Carrefour and Unilever deployment of a Global Supply

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

Carrefour, a global presence in 26 countries n° 1 France n° 1 Spain n° 1 Belgium n° 1 Greece n° 1 Taiwan n° 2 Italy n° 1 Brazil n° 1 Argentina n° 1 Indonesia • 561 hypermarkets • 1324 supermarkets • 2611 deep discounts stores • 788 other store formats More than 9000 stores under banner

Unilever at a glance • We sell our Home & Personal Care and Foods brands in 150 countries • Overall 1999 turnover of US$ 45, 790 million • 43 rd by turnover in the Fortune 500 list of largest companies (August 1999) • Recent major acquisitions: Amora Maille (F), Ben&Jerry’s (USA), Slim Fast (USA), and Bestfoods (USA)

Carrefour objective The excellence of the supply chain: • No out of stocks on the shelf • Lowest total inventories • Faster cycle times • Automation of all information flows • Lowest total delivered cost (supplier to shelf)

Carrefour supply chain vision The target organization: Supplier Daily sales & inventory data per store Cross-docking platform Daily sales & inventory data Store Integrated information system EDI Continuous replenishment (A to B delivery) No inventory No Backroo m inventory

One of Carrefour’s Key Strategies Collaborative approach with our suppliers • More sharing of information • Greater supplier involvement in the replenishment process • Greater accountability: – Shared objectives • Inventory levels • Cycle times • Service rates, etc, … – Performance indicators and score cards

Carrefour and Unilever scope of operations • Commercial relationship in all Carrefour Countries • Involvement of 57 Unilever Companies • Across all Unilever categories • Mutually important business partners • With a shared ambition for growth and operational global excellence

Carrefour & Unilever - A mature Supply Chain in Europe • • EDI rolled out at 100% in all major countries CMI with common tools and processes Building experience with ABC costing … and Product Availability & Traceability Results • Improvements in Service levels • Significant costs reduction • Robustness of operations • Better integration of work flows

Definition of a Global Common Supply 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 in Asia and Taiwan in particular • Asia is the fastest growing Carrefour region • Capabilities and openness on new technologies • Three priority countries: – Taiwan – Korea – Thailand • Taiwan the biggest Asian country for Carrefour » • An adapted infrastructure for a facilitated roll out

Scorecard SP I C E N E M

Co-Managed Inventory (CMI) PHYSICAL STOCKS MOVEMENTS FORECASTS+ ORDER PROPOSAL STOCKS & WHAREHOUSE MOVEMENTS CLIENT DELIVERY ORDER CONFIRMATION LEVER STOCK E. D. I. Physical flow of products CARREFOUR STOCK CL IE N T ORDERS

Supply Chain optimization in Taiwan very promising results • Improved service from Unilever to Carrefour’s warehouse – on time deliveries = +7% – product availability = +20% • Increased service from Carrefour ’s warehouse to stores – product availability = +11% While • Reducing stocks by 40% • Reducing delivery lead times by one day

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 Redoute • A global purchase turnover > to US$ 200 billion • A member’s commitment to bring 70% of this purchase amount on GNX

The valuable services Additional Value Added Services Sourcing Suppliers and Products Applicatio ns Applications Workflow Catalogues Web-Enabled, Dynamic Trading Communication Tools Collaborative Planning, Forecasting and Replenishment (CPFR) Collaborative Product Development

Unilever: one of the chosen partners involved in GNX design and implementation • Prove transaction capabilities on the Net • Set up a migration plan from existing EDI to GNX • Develop a standardized approach for the product catalog with the other GNX partners • Build supply chain optimization capabilities (CPFR)

Taiwan a GNX pilot country • Two pilot countries: France and Taiwan • Pilot objective: move EDI communication to internet enabled transaction on GNX • Steps: – Prove end to end communication based on new internet protocol – Migrate current EDI messages on GNX – Parallel run to test robustness – Go live

A view to the future of EDI communication Potentially: - All countries - All suppliers

Expected benefits from GNX • Unify all current processes and tools • Reduce communication costs ( Internet Vs VAN’s) • Handle existing EDI flows • Promote the use of common worldwide standards • Use in the future an easily and universally understandable language (XML) • Enable access to other GNX functionality

GNX pilot next steps • Roll out of Unilever Carrefour learnings to all Carrefour countries • Pursue pilot developments – Product catalogue – CPFR • Carrefour to extend process roll out to all suppliers

GNX a new tool for our Global Supply Chain Strategy • Global transactional capabilities • Definition and use of a global communication standard • Global data alignment and synchronization • Ability to deploy standard processes globally • Automation of all information flows with suppliers (including smaller ones) –Web EDI • Advanced Supply Chain collaboration

Conclusion • A successful and promising collaboration: – A common and consistent strategy – A global roll out – Key learning for further implementation (new partners, new countries) • GNX, a tool to accelerate such initiatives – Most advanced technology – Wild range of functionality enabling implementation of global best practices

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