot countries: France and Taiwan

• Pilot objective: move EDI communication to Pilot objective: move EDI communication to internet enabled transaction on GNXinternet enabled transaction on GNX

• Steps:Steps:– Prove end to end communication based on new internet Prove end to end communication based on new internet

protocolprotocol– Migrate current EDI messages on GNXMigrate current EDI messages on GNX– Parallel run to test robustnessParallel run to test robustness– Go liveGo live

Potentially:

- All countries

- All suppliers

A view to the future of EDI A view to the future of EDI communicationcommunication

Unileverprivate network

Unilevergateway

Internet

Carrefourprivate network

Carrefourgateway

GNX

SupplierEDI

platform

Supplier

Browser

access

WebEDI

WebEDI

ClassicEDI

ClassicEDI

B2B Hub

Expected benefits from GNXExpected benefits from GNX

• Unify all current processes and toolsUnify all current processes and tools

• Reduce communication costs ( Internet Vs VAN’s)Reduce communication costs ( Internet Vs VAN’s)

• Handle existing EDI flowsHandle existing EDI flows

• Promote the use of common worldwide standardsPromote the use of common worldwide standards

• Use in the future an easily and universally Use in the future an easily and universally understandable language (XML)understandable language (XML)

• Enable access to other GNX functionalityEnable access to other GNX functionality

GNX pilot next stepsGNX pilot next steps

• Roll out of Unilever Carrefour learnings to all Roll out of Unilever Carrefour learnings to all Carrefour countriesCarrefour countries

• Pursue pilot developmentsPursue pilot developments– Product catalogueProduct catalogue– CPFRCPFR

• Carrefour to extend process roll out to all Carrefour to extend process roll out to all supplierssuppliers

GNX a new tool for our Global GNX a new tool for our Global Supply Chain StrategySupply Chain Strategy

• Global transactional capabilitiesGlobal transactional capabilities

• Definition and use of a global communication Definition and use of a global communication standardstandard

• Global data alignment and synchronizationGlobal data alignment and synchronization

• Ability to deploy standard processes globallyAbility to deploy standard processes globally

• Automation of all information flows with suppliers Automation of all information flows with suppliers (including smaller ones) –Web EDI(including smaller ones) –Web EDI

• Advanced Supply Chain collaborationAdvanced Supply Chain collaboration

ConclusionConclusion

• A successful and promising collaboration:A successful and promising collaboration:– A common and consistent strategyA common and consistent strategy– A global roll outA global roll out– Key learning for further implementation (new partners, Key learning for further implementation (new partners,

new countries)new countries)

• GNX, a tool to accelerate such initiativesGNX, a tool to accelerate such initiatives– Most advanced technologyMost advanced technology– Wild range of functionality enabling implementation of Wild range of functionality enabling implementation of

global best practices global best practices

Thank you for your attentionThank you for your attention

"carrefour and unilever deployment of a global supply chain strategy"

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