Carrefour Supermarket’s Supply Chain Management Research Paper

Introduction.

Considered the second largest retailer in the world, Carrefour’s supply chain management is vast and contains thousands of suppliers (Basu & Wright 2016). Founded in 1958, Carrefour operates more than 1,200 supermarkets and 3,245 convenience stores (Basu & Wright 2016). Its global operations span several continents, including Africa, Europe, Asia, and South America. Currently, the company employs more than 500,000 people and has annual sales in excess of €86.3 million (Basu & Wright 2016). Based on the extent of its operations and changing market dynamics, Carrefour needs to review the efficiency of its supply chain management process to make sure it responds to the needs of the organization, market, customers, and suppliers.

This paper seeks to review the operations of the French-based multinational and the role that supply chain management plays in making its operations successful. This research paper is divided into two tasks. The first one highlights the role of supply chain management and logistics, the link between the company’s structure and its supply chain functions, as well as ways to provide supply chain intelligence. The second task explores the role of supply chain relationships in the management of procurement functions and the role of technology in influencing this relationship.

Why Carrefour Needs Supply Chain Management and Logistics

As Basu and Wright (2016) observe, the supply chain functions of large multinationals, such as Carrefour, are often complex and sensitive to changing market dynamics. Therefore, the need for an efficient supply chain management is paramount. Carrefour Supermarket needs an efficient supply chain and logistics management to satisfy the demand for its goods and services. Implementing seamless logistics in the company’s operations could benefit the organization by increasing its response to its customers’ needs (Xu, Xu & Liu 2014). It could also reduce the time spent by the supermarket chain to move goods from one point to another. These advantages could increase the competitive advantage of Carrefour supermarket.

Effective supply chain management and logistics could also improve the quality standards of Carrefour because it gives managers an opportunity to determine what products they sell to their customers and the quality specifications they should have (Xu, Xu & Liu 2014). For example, the supermarket has a product line of Carrefour-branded products (Xu, Xu & Liu 2014). To safeguard its quality standards, the company makes sure that all suppliers who were approved to provide products within this business segment meet high-quality standards (Xu, Xu & Liu 2014).

Supply chain management and logistics operations are also vital to the operations of Carrefour because they could improve the company’s ability to coordinate different departmental functions (Basu & Wright 2016). For example, they could help managers to coordinate the functions of the procurement, sales, transportation, and warehousing departments. Overall, effective supply chain management creates an opportunity for management to develop a holistic understanding of the organization’s processes. This way, it is easier for the company to maximize the efficiency and effectiveness of its retail functions.

Organizational Structure of Carrefour Supermarket and its Relation with Supply Chain Functions

Carrefour’s organizational structure.

At the helm of Carrefour’s organizational structure is the executive director in charge of merchandise and supply (Carrefour Group 2018). Under his office, five board of directors oversee the functions of five specialized departments – audit, remuneration, appointments, corporate social responsibility (CSR), and strategic (Carrefour Group 2018). The third level of organizational structure is the group executive committee, which comprises of 14 members (Carrefour Group 2018). The chairperson and group chief executive officer are among the members. Their key responsibilities include managing the company’s operations in different geographic zones, managing its group functions, and directing corporate responsibilities (Carrefour Group 2018). Figure 1 below presents the company’s organizational structure.

Carrefour’s Organizational Structure.

How the Organization Structure Works With the Supply Chain

The aforementioned organizational structure complements Carrefour’s supply chain functions by developing a centrally led supply chain system that aligns with the supermarket’s corporate goals. The centralized nature of the organizational structure makes sure that the entire supply chain is not fragmented, thereby increasing the level of collaboration among its key partners. It also facilitates the behavioral and cultural changes required in different operating regions to make supply chain management more effective and efficient.

Carrefour’s organizational structure is also instrumental to the proper functioning of the company’s supply chain plan because it provides room to leverage its corporate spend. Stated differently, it provides an opportunity for management to influence how the organization allocates its resources to support key supply chain functions. Basu and Wright (2016) explain this strategy by saying it is an innovative way for companies to manage new challenges in their supply chain functions and remain competitive in the end.

In the context of Carrefour’s operations, the organization’s management structure ensures that efforts to leverage corporate spend are primarily directed at improving the performance of strategic supply chain functions (Xu, Xu & Liu 2014). In other words, only those operations that are considered to have a high risk of supply loss are deemed the primary beneficiaries of the corporate spend strategy (Xu, Xu & Liu 2014).

Improvements through Sales Forecasting

The supply chain functions of Carrefour could be improved by following four sales forecasting steps, which are defined by Saracene (2014) as the definition of terms, clarification of sales stages, elevation of CRM as the only source of forecasting, and going beyond pipeline and bookings. The first step (definition of terms) could make all parties in the supply chain process understand key terms that define supply chain communications at Carrefour. This step is closely connected with the second part of sales forecasting, which is the clarification and communication of sales processes.

The connection comes from the fact that after defining the terms to be used in the supply chain management process, all concerned parties need to be made aware of what it would take to move from one step of the supply chain management process to another. The third step of forecasting identifies the need to model the behaviors of suppliers and third parties who are involved the company’s supply chain. This strategy could improve supplier relationships at Carrefour. After implementing this step, it would be possible for the supply chain manager of Carrefour to make accurate bookings and projections in the supply chain management.

Ways to Provide Supply Chain Intelligence

Supply chain intelligence is an important part of Carrefour’s business because it provides real-time insights regarding the performance of different aspects of the company’s supply chain. Collecting intelligence allows executives to understand which aspects of the company’s overall supply chain processes are weak or strong, thereby providing them with adequate information for making strategic decisions. Carrefour could use three ways to gather intelligence. They are outlined below.

Advanced Information Technology Management

One way to provide supply chain intelligence for Carrefour Supermarket is to embrace advanced information technology management. Such a system should engage multipurpose shops, supermarkets, and convenience shops that are within the company’s supply network (Basu & Wright 2016). At the same time, it should include the thousands of suppliers who are integrated in the company’s distribution network because it should be designed in such a manner that the company’s employees could log into the system, get goods from dispatch centers, settle outstanding accounts, and send orders to suppliers through virtual platforms (Basu & Wright 2016).

The logistics dispatch system could also be used to support long-distance communication between the company’s headquarters and its different regional branches, thereby providing real-time supply chain management support (Jue 2014).

Cooperating with Partners

For a long time, many companies have not embraced information sharing because of its perceived risk to intellectual property rights (Lotfi et al. 2013). However, as a coordinator of Carrefour’s supply chain management, I would embrace this strategy as an intelligence-gathering tool. Intelligence will be gathered through partnerships that will be fostered by seeking collaboration with different entities who are involved in Carrefour’s horizontal and vertical integration strategies. This strategy will involve distributing useful information relating to suppliers, logistics, market demand and any other issue that may affect the company’s supply chain plan.

Customer Feedback

Most supply chain management functions are intended to satisfy customer needs. Today, companies have different methods they can use to get instant feedback from customers. As a supply chain coordinator at Carrefour supermarket, I would rely on customer feedback as a source of supply chain intelligence. Negative feedback from customers would typically mean that the supply chain process needs improvement, but positive feedback would imply that the supply chain function is effective.

However, attempts have to be made to evaluate the kind of information provided by customers because some negative feedback could be related to the operations of specific stores and not necessarily the broader supply chain process that supports Carrefour’s operations. Customer feedback could be sourced from multiple sources, including social media sites, the company website, or even electronic mails sent to the company (Basu & Wright 2016).

Supplier Relationship Management (SRM)

The success of supply chain management partly depends on the creation of effective supplier relationship management (SRM) (Basu & Wright 2016). The field of SRM is primarily concerned with managing supplier relationships as a key aspect of supply chain management. Relationships built within this type of structure usually create a positive and financially productive engagement between companies and suppliers. According to Monczka et al. (2015), five kinds of relationships can be pursued with the larger SRM structure. They are transactional, contractual, value-additional, collaborative, and partnership arrangements.

As a supply chain coordinator at Carrefour Supermarket, I would pursue the transactional relationship as the main model of interaction with suppliers. This type of relationship simply refers to the exchange of goods and services within a specific time and at a certain price (Monczka et al. 2015). This type of relationship should be pursued at Carrefour because the supermarket sells many perishable products.

The transactional relationship recognizes the time-sensitive nature of the products delivered. Indeed, by agreeing on a specific price and time for delivering goods, Carrefour would reduce the risk of product write-offs. My model for a transaction relationship with the suppliers would be based on long-term relationships because my goal would be to develop trust with the suppliers. Trust could later be leveraged to improve the quality of goods and services delivered to the supermarket.

As a supply chain coordinator of Carrefour Supermarket, I would also consider a collaborative relationship with suppliers to manage the company’s expectations of service delivery and to create value in the supply chain management. Basu and Wright (2016) define a collaborative relationship as that which is premised on the need to add value to products and to mutually benefit suppliers and companies.

This kind of relationship could be pursued because the products provided by Carrefour’s suppliers are not products of one-off transactions. A collaborative relationship would make sure that Carrefour continues to get value from the systems and processes it buys from technology vendors. Such relationships should be mutually beneficial to both parties because most of the company’s operations are automated (Carrefour Group 2018). Therefore, if there is no proper mutually beneficial relationship with third party service providers, the company’s operations could be severely affected.

As a supply chain coordinator, I would also complete order fulfillment processes by delegating the same responsibility to store managers. Stated differently, instead of centralizing the supply chain management at the headquarters, I would allow the store managers to have some control in the supply chain process by giving their input regarding order fulfillment initiatives. This strategy has been associated with an increased enthusiasm for store managers and departmental heads to participate in supply chain management. As highlighted by Xu, Xu, and Liu (2014), Carrefour’s Chinese operations have successfully utilized the strategy.

Information Technology Needed to Enhance Supplier Relationships

Information technology is an important tool in supply chain management. Its relevance in improving supplier relationships has been highlighted by researchers, such as Basu and Wright (2016). In the context of Carrefour’s operations, information technology tools could be used to enhance supplier relationships by attracting the support of senior managers (Donati 2018). In the same manner, it could be used to source funds or resources for meeting the terms of suppliers, thereby improving their relationship in the end.

The role of information technology in improving supplier relationships has been highlighted by researchers, such as Basu and Wright (2016), who have pointed out that supplier segmentation, supplier governance and the development of supplier relationships are among key areas of supply chain management that have benefitted from the adoption of information technology. For example, the process of identifying suppliers and segmenting them is often a difficult one if done manually.

However, when automated, the process is simplified. At the same time, information technology tools could be used to identify the right type of fit for suppliers, thereby improving the efficiency of the supply chain management process (Basu & Wright 2016). The role of information technology does not stop here because it spreads into the establishment of convenient communication channels that Carrefour could use to keep in touch with its suppliers and establish reliable payment procedures that are trusted by both parties.

The use of information technology tools in the management of supplier relationships is also supported by the fact that it could increase transparency in the contractual relationship that Carrefour would have with its suppliers (Basu & Wright 2016). This benefit is crucial to the development of a sound relationship between Carrefour and its suppliers because transparency helps to nurture trust, which is the foundation of positive supplier relationships (Donati 2018).

Although information technology could be used to improve supplier relationships at Carrefour, Basu and Wright (2016) posit that the biggest problem associated with its adoption is its underutilization in supporting internal and external organizational functions of a company. The benefits accrued from the use of technology in improving supplier relationships stem from the view that supplier relationships are often undervalued because most companies fail to understand how maintaining a good relationship with suppliers could be beneficial to both parties (Donati 2018). However, their views could change if a system for managing supplier relationships is developed.

System for Managing Supplier Relationships

As identified by Basu and Wright (2016), supplier relationships refer to the development of sound engagements with suppliers. Indeed, when there are good lines of communication between suppliers and managers, the entire supply chain process becomes smoother and more effective. As a supply chain coordinator of Carrefour Supermarket, I would develop a system for managing supplier relationships by integrating four key pillars: investing in a supplier management software, demonstrating to the suppliers that Carrefour is a good customer, reducing the number of vendors, and keeping the lines of communication open. Tolhurst (2013) highlights these four key aspects of supplier relationships as the main steps in effective supply chain management.

A software with relationship-building features could be instrumental in improving supplier relationships at Carrefour because the company’s operations are vast and include thousands of suppliers (Carrefour Group 2018).

Therefore, it may be difficult to keep track or maintain a good relationship with all these vendors. However, investing in a good supplier relationship software could help to develop a good relationship with suppliers by monitoring their performance and creating opportunities to accommodate new vendors (Tolhurst 2013). The software would also be instrumental in gathering suppliers’ information and manipulating it from one central location. Overall, the software could help to standardize supplier relationships and identify new areas of engagement that may require further attention (Tolhurst 2013).

As highlighted in earlier sections of this research paper, the second step I would pursue as a supply chain coordinator of Carrefour supermarket would be to demonstrate to the vendors that Carrefour is a good customer. This strategy stems from the recommendations of Tolhurst (2013), which encourage companies to maintain a positive working relationship with their vendors because suppliers also evaluate their performance in the same manner as companies review the performance of third-party players. One way I would demonstrate that Carrefour is a good customer is to make sure the vendors get their pay on time.

If it is impossible to do so, attempts should be made to notify them of the issue and to give them an estimate of when they should be expecting the payments. Lastly, the vendors should be provided with adequate lead-time to supply their products or services. All engagements will be done transparently.

Another step in the design of the supplier relationship system is to reduce the number of vendors to a minimum. This strategy also stems from the recommendations of Tolhurst (2013), which suggest that good supplier relationships are best achieved when the number of suppliers is low. Stated differently, it may be difficult to manage many vendors because of the overwhelming responsibility of maintaining a positive relationship with each one of them. Therefore, having a small number of vendors would improve the quality of the relationship between Carrefour and its vendors because it would make it easier to manage costs and eliminate unreliable suppliers. The criteria for eliminating vendors will be based on performance indicators.

Lastly, the process of developing positive supplier relationships will be premised on keeping communication lines open. For example, attempts could be made to include some vendors in company parties or meetings to make them feel welcomed and appreciated. Similarly, attempts could be made by Carrefour to visit the premises of some of the suppliers and be acquainted with their businesses. Basu and Wright (2016) agree that pursuing such a plan provides a “personal touch” to the relationship between suppliers and companies. At the same time, it creates the foundation for a solid partnership with the parties involved. Overall, this four-stage system for building an effective supplier relationship is intended to ensure optimal supplier performance. Broadly, figure 2 below explains the system’s design.

System for Managing Supplier Relationships.

Order Fulfillment Activities and Inventory Control

Order fulfillment activities refer to processes Carrefour undertakes, from the point of ordering to end-user receipt of products or services (Lotfi et al. 2013). The smooth running of these activities requires proper inventory control. However, the process of fulfilling a company’s inventory needs is often a difficult one because each organization has its own customized needs (Lotfi et al. 2013). As the supply chain coordinator of Carrefour, I would embrace quality management and set par levels as the major activities of inventory control.

The goal of setting par levels would be premised on the need to make sure that inventory quantities do not fall below a specific predetermined level. Therefore, when the quantity of product falls below the set standards, new purchase orders will be placed. As a supply chain coordinator of Carrefour, I would also adopt the first-in-first-out system (FIFO), which ensures that the first products ordered are the ones to be sold (Basu & Wright 2016).

This system has a high efficacy level in retail chain management (particularly in the sale of perishables) because it ensures that the oldest stocks are sold out first and new ones preserved for a later sale date. This type of system ensures that orders are effectively fulfilled and the inventory tactfully controlled.

This report has covered the key tenets of supply chain management and their relation with the operations of Carrefour Supermarket. This case study gives insight into how companies, such as Carrefour, which have widespread operations, could use the competencies available in global supply chain management to improve their supply chain management functions. The importance of developing good supplier relationships has also been highlighted as an anchor to the realization of an effective and efficient supply chain management plan.

This research paper has also emphasized the role of technology in the development of such relationships and its efficacy in the development of efficient supply chain software and techniques, as witnessed in the development of Carrefour’s system for managing supplier relationships. Overall, to improve its supply chain functions, Carrefour needs to understand the effectiveness of its current supply chain management process because doing so would make sure the company’s products and services are provided in a timely manner. Setting par limits and FIFO are examples of techniques that could be adopted by the organization to improve its supply chain management plan.

Reference List

Basu, R & Wright, NJ 2016, Managing global supply chains , Taylor & Francis, London.

Carrefour Group 2018, Governance structure . Web.

Donati, M 2018, Use IT to attract top-level SRM support . Web.

Jue, G 2014, The use of business intelligence techniques in supply chain performance. Web.

Lotfi, Z, Mukhtar, M, Sahran, S & Zadeh, AT 2013, ‘Information sharing in supply chain management,’ Procedia Technology , vol. 11, no. 2013, pp. 298-304.

Monczka, RM, Handfield, RB, Giunipero, LC & Patterson, JL 2015, Purchasing and supply chain management , 6th edn, Cengage Learning, New York, NY.

Saracene, T 2014, 4 steps to accurate sales forecasts . Web.

Tolhurst, C 2013, 4 steps to effective supplier relationship management . Web.

Xu, L, Xu, Q & Liu, X 2014, ‘Wal-Mart and Carrefour’s supply chain management strategies in China’, International Journal of Business and Management , vol. 9, no. 7, pp. 155-161.

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IvyPanda . "Carrefour Supermarket's Supply Chain Management." December 2, 2022. https://ivypanda.com/essays/carrefour-supermarkets-supply-chain-management/.

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HOW CARREFOUR REVOLUTIONIZING SUPPLY CHAIN MANAGEMENT: CASE FROM THE UNITED ARAB EMIRATES

Almaz SANDYBAYEV

Carrefour stands out as one of the largest and most successful hypermarket chains. It provides the customers with the great variety of the household goods, high-quality products, and food brands.

Eventually, the hypermarket attracts the customers with the help of special offers and product promotions which customers are interested in. Nowadays, Carrefour in the United Arab Emirates serves over 200,000 customers a day operating 28 hypermarkets and 43 supermarkets (Carrefour Annual Report, 2016). Considering the high dynamics of UAE’s economy development, it is possible to emphasize the role of Carrefour’s power. In fact, it provides all necessary aspects for the cultivation of the effective supply chain, logistics, sourcing, supply management, customer service, demand management, inventory and transportation management, distribution, supply chain outsourcing and other aspects. The current paper is aimed to analyze the advantages and fallbacks of Carrefour within the mentioned area in order to explain the factors contributing to its success and competitiveness to better understand the uniqueness of supply chain in the UAE.

UAE , Supply Chain Management , Carrefour , UAE

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TEDARİK ZİNCİRİ YÖNETİMİNİ CARREFOUR NASIL GERİ DÖNÜŞTÜRDÜ:BİRLEŞİK ARAP EMİRLİKLERİNDEN BİR VAKA

Carrefour, en büyük ve en başarılı hipermarket zincirlerinden biri olarak öne

çıkıyor. Müşterilere çok çeşitli ev eşyaları, yüksek kaliteli ürünler ve gıda markaları sunar.

Sonunda, hipermarket, müşterilerin ilgisini çeken özel teklifler ve ürün promosyonları

sayesinde müşterileri kendine çekiyor. Günümüzde Birleşik Arap Emirlikleri'ndeki

Carrefour, 28 hipermarket ve 43 süpermarket işleten günde 200.000'den fazla müşteriye

hizmet veriyor (Carrefour Faaliyet Raporu, 2016). BAE’nin ekonomi gelişiminin yüksek

dinamiklerini dikkate alarak, Carrefour’un gücünün rolünü vurgulamak mümkündür.

Aslında, etkin tedarik zinciri, lojistik, tedarik, tedarik yönetimi, müşteri hizmetleri, talep

yönetimi, envanter ve taşımacılık yönetimi, dağıtım, tedarik zinciri dış kaynak kullanımı

ve diğer hususların geliştirilmesi için gerekli tüm unsurları sağlar. Bu makalede, BAE'deki

tedarik zincirinin benzersizliğini daha iyi anlamak için başarısı ve rekabet edebilirliğine

katkıda bulunan faktörleri açıklamak için Carrefour'un bu alandaki avantajlarını ve geri

dönüşlerini analiz etmeyi amaçlamaktadır.

Carrefour , TEDARİK ZİNCİRİ YÖNETİMİ , BİRLEŞİK ARAP EMİRLİKLERİ

carrefour supply chain management case study

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Please note you do not have access to teaching notes, notions for the successful management of the supply chain: learning with carrefour in spain and carrefour in china.

Supply Chain Management

ISSN : 1359-8546

Article publication date: 15 March 2011

This paper proposes a framework that considers some key concepts to design and manage supply chains in both national and international contexts. For a better understanding, it is intended to illustrate this framework with the case of Carrefour in both Spain and China.

Design/methodology/approach

In the form of a case study the paper explains global strategies in both countries. The paper also discusses similarities and differences in the supply chain management in both contexts.

The paper found application of core SCM concepts to a leader distribution firm. “Thinking global and acting local” is also pertinent to application in the management of supply chains.

Practical implications

Managers may identify key processes and consider the possible contributions of each to the efficiency of their own chains. This case study could be also used as an example of the successful management of the supply chain of a company leader in its sector.

Originality/value

The present paper illustrates a leader company based on real data.

  • Distribution
  • Process efficiency
  • Supply chain management

Cambra‐Fierro, J. and Ruiz‐Benítez, R. (2011), "Notions for the successful management of the supply chain: learning with Carrefour in Spain and Carrefour in China", Supply Chain Management , Vol. 16 No. 2, pp. 148-154. https://doi.org/10.1108/13598541111115392

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SCM Insight

Carrefour supply chain management .

Carrefour has a very advanced supply chain management system and it allows the company to manage its global operations. The company has successfully differentiated its brand name and it helped the company to increase its revenue and establish a strong database of loyal customers. Today, we’ll discuss Carrefour supply chain management; its supplier relationship management, and how it is using technology to improve relationships.

Some of the key statistical facts and figures about Carrefour Supply Chain Management;

  • Carrefour started operating its business in 1958
  • Has a network of 1200 supermarkets and 3245 convenience store
  • Approximately 500,000 employees are working for the company

What is Carrefour Supply Chain Management? 

Carrefour employs the latest technological tools and software to deal with its supply chain processes and operations like warehouse management, logistics, and procurement. The supermarket brand employs radio frequency and cross-docking technology to move and transport goods and products from the warehouse to the retail stores. Usually, Carrefour employs 3PLs (third-party logistics service providers) to deal with its global SC operations.

In order to satisfy the needs and wishes of customers with products and services, Carrefour requires an efficient and effective SCM system. Launching SCM and a logistic system would help the company to amplify the response rate relevant to the needs and wishes of customers.

Benefits of Carrefour SCM 

Effective implementation of SCM benefits the supermarket Carrefour in the following ways;

  • Amplifying the quality standards
  • Knowing what products to sell to the customers
  • The specific product line for the branded product line
  • Providing products that meet quality standards
  • Improving coordination among various departments like warehousing, transportation, sales, and procurement
  • Maximizing efficiency and effectiveness of the retail functions
  • Developing comprehension of various processes

Carrefour Supplier Relationship Management 

The growth and success of SCM rely on developing stronger supplier relationship management. Some of the main elements of Carrefour supplier relationship management are as follows;

Transactional Relationship

Transactional connection is the main element of developing a relationship with the supplier. It is a type of relationship that focuses on sharing goods and products within a certain time at a specific price. Carrefour should establish such relationships for the sale of perishable goods and products.

The transactional relationship helps you to identify the time-sensitive products, and deliver them at the specific time at the right time. However, managing the long-term relationship with the suppliers would require you to establish a trusting bond with them.

Collaborative Relationship

Carrefour establishes collaborative relationships with its suppliers to meet the expectations of the delivery service and develop value with SCM. The collaborative relationship focuses on adding value to the products and developing beneficial relationships between companies and suppliers.

However, it makes sure that the company receives value from processes and systems from the tech vendors. Such relationships are highly relationship because it automates the company’s operations.

Order Fulfillment

The company shifts the responsibility by completing the order fulfillment. Instead of centralizing SCM processes, the company gives the SCM control to the managers by giving order fulfillment input. However, it is a successful SCM strategy for the company’s stores and supermarkets.

Carrefour Employing Technology to Improve Relationship 

Carrefour employs various IT tools and applications to improve the supplier relationship in the SCM. Many researchers and experts have pointed out the role of IT (information technology) in amplifying the supplier relationship. Some of the key areas supply chain areas of Carrefour that have taken advantage of the usage of technology are as follows;

  • Supplier relationship
  • Supplier governance and management
  • Supplier segmentation

Automation technology simplifies various processes and operations. You can employ IT tools and applications to recognize the right suppliers at the same time. It allows you to amplify the efficiency and effectiveness of SCM processes. The role of IT doesn’t stop here; rather it focuses on developing a simple communication channel that allows Carrefour to remain in touch with suppliers. However, it develops such a payment method that is acceptable for both parties.

Transparency & Visibility

The reason various IT tools and applications support supplier relationship management is that it amplifies visibility and transparency in the contractual relationships of suppliers. It is highly beneficial for developing a strong relationship between Carrefour and its suppliers. However, transparency promotes trust and confidence, and it is the foundation of strong supplier relationships.

The benefits derived from the usage of technology amplify the supplier relationship. The reason supplier relationship doesn’t receive a lot of emphases is because companies don’t fully comprehend the significance of supplier relationship and how it is beneficial for both parties.

Conclusion: Carrefour Supply Chain Management 

After an in-depth study of Carrefour supply chain management; we have realized that Carrefour is the world’s leading organization that develops better supplier relationships. If you are learning about Carrefour supplier relationships and SCM processes, then you should keep in mind the abovementioned factors.

References 

Ahsan Ali Shaw

Ahsan is an accomplished researcher and has a deep insight in worldly life affairs. He goes Live 3 days a week on various social media platforms. Other than research writing, he’s a very interesting person.

Related Posts

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Global Logistics Issues 

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RetailWire

Photo: Carrefour

Carrefour uses blockchain to offer consumers greater supply chain transparency.

Tom Ryan

Carrefour has become the first retailer to use blockchain technology with its own branded organic products.

The distributed ledger technology behind bitcoin enables consumers to scan the QR code on a label to access information about the life cycle of a product, including:

  • Its origin and the pathway it has taken : Producer name, field location, packaging location and transport means; 
  • Its quality: Harvest date, analysis results, variety and seasonality; 
  • Its organic certification: Conversion date, official certificate and additional initiatives implemented by the producer.

“By using this technology with our organic products for the first time, we are delivering on our aim of becoming the leader in the food transition for everyone,” Benoît Soury, Carrefour organic market director, said in a statement . 

Blockchain systems  store data securely and in a tamper-proof manner. Potentially replacing paper processes and disjointed data systems, the enhanced data visibility from blockchain promises to more quickly resolve food safety issues as well as overcome inaccurate supply and demand predictions, manual errors, counterfeiting and compliance violations.

Walmart began using IBM’s Food Trust blockchain technology to track lettuce and spinach in 2018, but the technology has been only slowly gaining traction despite the hype around cryptocurrencies.

Hurdles slowing mainstream adoption include a general lack of knowledge on blockchain and its applications, customization issues and challenges correlating the multiple ways data can be submitted.

Before being widely used, costs likely need to come down, although heightened recordkeeping requirements being proposed by the Food and Drug Administration for food safety is expected to incentivize adoption to help scale blockchain-based food tracing, according to The Wall Street Journal .

Jan Beránek, CEO and founder of U+, a tech consulting firm, believes a business case still has to be made for suppliers to replace current tracking and compliance methods, such as GS1. He recently told Food Engineering magazine, “In order to justify building or integrating a blockchain solution within their business, it would need to provide additional revenue, save costs, provide a competitive advantage or meet compliance requirements.”

  • Carrefour Is The First Retailer To Use Blockchain Technology With Its Own-Brand Organic Products, Providing Consumers With More Transparency – Carrefour
  • Food Traceability: Carrefour, A Blockchain Pioneer In Europe, Has Joined The IBM Food Trust Platform To Take Action On A Global Scale – Carrefour
  • FDA Official Says New Rule Could Boost Blockchain-Based Food Tracking – The Wall Street Journal
  • Blockchain technology: Is it ready for prime time? – Food Engineering
  • New MHI and Deloitte Report Finds Supply Chain Disruption is Driving Big Investments in Technology – MHI/Business Wire
  • Is blockchain the answer to supply chain visibility? – RetailWire
  • Blockchain for Supply Chain: Track and Trace – AWS
  • How blockchain could revolutionize food supply chains—and lower your grocery bill – MacCleans

carrefour supply chain management case study

Lisa Goller

B2b content strategist.

carrefour supply chain management case study

Paula Rosenblum

Co-founder, rsr research.

carrefour supply chain management case study

Carol Spieckerman

President, spieckerman retail, discussion questions.

DISCUSSION QUESTIONS: Do you see blockchain technology making a breakthrough soon in tracking and tracing products across the supply chain? What’s holding back adoption at this point?

What’s the likelihood that blockchain technology makes a breakthrough soon in tracking and tracing products across the supply chain?

  • Very likely
  • Somewhat likely
  • Somewhat unlikely
  • Very unlikely
  • Not sure/no opinion

View Results

Christine Russo

If these are truly the reasons (they are not the ONLY reasons): “provide additional revenue, save costs, provide a competitive advantage or meet compliance requirements,” — what is severely omitted from this is the customer. If the customer wants heightened transparency only available from blockchain then the store that provides it wins, and everyone else follows.

Ken Morris

Well, is it really “organic”? That is always the question which blockchain can answer, but at what cost? The current method of ringing up produce, in most cases, is by weight using PLU at point of sale. This method would require prepackaged produce to actually work. So the challenge to scale with blockchain will probably not be met in the produce department. I do see blockchain coupled with RFID as the future of soft and hard goods. We talk about several other uses for blockchain in our recent white paper on LP, and that’s where I see the greatest potential for ROI going forward.

Carol Spieckerman

Retailers have been promising next-level transparency, tracking, and disclosure for years. The current multi-category supply chain snags create a fertile environment for pushing harder. It looks like Carrefour has emerged as one that is ready to walk the talk. Organic produce is a well-chosen billboard for Carrefour, lending credibility in a hot category that tests the limits of blockchain capabilities.

Dr. Stephen Needel

If you don’t trust your store to tell you the truth about the source of a product, you shouldn’t be shopping there. And really, how many people really care about the details? You want to know if it’s organic or not, if it’s locally sourced or not, not the details of a piece of fruit’s life story.

Gene Detroyer

The transparency boasted by Carrefour seems like the transparency provided by Alibaba’s Hema chain. Alibaba has about 100 stores giving the customer just the same details that are described by Carrefour. They have been doing it for over four years.

If blockchain technology provides Carrefour with operation insight, great. But the real reason we are talking about this seems to be what it will offer the shopper.

Phil Rubin

Blockchain will be increasingly adopted for a variety of reasons but the ultimate proof point for supply chain applications lies in whether a chain like Carrefour shares the impact of initiatives such as this one and, as the leader it intends to be, everyone else (or enough of its competitors) follow.

Jeff Sward

This all sounds great. But my head immediately goes to the details of the math. What did all this technology and new information cost? And the impact on retail prices? And then the impact on total sales? And if there is a non-blockchain supported product in the next bin, and it’s cheaper, which one did the customer buy? The information is great, but if the customer is shopping in person they can certainly trust their own senses in buying fresh produce. If they are shopping online, the blockchain data may provide an additional level of comfort about quality and freshness. Sounds like a great first step in how blockchain will support all kinds of shopping avenues.

Lisa Goller

Product availability issues and consumer demand for product data will speed up blockchain adoption.

Grocery is an ideal category for blockchain to boost efficiency, accuracy and food safety, and reduce food fraud. More consumers now pay attention to a product’s country of origin and its journey to their plate.

Market leaders (Walmart, Kroger, Starbucks, AWS) have innovated with blockchain for years. High costs, limited global standards compliance and laggards catching up to mainstream tech hold back widespread adoption.

travis_flxpoint

Proving organic origin is a great application of blockchain technology but I feel the major opportunity is in eliminating the counterfeit/resale market.

Allowing consumers to feel 100 percent confident in product authenticity when purchasing a branded item from a reseller would be a massive win as a whole for the retail industry.

It would first take an organization to spearhead this effort (which I don’t believe I have heard of today) and then if enough big name brands buy into to the program, it could certainly lead to a breakthrough of blockchain in retail.

Amazon I would imagine would be the biggest proponent of this as they have fought against counterfeit resellers for years and I would imagine they are likely already having conversations about how this technology can solve this major issue for them.

Brian Delp

This is a similar concept to what is in place with oeko-tex certifications such as Made in Green which allows consumers to use a labeling code to verify the sustainability, provenance, social responsibility, and safety of the item. Consumers want transparency — but it must be easy. I don’t believe they care how the info is conveyed, as long as it’s frictionless — and scanning a code should be about as easy as it gets.

Patricia Vekich Waldron

I like this approach as there is a customer cohort who are interested in organic product provenance. And implementing blockchain for its own-brand products relieves Carrefour of the multiple party collaboration obstacle that impedes wider supply chain usage.

Paula Rosenblum

Tracking and tracing across the supply chain is good. It has been. A holy grail. Blockchain, however, still doesn’t scale all that well. That’s the biggest barrier to adoption. I was just reading about that this morning.

It would also be good if it didn’t take a village of electricity to power the blockchain.

Roland Gossage

I believe that this will become a standard for all products. Consumers want to know the origin and carbon footprint of the products they are buying. This allows consumers the ability, at an individual level, to enact change in the supply chain and the thus the environment. What this also means is that locally made/sourced products will have an advantage over overseas products. Viva la revolution!

Kai Clarke

No. There is nothing unique behind using blockchain technology to give consumers supply chain transparency that traditional (read data-driven with currency) doesn’t already offer. Properly communicating, storing, reporting and sharing this data requires great systems, processes and controls, regardless of whether it is blockchain based (which is generally less secure) or not. Why risk this on a nascent, unproven, insecure, transaction that has yet to prove itself through billions of transactions?

Brad Halverson

If costs to implement a QR code packed with every conceivable attribute under the sun is currently too complex or places an unrealistic strain on consumers paying for product, then start with a simpler approach and build from there.

Likely all shoppers will want to know these basics: when was it picked/produced, is it actually organic or not, and producer/grower info.

Be excellent at these standards first to earn basic consumer trust and to develop industry standards. Then go after all other certifications, initiatives and wish list items.

Anil Patel

This is fantastic! People who buy organic foods are always concerned about whether or not what they are buying is truly organic. They will like having such detailed information regarding their food purchases. The most stumbling barrier here is widespread industry adoption. Once blockchain-based product tracking and tracing become commonplace, a slew of new providers will emerge, lowering the cost of implementing the technology. I am hopeful that in near future the majority of retailers will be able to provide accurate product information to their customers. This will help to make more informed food choices. Due to mass-production of labels and space constraints on food packaging, customers are unable to acquire accurate and sufficient information about their food. This has to change right away!

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carrefour supply chain management case study

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You are in: Home » Operations and Logistics » CASE STUDIES: Auchan and Carrefour use blockchain to boost supply chain visibility

CASE STUDIES: Auchan and Carrefour use blockchain to boost supply chain visibility

By james pearson, this is an archived article - we have removed images and other assets but have left the text unchanged for your reference.

Blockchain technology is most known for how it is used in cryptocurrencies such as bitcoin, but two French retailers are making use of it to add a new degree of traceability to their supply chains.

The technology stores records of transactions across multiple servers rather than a single database. Each node in the blockchain is controlled by a separate entity.

This means that the record is immune to being tampered with, since if a change was made to it on one server it would then differ from the copies elsewhere. In a world of global supply chains and multiple suppliers, this open record of transactions could bring much more certainty to the technology.

Auchan: Visibility from farm to fork in France

Having conducted trials of its blockchain tracking solution in Vietnam, Auchan is introducing it in its European markets of France, Italy, Spain and Portugal.

The technology will allow those involved in the supply chain to record information about the products at each stage of its life and input these into one distributed and open database.

Consumers will be able to scan a QR code on a product at the point of purchase and access all of the information about the product’s journey to them.

The interface takes the form of a B2B application for operations in the logistics chain, a B2C application for consumers and an inventory management tool for authorities to check certificates issued by farms.

The initial launch will see the technology used in France to track the supply chain of organic carrots, before being expanded to potatoes and chicken in December and February respectively.

In Italy it will be used to track tomatoes and chickens, in Spain for pork products and exotic fruits and for chickens in Portugal.

Auchan has been testing the technology in the Ho Chi Minh City region since 2017 with help from Te-Food, a German start-up, and public authorities.

The technology is currently being used with 18,000 pigs, 200,000 chickens and 2.5 million eggs, and will soon be used for aubergines, mangos and durian fruit.

Carrefour: Building a global traceability standard

Fellow French retailer Carrefour, meanwhile, is a founding member of the IBM Food Trust platform, which launched recently after 18 months of testing.

Similar to the Auchan model, growers and suppliers can share food origin details, processing data and shipping information on a single network.

It contains facilities for more quickly tracing products and verify the provenance of digital certificates.

Other founding members include cooperative Topco Associates and Wakefern, as well as suppliers BeefChain, Dennick Fruit Source, Scoular and Smithfield.

The French retailer plans to expand the technology to all of its brands worldwide by 2022.

Carrefour’s collaboration with IBM follows US retail giant Walmart’s work with IBM to implement blockchain, which has been taking place since 2017. In September, it announced that all suppliers of leafy green vegetables would be required to upload data to its blockchain by September 2019.

Its goal is to make it easier to prevent the spread of pathogens such as E.coli and salmonella.

In the wake of outbreaks, customers generally have to throw away all potentially affected products, whereas using blockchain they can trace the precise origin of their product.

It says that tracing contaminated foods to their source previously took seven days but now takes only 2.2 seconds.

Image credit: IBM

Screenshot 2024-02-16 at 14.44.59

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Wal-Mart and Carrefour's Supply Chain Management Strategies in China

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Supply chain management is a key of retail enterprises survival and development. For a better understanding, we intended to illustrate this concept with the case of Wal-Mart and Carrefour in China. In this article, we focused on the Wal-Mart and Carrefour's supply chain management strategies in China, introduced the supply chain management from four parts. " Customer is the first consideration! " and " Thinking global and acting local " are also pertinent to application in the management of supply chains. Managers may identify key processes and consider the possible contributions of each to the efficiency of their own chains. Through comparisons of supply chain management between Wal-Mart and Carrefour's strategies in China to give Chinese local retail enterprises enlightenment, and should help those wishing to explore the uniqueness of the Chinese market and the challenges that will be encountered when expanding their businesses in China.

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As one of the largest hypermarket chains in the world, Carrefour is determined to take the lead and transform the future of digital retail. So, they came to us. Because we don’t just consult from the sidelines, we get the job done. Together, as partners, we’re building an approach to grocery that puts shoppers first.

The Imperative for Change

Grocery retail in France is facing seismic shifts: French shoppers are going to the traditional hypermarkets less and less; the shift toward healthy, locally-sourced food has become mainstream; and online grocery is accelerating but is highly competitive, combining leading local players, niche specialists and international retailers, such as Amazon, who are entering the market through partnerships.

Carrefour had great assets: a strong brand, an unparalleled mix of store formats and a loyal customer base. Yet their online assets didn’t play well together, mirroring organizational complexity with a tendency to become silos. Their digital footprint was fragmented and change didn’t always scale to make a significant impact.

The Transformative Solution

In January 2018, Carrefour’s newly appointed CEO announced a five billion euro turnover target for ecommerce over five years (20 percent of overall sales) and a key partnership with Publicis Sapient to drive digital business transformation.

Our goal was to enable Carrefour to behave like an enterprise startup. We began by shaping a strategy to create a cohesive, common digital vision that unified their digital assets to drive ecommerce growth, supporting their food transition strategy and building the foundation for the future—mobile, voice and personalization at scale. We did this by introducing a new scaled delivery model and breaking silos through integrated, diverse agile teams.

The Business Impact

After only six months, the first version of their new ecommerce platform was live. A year later the strategy had proven successful. The unified digital assets are driving massive ecommerce traffic, customer satisfaction is at its highest and their conversion rate has registered steady growth. But more importantly, the pace of change has massively accelerated with the capacity to deliver enhancements every day without downtime. Today, customer-centric, evidence based incremental transformation is a norm at Carrefour. The teams measure, iterate and swiftly react to customer feedback and behavior.

Julian Skelly

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  • The approach allows each function to understand the assumptions relating to transformation that affect it and how its own assumptions affect others.
  • Understanding dependencies enables each function to perform its own design, building, and execution in coordination with other teams.
  • A case study of a leading global retailer highlights how the approach harmonizes disparate elements, fosters cross-functional alignment, and promotes an end-to-end transformation.

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Supply Chain Management

/ article, a unified approach to end-to-end supply chain transformation.

By  Michael Hu ,  Kartik Goel ,  John Cheru ,  Ravi Srivastava , and  Michael Ryba

Key Takeaways

Supply chains play a leading role in enterprise growth . They are the engine of a virtuous cycle, driving customer satisfaction and, ultimately, higher revenue. But they are often vulnerable to the demand and supply uncertainties of the global landscape.

To increase resilience and improve performance, many companies have set out to transform their supply chains. Like builders constructing a complex house, however, they often must contend with the challenges of coordinating multiple teams, meeting ever-increasing demands for digitization, and adhering to accelerated timelines. As a result, their ambitious transformation initiatives fall short of expectations.

So how can companies ensure that every team involved in a supply chain transformation works in concert? We propose an innovative approach that allows companies to align their disparate supply chain elements with their broader business and commercial aspirations.

Supply Chains Are Essential but Fragile

By ensuring that the right products are available when and where they are needed, a high-performing supply chain enables exceptional customer experiences and fuels a virtuous cycle of growth. (See Exhibit 1.) The cycle starts with superior customer service, which drives demand and traffic. This, in turn, creates growth in revenue and margins. Ultimately, it provides the company with healthy coffers with which to further invest in capabilities such as talent, automation, and the data foundation that will improve customer service.

carrefour supply chain management case study

However, supply chains remain vulnerable to uncertainty and complexity arising from geopolitical volatility, macroeconomic challenges, climate change, technology disruptions, and changing consumer expectations. The pandemic-related supply chain shocks were not a temporary aberration but rather an especially acute illustration of supply chain fragility that will continue to threaten revenue growth.

In 2023, for example, despite an inflation rate exceeding 6%, retail sales continued to grow. The resulting strain on transportation and warehousing capacity drove higher costs—average freight costs in January 2023, for instance, were double those of four years earlier. Geopolitical factors, such as the war in Ukraine, have also intensified pressure on supply chains. Given this challenging environment, the need to strengthen supply chains has never been more pressing.

Transforming Supply Chains Is a Lot Like Building a House

Recognizing the urgency, many companies have launched end-to-end transformation initiatives to boost resilience and enhance their supply chain performance. But most of these efforts fail to meet expectations. In consumer sectors, less than 30% of large-scale supply chain transformations achieve their goals on time and within budget.

To grasp why supply chain transformations typically fall short, consider the building of a house. Homebuilders may start with a clear vision and a high-level blueprint. And they may employ the best architects, construction managers, masonry workers, plumbers, roofers, and electricians. But then the challenges begin. Although all the contractors may excel in their fields and follow the blueprint, they often lack the detailed information necessary to agree on key interfaces, dependencies, and design assumptions. Consequently, early prototypes may exhibit problems like rooms not connecting seamlessly with the roof or electrical wires laid in incorrect locations.

To improve coordination, homebuilders can hire a general contractor to orchestrate the various contractors. While this is a positive step, new problems arise: seamless integration is hampered by differing assumptions among the contractors, by the need to incorporate digital technologies for a “smart” house, and by the pressure to complete work within a reasonable timeframe.

Similar challenges occur when companies attempt to transform their supply chains. Many companies start with a piecemeal approach, addressing only specific aspects of the supply chain. Consider the example of an integrated business planning team establishing an AI-enabled multi-echelon revenue forecast for the end-to-end supply chain. Capturing the promised value from this initiative requires significant cross-functional coordination. The supply chain technology team must provide technological and data support, while the distribution and warehousing team must convert the new revenue forecast into daily labor, inventory, and trucking forecasts.

To remedy the shortcomings of a fragmented approach, the company may embark on an end-to-end transformation. It implements AI-enabled forecasting, for example, as one aspect of a broader transformation that also includes redefining the underlying processes and data foundations to ensure that an improved demand signal translates into better daily or weekly order fulfillment, replenishment, and inventory placement decisions across warehouses and store locations. While this holistic approach has the right level of ambition, it is challenging for three main reasons:

  • Coordination. Defining new supply chain processes across various functions in a matrixed organization necessitates significant coordination, as well as collaboration with commercial teams.
  • Digital Enablement. Companies need to understand how advanced digital technologies , such as AI and digital twins, can address the pain points in their supply chain. They must also ensure that the underlying data foundation and pipelines are set up to power the technologies.
  • The Need for Speed. Transformations must be completed within one to two years, which demands a rapid and highly efficient mobilization to rework processes, capabilities, and data.

Ensuring That All Functions Pursue a Common Goal

To manage the complexity of an end-to-end supply chain transformation, companies need a blueprint that allows each function to understand the assumptions relating to the transformation that affect it and how its own assumptions affect others. The blueprint should also make dependencies, such as those between distribution and ordering, visible to all participants. This will enable each function to perform its own design, building, and execution in coordination with others.

carrefour supply chain management case study

To facilitate the development of this blueprint, BCG has designed an approach composed of five interlocking steps. It ensures coordinated action by providing a strategic and execution roadmap across functions and teams. (See Exhibit 2.)

  • Articulate and quantify business aspirations. To guide its efforts, the company must specify what it wants to achieve through the supply chain transformation. It can then determine the KPIs and the underlying execution metrics that contribute to meeting the overall success criteria.
  • Understand current and future product flows. The company needs a baseline, granular understanding of how pallets, cases, and individual items flow from suppliers through distribution networks to end customer locations. It uses this information to assess how it must change the product flow to achieve its goals.
  • Map end-to-end supply chain capabilities. Understanding product flows allows the company to determine which end-to-end supply chain capabilities it needs today and in the future. It can then pinpoint critical capability gaps and decide how to address them.
  • Develop a multiyear capability-building roadmap . The company must determine how to build new capabilities that will enable current and future product flows. This requires identifying which capabilities are prerequisites for others and which ones are critical to completing the transformation.
  • Establish a high-touch and agile program management office. To support execution, the company needs to appoint a high-touch and agile PMO. (See Exhibit 3.) This body sets up the transformation program, defining KPIs and key milestones. It also creates the governance structure by assigning responsibilities across functions and developing the meeting cadence for evaluating critical tradeoffs and resolving issues. In addition, the PMO establishes tools and reporting formats, including the use of data analytics to enable more effective and agile decision making.

carrefour supply chain management case study

Case Study: Applying the Approach at a Leading Global Retailer

BCG applied this approach to support the end-to-end supply chain transformation of a global retailer. The company’s rapid growth had strained its supply chain and revealed key limitations, especially in cross-functional coordination and data enablement. Finding innovative solutions to these challenges was essential to realizing the company’s ambitious growth plans, including international expansion.

Deploying the Approach

The five-step approach described above provided key insights about the innovations and capabilities required to achieve the company’s goals.

Business Aspirations. We identified increasing revenue by 75% to 100% over the next decade as the primary business aspiration motivating the end-to-end supply chain transformation. We then developed an in-depth understanding of the supply chain implications, including numerical projections for case deliveries, stores in the network, and distribution centers required to service demand. We also identified supply chain innovations needed to achieve these goals, including the introduction of new nodes, such as market distribution centers that stock items closer to the stores and daily multiple deliveries from distribution centers to stores. Other necessary improvements were deploying different truck combinations at different times of day, having drivers manage drops during nonpeak hours, and using customized trucks to co-mingle selected products.

Product Flows. Mapping the end-to-end product flows for the current supply chain helped identify critical gaps. For example, the ordering process lacked essential functionalities for tracking order status, modifying orders, and rerouting orders when necessary. The product flow mapping also highlighted specific shortcomings in the current distribution network that limited its ability to support supply chain innovations.

We then mapped potential future product flows, considering delivery profile (number of drops, time of drop, and volume per drop), location of existing and new nodes (including the possibility of new nodes collocated with existing distribution centers), and type of transportation (including truck size and owned or leased fleets). This assessment helped narrow down the list of key future flows, which facilitated the development of the capability-building roadmap. For the shortlisted flows, we identified the activities needed at each node to realize the envisioned future supply chain.

Supply Chain Capabilities. We mapped each identified activity to an enabling supply chain capability. For example, the company needed an automated order forecasting engine to estimate the next day’s order based on starting inventory, the day’s sales, and heuristics-based forecasts of damaged orders. Such a system can significantly reduce the time that store owners spend placing orders each day.

Some of the key capabilities identified included the following:

  • Revamped End-to-End Distribution Network. To support the identified innovations, we proposed investing in new distribution center capacity. This triggered the need to revamp the end-to-end distribution network. Although the new network entailed higher costs and complexity, it gave the retailer greater flexibility and control. The result was higher levels of service and support for product flows than the previous distribution network offered. To initiate implementation, we pinpointed portions of the distribution network that the company could prioritize in the short term and developed a full revamping plan for the long term.
  • Digital-First Order Management Platform. The mapping of future product flows revealed that the company needed distributed order management capabilities. These include the ability to add or modify orders, track orders, reroute deliveries to contingent distribution centers in case of disruptions, and track end-to-end inventory. For instance, the company needed the ability to allocate a store owner’s order between the regional and market distribution center on a daily basis, depending on inventory levels at various nodes and delivery times. Recognizing the need for advanced capabilities, the company launched a digital-first order management platform and mobile app to facilitate intuitive and convenient ordering by its store owners.
  • End-to-End Data Foundation. A cohesive end-to-end data foundation is a key enabler of a supply chain transformation. Considering future capabilities and product flow requirements, we identified several data gaps relating to, for example, KPIs (such as on-time in-full), end-to-end inventory across nodes, and recommendations for the daily order forecast. To address these gaps, we defined a strategy for capturing the right input data. Steps included requesting data from suppliers, placing GPS devices in trucks, and monitoring and reporting the temperature at distribution centers. We also determined the optimal flow of data to the company’s systems and tools to enable analytics, as well as the channels required to view and monitor output. Further, we supported the company in deploying these strategies, such as by developing and implementing a policy to send and receive key data from suppliers.

The data strategy and process design are mutually dependent. For example, the company needed end-to-end inventory data to support the daily order forecast. This insight led us to include an inventory module in the digital order management platform and to source the inventory data at stores directly from store owners at regular intervals.

Capability-Building Roadmap. We developed the capability-building roadmap for the next three to five years, including the critical interdependencies across various capabilities.

carrefour supply chain management case study

Exhibit 4 illustrates interdependencies relating to the ability to recommend the daily order that store owners should place with the distribution center. The company had to establish four capabilities to enable the daily recommendations. These recommendations, in turn, enable additional capabilities.

Many capabilities necessary to achieve the company’s goal entailed a long chain of interdependencies. Mapping all the capabilities from end to end revealed considerable complexity, necessitating an integrated roadmap to guide the capability-building sequence.

Program Management Office. The PMO facilitated the transformation by addressing several challenges. These included inconsistent ways of working across different teams, the complexity of the resource structure and layers, and an absence of unified incentives. The PMO also significantly streamlined end-to-end execution by developing a weekly meeting cadence for monitoring the most critical KPIs (such as those relating to reducing costs, increasing capacity, and improving quality) using a third-party tracking tool.

Summing Up the Benefits

Since adopting our approach, the company has seen significant improvements in the coordination of design and implementation across functions:

  • Alignment on Success Goals. Leaders and their teams understand the key overall goals and how they relate to their own project goals and objectives over three to five years.
  • Clear Understanding of Broader Integration. Functional leaders understand how their initiatives fits into the broader initiative, ensuring clear coordination with both upstream and downstream processes and solutions.
  • Efficiency and Accountability. The approach has helped to reduce duplicative work and clarified ownership and accountability, streamlining the overall process.

BCG’s innovative transformation approach offers an integrative blueprint for companies seeking to fortify and streamline their supply chain processes. The approach emphasizes the importance of coordination, digital enablement, and speed. Recent successes highlight its efficacy in harmonizing disparate elements, fostering cross-functional alignment, and driving end-to-end transformation. By adopting such a comprehensive strategy, companies can navigate the challenges of supply chain transformation more effectively, thereby setting the foundation for long-term enterprise growth.

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Carrefour: Providing great retail experiences, on- and offline, powered by Google Cloud

Carrefour logo

About Carrefour

Originating in France, the Carrefour Group now has stores in more than 30 countries reaching 104 million households across the world each year. Carrefour has been a pioneer in food retail for more than 60 years, continuously striving to make its products both affordable and accessible to everyone.

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Carrefour runs sap on google cloud with full data centralization for the best possible customer service, both on- and offline., google cloud results.

  • Adopts industry best practices for back office management with SAP on Google Cloud
  • Deploys a new ecommerce solution over Google Kubernetes Engine to provide scalability, flexibility, and stability to the platform
  • Scales on demand with the speed of the business without the delays of hardware procurement, configuration, and maintenance

Google Cloud collates 2,000+ data streams in one place

In 1963, Carrefour was the first chain to bring the hypermarket model to France, opening a 2,500 m2 store that offered its customers the previously unseen combination of self-service shelves, a vast range of products, and free parking spaces. Since its foundation, the group has grown into one of the world's largest food retailers and has continued to innovate. It now aims to transform the future of retail by offering the best retail experience and the best products at the best price to customers around the world, pursuing an omnichannel strategy that encompasses ecommerce alongside brick-and-mortar stores.

For Carrefour Spain , the Spanish subsidiary of the group, this is a logical step. “Our focus is on our customers,” says Jose Antonio Santana, CIO at Carrefour Spain. “We want to meet them wherever they are, whether that’s in our hypermarkets, supermarkets, gas stations, or online.” Today, Carrefour thrives on- and offline with more than 1,000 physical stores across the country and 1.4 million online transactions a year.

In 2018, Carrefour Spain decided to overhaul its aging IT infrastructure and build a technological foundation designed to provide its customers with even better service. But making that change is a big decision for a company as big as Carrefour Spain, with so many different stores spread out across the country. The solution had to be powerful enough to handle large data processing tasks and designed to scale rapidly during peak shopping times such as the holidays or Black Friday.

“The goal was to build a data-centric technology infrastructure, so that we could serve our customers better and improve their experience. We needed to reconfigure our core infrastructure from the ground up, transforming our back office with Google Cloud and SAP.”

A cloud-based solution was the only way to handle the scale needed. However, the company could not afford to put its operations on hold during the migration, so it also needed a hybrid platform that could work with the existing on-premises infrastructure in the short term. To make that foundation a reality, the company turned to Google Cloud .

“The goal was to build a data-centric technology infrastructure, so that we could serve our customers better and improve their experience,” says Jose Antonio. “We needed to reconfigure our core infrastructure from the ground up, transforming our back office with Google Cloud and SAP.”

Accessing the right expertise for a successful migration

Combining on- and offline retail is a simple concept, but it involves managing complex factors. As ecommerce has become a much bigger part of customers' lives, their behavior has changed, even when they are shopping in physical stores. “Our customers today are much more sophisticated than before, with higher expectations,” says Jose Antonio. “Often, they want to have all the information about a product, even before they walk into the store.” Customers don’t exclusively shop on- or offline, either. For example, they might want to buy bread in-store, but prefer to buy other products in bulk online.

To ensure that Carrefour delivers the same high quality service whichever channel the customer uses, the company has to collate multiple strands of data, relating to products, prices, stock levels, and local availability. The existing on-premises IT infrastructure was not designed for the amount of data processing such services require and had reached its technological limits. In order to scale up and meet demand, the company would have had to carefully plan its capacity in advance, sinking costs into hardware that had to be ordered, installed, configured, and maintained. By 2018, Carrefour Spain needed not just new equipment, but a new kind of infrastructure.

With so many unique aspects to consider, Carrefour Spain worked closely with Google Cloud consulting services to ensure an orderly, phased migration with minimal disruption to the business. “We pride ourselves on our innovation, but our business isn’t to specialize in cloud technology,” says Esther Vázquez Hevia, Director of Digital Transformation and Production and CISO at Carrefour Spain. “We wanted access to experts with the best knowledge and expertise, who could guide us through a successful migration. The best way for us to do that was with Google Cloud Consulting services.”

Updating ERP infrastructure for complete data consolidation

Large retail organizations such as Carrefour depend on Enterprise Resource Planning (ERP) tools for back-office operations such as inventory management, payroll, or supply processing. Over the years, the company had built up an assortment of applications to deal with its ERP needs, which resulted in data silos that took time to collate and analyze.

Moving to Google Cloud provided Carrefour with the perfect opportunity to update and standardize its back-office procedures and consolidate its data streams. It runs SAP on Google Cloud , which gives retailers access to the world’s leading ERP application vendor combined with the advantages of a cloud-based infrastructure.

With help from Google Cloud consulting services, Carrefour Spain began implementing SAP HANA on Compute Engine virtual machines in September. Within four months, the company had deployed the first phase of its new hybrid infrastructure, made up of 150 virtual machines. Around 40 of these are dedicated just to SAP HANA, while the others are given over other major services such as data processing.

With SAP on Google Cloud, Carrefour Spain has built an infrastructure optimized for customer service. The company has consolidated more than 2,000 data streams into a single place, and it now has the capacity and power to collate, analyze, and act on that information in real time.

“With Google Kubernetes Engine on Google Cloud, we can deploy and deliver new environments very quickly. We can grow and resize our environments at the same speed that we roll out our projects.”

Getting ready for annual peaks with automatic scaling

As well as transforming its data processing, Carrefour Spain also had its eye on boosting its ecommerce infrastructure ahead of the holiday season. Just a month before Black Friday, the company began migrating its ecommerce solution to Google Kubernetes Engine clusters. By using Kubernetes, the open-source container technology developed at Google, Carrefour Spain does not have to worry about provisioning new servers when it scales up.

When Black Friday came, the new ecommerce platform built on Google Cloud passed the test with flying colors, able to scale up and down automatically without compromising performance.

“With Google Kubernetes Engine on Google Cloud, we can deploy and deliver new environments very quickly,” says Esther. “We can grow and resize our environments at the same speed that we roll out our projects.”

“Google Cloud has given us the flexibility to adapt our infrastructure and the agility to make changes very quickly. We’ve been able to adopt and standardize industry best practices across the whole company and provide the highest possible service to our customers.”

A solution for the present, a foundation for the future

The migration to Google Cloud has also made an impact on Carrefour’s developers and engineers, changing how they work. The operations team has adopted an “infrastructure as code” methodology, which allows it to make quick and easy changes to environments in minutes, without having to manage or maintain hardware. The team can build and iterate through different updates much more efficiently than before, resulting in higher quality services.

“Google Cloud has given us the flexibility to adapt our infrastructure and the agility to make changes very quickly,” says Jose Antonio. “We’ve been able to adopt and standardize industry best practices across the whole company and provide the highest possible service to our customers.”

Carrefour Spain has also reduced infrastructure costs with pay-per-use pricing on Google Cloud. With only one of its seven Google Cloud environments designated as a production environment, the company can shut the others down at night or on weekends when developers aren't working on them, saving resources for where they are really needed.

After the success of the 2018 holiday season, Carrefour Spain has focused on migrating its legacy on-premises architecture to Google Cloud and completing its digital transformation. With Google Cloud in place, the company can look forward to accessing new technology such as machine learning capabilities for enhanced data analysis, or SAP Leonardo, which can integrate Internet of Things functionality to its existing ERP capabilities.

“Together, Google Cloud and Carrefour are developing solutions for the retail experience of the future,” says Jose Antonio. “We want to provide our customers with the best service, wherever they are, whenever they need it.”

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Supply Chain Management of Carrefour - Case Study Example

Supply Chain Management of Carrefour

  • Subject: Management
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  • Published: 15 February 2024

The improvement of block chain technology simulation in supply chain management (case study: pesticide company)

  • Lina Gozali 1 ,
  • Helena Juliana Kristina 1 ,
  • Andrew Yosua 1 ,
  • Teuku Yuri M. Zagloel 2 ,
  • Maslin Masrom 3 ,
  • Sani Susanto 4 ,
  • Harto Tanujaya 5 ,
  • Agustinus Purna Irawan 5 ,
  • Ariawan Gunadi 6 ,
  • Vikas Kumar 7 ,
  • Jose Arturo Garza-Reyes 8 ,
  • Tji Beng Jap 9 &
  • Frans Jusuf Daywin 1  

Scientific Reports volume  14 , Article number:  3784 ( 2024 ) Cite this article

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  • Energy science and technology
  • Engineering

This research was conducted on industrial agriculture in Indonesia. Risk analysis was carried out based on previous research. One source of risk was obtained, namely raw materials that did not meet specifications, which was then proposed to be mitigated by evaluating supplier performance. This activity involves a lot of data, requiring efficient and effective data storage and access. The level in the simulation layout includes analysing system needs, using problem diagrams, compiling activity diagrams, deciding subprocesses, and filtering information. The analysis is carried out by comparing the use of supply chains with Blockchain and without Blockchain, which is then obtained to determine whether there is an increase. A sequentially stored data scenario describes a situation when the transaction process is in progress and is stored sequentially according to the process that occurs. Storing data in groups explains a problem when a transaction has been completed and stored in groups with similar data, making it easier to track specific data. In this regard, a simulation will be carried out using a website, namely a blockchain demo. The design stage starts with identifying system requirements, creating use case diagrams, compiling activity diagrams, determining subprocesses, and selecting information. The simulation results obtained will be analysed to determine the feasibility of Blockchain as a means of supporting risk mitigation related to data using aspects, including security, trust, traceability, sustainability, and costs.

Introduction

Blockchain technology uses decentralised systems, distributed computing, asymmetric encryption, timestamps, and consensus algorithms 1 . Therefore, the stored data cannot be changed or modified, so this technology can guarantee security and trust when making transactions 2 . With the growing interest in Blockchain, this technology has been widely implemented in many sectors and industries, including financial, business, industrial, voting, education, health 3 , supply chain management, healthcare information systems, e-government, voting systems, smart contracts, and digital signatures, has attracted the attention of early beginners 4 , 5 , 6 , 7 .

Blockchain technology enables organisations to develop new applications that can significantly improve the supply chain. Blockchain provides transaction transparency, data security, and seamless trust, reducing costs, creating more effective supply chains, and satisfying customers 8 . Blockchain enables supply chain partners to share data in a more trusted way, leading to improved collaboration. Blockchain will be a truly transformative technology for the supply chain industry 9 .

Recently, the rise of blockchain technology has overcome many problems with characteristics such as decentralisation, digital contracts, openness, encryption, and so on 10 and can overcome supply chain problems with new traits. Moreover, in small and medium businesses, sharing information created via Blockchain has an extraordinary progress effect in improving the skills of various company resources and can increase productivity. At the current level, Blockchain has attracted much interest from experts and has been able to be applied in multiple fields. For example 11 , mentioned that Blockchain can trace and investigate the transparency and sustainability of supply chains in technological design. The agricultural supply chain system based on 12 obtained an overview of increasing business resource employment from the double chain framework of Blockchain 13 investigated several operations management researchers regarding Blockchain’s influence. If the raw material does not meet the required criteria specifications, it cannot be used because it will reduce the quality of the finished material. What happens next is that the raw materials will be returned, and a refund will be requested. This action will affect the production schedule as it cannot meet the deadline set by the buyer 14 . Blockchain technology can empower supply chain resilience management 15 . The results or impacts of supply chain performance can be in all fields without exception 16 . Blockchain technology significantly impacts changing the manifestation of criteria in traditional supply chains 17 . For this reason, it is essential to investigate the methods used to measure new achievements in the supply chain using blockchain technology.

There is a lot of enthusiasm for applications in the current financial and digital currency markets, the most prominent of which is Bitcoin. Blockchain technology has excellent capabilities that can be applied to things far beyond cryptocurrencies 18 , 19 , and most people believe that blockchain technology can overcome many of these obstacles. Blockchain itself can be accessed by all customers with a specific network at any level of the supply chain to record everything to the ledger transparently in the supply chain sector in a complete manner 20 . Blockchain technology is becoming a big trend because it can provide significant and fundamental changes in systems capable of producing highly reliable, trust-based and integral infrastructure 21 .

The level in the simulation layout includes analysing system needs, using problem diagrams, compiling activity diagrams, deciding subprocesses, and filtering information. The feasibility of blockchain technology as a means of supporting risk mitigation, many factors will be used as a reference, including security, trust, traceability, sustainability, and costs. The analysis is carried out by comparing the use of supply chains with Blockchain and without Blockchain, which is then obtained to determine whether there is an increase. The purpose of this study is to identify the use of Blockchain for the pesticide supply chain, starting from the need to use blockchain technology, simulation design, data storage can work well through simulation results, and the feasibility of Blockchain as a means of supporting risk mitigation by analysing it on five different aspects.

Literature review

Block chain technology.

Blockchain technology has great potential to solve three supply chain issues: traceability and transparency, counterfeiting, and efficiency play 22 , 23 . Blockchain technology introduces order, simplicity, trust, visibility, and automation to a chaotic environment. Blockchain dramatically streamlines paper-based processes while introducing greater security and visibility simultaneously. The technology digitally models real-world relationships across the global supply chain ecosystem. Blockchain holds details of each part and makes it accessible to each manufacturer in production. Blockchain enables firms to see across tiers in the supply chain, both upstream and downstream 24 . Blockchain is an alternative that can improve and speed up information sharing, replacing paper tracking and manual inspection systems that make supply chains vulnerable to inaccuracies 25 , 26 . This potential for information sharing can be seen as strengthening the overall ability to control the supply chain and its activities. Blockchain helps build and execute smart contracts, creating trading partner visibility and more efficient collaboration. Blockchain’s peer-to-peer transactions eliminate the need for intermediaries, reducing each transaction’s cost 27 . The technology enables a single point of contact for data, eliminates the central authority needed to validate transactions, allows decisions based on total supply chain information, and promotes collaboration with partners 28 . Additionally, Blockchain record-keeping procedures that keep track of transactional data in a secure, verifiable, and permanent produce a chain of records and ownership that is much less vulnerable to fraud and cybercrime and difficult to hack and alter. The technology establishes trust among partners by ensuring that every transaction is recorded and stored in multiple locations across the entire distributed network. Administrative functions will be drastically reduced or eliminated due to the increased visibility of transactions and the potential to avoid non-value-adding activities. In turn, it will improve supply chain efficiency and reduce system complexity. Blockchain also builds confidence in the journey of a product. Customers learn about what the product is made of, where it came from, and its impact on the environment. Producers and retailers benefit from better product tracking and empowering customers with s new information. Additionally, blockchain technology enables producers and retailers to get insight into what customers want and tailor their goods and services accordingly 29 , 30 , 31 , 32 , 33 . Figure 5.1 summarises real-world examples of Blockchain changing supply chain management 34 .

Block chain technology in transaction ledger

Blockchain is a digital and distributed cash transaction ledger, recorded and reflected directly (real-time) on a computer network or node. There is no need for a central authority to authorise transactions; therefore, Blockchain is called a trustless peer-to-peer mechanism. Blockchain technology provides a more secure way for cash ledgers to store records and databases without centralised manual intervention. So, verifying transaction archiving in a blockchain-based system is much cheaper than in a centralised human verification system. The result is an operating model for transactions in the system based on system-based trust rather than counterparty-based trust 35 .

Blockchain technology can track every activity in the Blockchain, where every record of that activity is an activity that has been validated. Each block in the Blockchain contains data from all transactions in the system over a certain period of time and can create a digital signature that can be used to verify the validity of information related to the next and previous blocks. Transactions that have been carried out will be stored in blocks. If the transaction has been verified with a consensus of all or the majority of members in the network, then the transactions that have been stored in the block cannot be changed or deleted 36 .

Agriculture business supply chain

Agrifood supply chain.

In the agrifood supply chain (ASC), collaboration is often carried out by stakeholders at several different levels, from the farm to the hands of other customers, and the influencing variables have many similarities 37 , 38 . Throughout the supply chain (SC), many stakeholders try to increase the complexity of work, resulting in a lack of transparency and many obstacles related to this 39 . The need for transparent information in the supply chain is triggered by the food crisis and food safety 40 .

Pesticide supply chain

Pesticide supply chain actors in the Agriculture industry include raw material providers/suppliers, processing/production departments, distributors, retailers, and end consumers. The primary raw material providers/suppliers in active ingredients come from abroad, namely 80% from China and the remaining 20% from Japan, Belgium, Korea, Germany, and Malaysia. In contrast, auxiliary materials and packaging materials come from local domestic suppliers 41 . Related to these obstacles, Blockchain, with its characteristics, can provide benefits in the form of more transparent, secure, and trustworthy data between the parties involved 42 . With these benefits, Blockchain can be used as an auxiliary means of accessing and collecting data necessary for supplier performance evaluation, such as ease of data tracking, transparency, distributed data, and avoidance of data manipulation 43 . This benefit also applies to other risk mitigations related to data needs 44 .

Block chain system

System requirements analysis

In designing a system, analysing needs needs to be done. Needs analysis is carried out to determine the specific needs of the system consisting of the outputs that must be produced, the inputs required to produce the output, the operations performed to produce the output, and the resources needed to make the system run and deliver output 45 .

Use case diagram

Use case diagrams are modelling to identify the behaviour of a system to be created. Use case diagrams illustrate the users in the system and what users can do to the system. Actors involved in use case diagrams have two characteristics, namely actors outside the system being developed and actors who interact with the developed system 46 .

Activity diagram

An activity diagram is a diagram that illustrates the natural dynamic nature of a system in the form of a flow model and control of activity to activity. The difference between activity diagrams and use case diagrams is that activity diagrams describe how a process runs. In contrast, use case diagrams illustrate how actors use the system to perform activities. In the activity diagram, a decision is used to describe behaviour under certain conditions. The advantage of using activity diagrams is that it makes it easy to understand the running scenario. Activity diagrams model workflow or business processes and operations internally. This diagram will describe processes in more detail than in the use case diagram 47 .

Subprocess determination

From the known processes, which subprocess will be supported by blockchain technology is selected. The selection is based on activity types full of cross-individual data transactions. The choice can also be found in the activities with the highest risk. Such increased risks need to be mitigated with a blockchain system. One form of risk is data misappropriation and manipulation 48 .

Information selection

Information selection is choosing which information from the activity will be supported by the blockchain function. This information must be carefully selected to prevent the system from managing too much data. Data needs to be made efficient without reducing the effectiveness of data transactions. The information chosen can be based on the system’s primary purpose of being applied to the Blockchain 49 .

Blockchain mechanism

In how Blockchain works, a block generally consists of 3 things: the data in the block, the hash of the block itself, and the previous block’s hash. A block must have a hash of its cryptography and the hash of the last 50 to stay connected in a chain. If the hash changes, the block will be considered invalid in the Blockchain. A hash is a string returned from a mathematical function called a hash function. The hash function takes various inputs and converts them into fixed-length strings. Even if the change to the input string is tiny, the hash function will generate a new hash that may differ significantly from the actual result. Usually, the hash function used in blockchains is SHA-256. The longer the blockchain chain, the more complex the hash value to look up 51 .

  • Supply chain management

Supply Chain Management (SCM) contains information, finance, and material flows that create close collaborative relationships between suppliers, manufacturers, vendors, and customers 52 . The main goal of the supply chain (SC) is to increase overall profits through cost reduction 53 . SC currently has several social-environmental issues and sustainability problems. The considerations for sustainability issues include several socio-economic-environmental dimensions in decision-making regarding climate change, which has become the main trigger for demand and can increase customer loyalty. The issue of sustainability in SC is driven by several reasons involving concentration on social, competitive and regulatory dimensions 54 . Consumers now have concerns about sustainability issues, which also puts pressure on manufacturers and suppliers to pay attention and work together on sustainability issues 55 . New technology also makes a significant contribution to the problem of implementing sustainability in the supply chain. One of the technologies that is currently widely applied is blockchain technology. Blockchain technology provides a new colour or significant revolution in supply chain sustainability 56 .

Increasing the sustainability of SC requires the application of BT because it has many valuable benefits. Investment limitations mean that the application of BT cannot develop rapidly. Privacy considerations remain hot among SC stakeholders because too much information sharing can unintentionally distort market structures 53 . Prevention of these complications must then be managed effectively, and data and privacy issues must be addressed. Worst of all, BT can become a tool for personal abuse of power and market control 52 . Another obstacle to using BT is its high energy consumption 57 . Repeated data input also causes BT energy consumption to be high because it has to increase computing power, thereby causing more carbon emissions 58 . So, there are many risks in implementing BT in SC sustainability. Studies must be conducted on this new technology’s internal and external challenges 59 . In SC sustainability, implementing BT involves many risks and challenges from various aspects and requires identifying and prioritising accuracy and essentials. The critical research to be carried out is to identify and provide the best solution for adopting BT in SC in implementing sustainable development factors. Limitations in the real world must be overcome to produce the best solution for implementing BT. One way to determine practical solutions is to use the Multi-Criteria Decision Making (MCDM) approach.

Block chain in supply chain management

In a network that is used jointly and independently, decentralisation can be realised; Blockchain should be able to manage supply chain activities in a decentralised manner and with integrity, so this causes many to lose the need to collaborate with other third-party systems to support communication or several related parties. Others 60 , 61 . Another important thing in the blockchain system is the ability to show the location of an item very precisely at every point and record transactions that have been carried out thoroughly 62 . Context capability is another essential feature of Blockchain. This implies that if many parties are on the network, all data changes will be appropriately recorded 63 . This ensures companies have a high level of authentication regarding the origins of their products. This helps companies significantly reduce costs and time to detect violations and errors while managing data correctly and safely for the entire organisation 64 .

Several studies have been conducted in food supply chains, designed, developed and implemented in blockchain-based system solutions. However, there is a belief that the user’s subjective matters cannot be appropriately resolved precisely by understanding the opportunities and challenges in implementing the system. It is deemed necessary to conduct behavioural science studies in information systems (IS). According to the definition of Bariff and Ginzberg 65 , research conducted on information system behaviour will have a descriptive tendency, namely looking for systematic relationships between observations of user and personnel behaviour SI. Current trends in behaviour in information systems cannot be ignored by technology but are expected to be able to develop non-technical strategies that aim to change attitudes, management policies, and organisational behaviour related to technology 66 .

Although Blockchain has some significant capabilities that optimise productivity and reduce costs, it raises significant concerns that must be addressed. It poses barriers that executives must remove over time, and decision-makers can adapt to the widespread acceptance of this technology 18 have concerns about a significant impact on technology adoption for managerial parties. Planning begins with creating a framework for appropriate blockchain adoption by professionals, who can determine the unique values associated with the organisation’s goals and culture. Another thing that could help is using alternative Design Science Research methods 67 to design an artefact to address requirements and determine the most critical priorities regarding trust at each point in the agrifood supply chain. This framework can make implementing a blockchain-based information system for food tracking easier in real-time.

The research method was carried out by holding discussions with informants with expertise in this study’s data and data assessment field. Then, secondary data in the form of historical data is obtained employing literature studies originating from the company’s official website, research, and publications that have been carried out at the company. The data collected includes general company data, supply chain mechanisms, business processes, and management. The flowchart of the research method can be seen in Fig.  1 .

figure 1

Method flowchart.

The research method is described as follows: 1. Literature study of scientific journals and proceedings related to the researcher’s topic of interest. With this study, researchers can enrich themselves in knowing developments, problems and research gaps that can be researched; 2. The background formulation is carried out by the findings obtained by researchers from various sources that have been obtained, then compiled so that potential problems that need to be overcome can be found; 3. From the background that has been prepared, ideas are obtained regarding potential problems to be used as research topics that will be studied further; 4. Based on the background, problems can be found so that potential problems are identified further and clearly, and specific problem identification is obtained; 5. Then, the problem formulation and research objectives are determined so the research becomes more directed and focused; 6. Next, secondary data was searched and collected according to data relevant to the researcher’s research, namely general company data, pesticide supply chain mechanisms, pesticide supply chain business processes, pesticide supply chain management, and the results of chain risk identification and analysis. pesticide supply; 7. If the required data is sufficient, data processing can be carried out, including analysing the system’s needs under study, creating use case diagrams, compiling activity diagrams for the system, determining the subprocesses that will be simulated, and selecting information that will become simulation data; 8. Carrying out blockchain simulations according to data processed using third-party tools in the form of a blockchain simulation website, namely Demo Blockchain ( https://demoblockchain.org/ ).

Apart from that, discussions were held with four sources to increase the research’s objectivity. All resource persons are academic experts with experience and expertise related to the problem being studied. All the steps in the research methodology should be addressed carefully to guarantee objectivity and reach the research aims. The okay ( ✓ ) criteria get a minimum of 50% scores from the expertise (a minimum of two people agree with the requirements of the subprocess).

This research used the explanatory case study method 68 mixed with qualitative and quantitative evidence to illustrate specific topics within an evolution in blockchain technology. The role of theory in this research is essential to construct a preliminary theory and requires theoretical propositions. The rationale for a single-case study represents unique circumstances. Analysis Technique with Logic models in Repeated cause-effect relationship with individual level or organizational-level logic model. The structure reporting with comparative analysis repeats the same case study two or more times, comparing alternative descriptions or explanations. This case study’s identity as real and anonymous with full disclosure is the most desirable option, helping readers link in previous research and ease of review.

Data collection

Data was collected in 2020 by Agusti and Mulyati 69 . The agriculture industry is the companies that produce pesticides in Indonesia. Based on previous research on the pesticide supply chain in this industry, a risk analysis was carried out, which then obtained the results of one of the risk agents, namely raw materials not meeting specifications. The source of this risk is included in the high-risk classification, which is a priority to be addressed. For these risk mitigation alternatives, it is proposed to evaluate supplier performance, which will involve a lot of data, so efficient and effective data storage and access are needed. The supply chain of the Agriculture industry still processes data independently by each actor and shares data that is considered necessary when coordinating in traditional ways, so this has the potential for data manipulation due to low transparency. Data can be stolen due to weak security and requires a short time in the data exchange process.

Material requirement planning in the pesticide industry

The company produces pesticides, fungicides, insecticides, and herbicides. The demand level is uncertain and not fixed per day, and the company is required to plan the production process sequences precisely to meet consumer needs. The company experienced problems such as high shipping and ordering costs, and raw material inventory was far less than inventory capacity 70 . The company must maintain raw materials availability, such as a 1 Liter insecticide packaging bottle, to expedite the production process. It was scheduling a 1L insecticide packaging bottle as its superior product needs to be done to determine the inventory amount in a certain period. The inventory can meet demand, knowing the safe amount of inventory to meet production needs optimally, and minimizing ordering costs by maximizing ordering capacity. The pesticide production system is described in Fig.  2 . The pesticide production system chart created is refined from the chart originally created by Elimam 71 . The additions elements provided include safety stock, lead time, lot size, forecasting, production time.

figure 2

Pesticide production system.

Pesticide supply chain mechanism

The agriculture industry has suppliers that provide the main ingredients from abroad, namely 80% from China and 20% from Japan, Belgium, Korea, Germany, and Malaysia. As for the suppliers of supporting materials and packaging materials, they come from local/domestic. The Agriculture Industry has market coverage focusing on generic companies and retailers. The structure of the pesticide supply chain network in the Agriculture Industry can be seen in Fig.  3 .

figure 3

Structure of the pesticide supply chain network.

Pesticide supply chain management

The pesticide supply chain transaction system is divided into the transaction system in the procurement of raw materials and the transaction system in the product sales process. A transaction system can be used to procure raw materials to evaluate supplier performance. The flow of transactions in the raw material procurement process can be seen in Fig.  4 .

figure 4

Transaction flow of raw material procurement process.

The following is an explanatory description of the transaction flow in the raw material procurement process.

MRP and forecasting planning is carried out at the beginning of the raw material procurement process, and the planning is related to production planning and inventory control.

Import Plan is an import plan related to the company’s strategy and procedures for importing goods, including selecting suppliers.

Approved by the SC Manager or Vice President before implementing the plan. The SC Manager or Vice President must know it first and approve it.

Price Negotiation: Carrying out price negotiations means making a contractual agreement for a new supplier entering into a contract for the first time. Meanwhile, suppliers who have become subscribers use proforma invoices.

Import Purchase Order (PO): after an agreement has been reached with the supplier, a PO is made to order the required raw materials from overseas suppliers.

Delivery Schedule and Shipping Document: when the supplier has received the PO and the goods are ready to be sent, the delivery schedule will be known along with the documents, including invoice, packing list, CoA, and BoL. Invoices contain transaction details between sellers and buyers. The packing list includes detailed information about the goods sent. CoA (Certificate of Analysis) is a document that provides laboratory test results related to product specifications, such as content, composition and quality. BoL (Bill of Lading) is proof of a transportation contract, goods receipt, and ownership document in sea shipping.

Raw materials entering the factory, receipt of raw materials by the factory after the goods arrive at their destination.

Quality Control: raw materials will be checked first through quality control by QC before being stored in the warehouse.

GRN (Good Received Note) by the warehouse department, it is necessary to ensure that the goods received are in accordance with what was ordered. GRN functions as official proof of goods receipt and validating suppliers’ invoices.

Payment Note is a document that details the payment transactions carried out. Has a function as proof that the buyer has made payment.

Meanwhile, the transaction flow in the sales process for pesticide products can be seen in Fig.  5 :

figure 5

Transaction flow in the pesticide product sales process.

The following is an explanatory description to understand better the transaction flow in selling pesticide products.

Logistic Care receives Purchase Order (PO). Incoming orders from buyers are accepted as a PO document. This document shows the agreed type, quantity and price of goods.

Sales Order (SO): After the company receives the PO, the document will be converted into an SO, indicating that the company has approved the buyer’s order to sell the product according to the PO received.

Check product availability in the warehouse. After the company agrees to fulfil the PO from the buyer, a stock check of the product ordered will be carried out.

Delivery Order (DO): if the quantity of the product ordered can be met, the company will issue a DO document to the warehouse to release the goods to the buyer.

Scheduling Delivery and packing: the goods to be sent need to be scheduled so that Delivery can be carried out regularly. Apart from scheduling, it is also necessary to pack goods to protect them from damage during shipping and make transportation easier.

Travel document: When the goods are ready to be sent, they will be accompanied by a travel document. It functions as proof of Delivery and contains information, such as details of the goods, sender and recipient.

For the Delivery of products to consumers, products are sent according to a schedule and require a specific time to REACH their destination, depending on the distance between the buyer and the seller.

Invoice (billing to consumers): after the goods are received by the buyer/consumer, payment will be made for the goods ordered in the form of an invoice.

Results and discussion

Simulation design.

Simulation design helps obtain data for use in simulations. The following is a simulation design consisting of stages: analysing system requirements, creating use case diagrams, compiling activity diagrams, determining subprocesses, and selecting information.

In carrying out a system requirements analysis, it is necessary to know in advance a system analysis of the needs for using blockchain technology. The study results can be seen in Table 1 .

Based on the results of Table 1 , the blockchain technology suitable for recording data on the pesticide supply chain is a blockchain with private permissions. After that, system requirements were analysed, as seen in Figure 6 .

Use case diagrams

figure 6

System requirements analysis.

Four actors are involved in the system: suppliers, companies, distributors, and retailers. On the left side of the diagram is a group of sellers, while on the right is a group of consumers. The use case diagram of the pesticide supply chain with Blockchain can be seen in Figure 7 .

Activity diagrams

figure 7

Use case pesticide supply chain diagram with blockchain.

In procuring raw materials, only two actors are involved (company and supplier). Still, to clarify the activity, a company warehouse is added to receive and inspect the raw materials obtained. The company includes the PPIC, purchasing, and finance sections. The activity diagram of the pesticide supply chain with Blockchain in the raw material procurement process can be seen in Figure 8 .

figure 8

The activity of pesticide supply chain diagram with blockchain.

Determining sub-processes begins by looking at all the sub-processes that occur, defining sub-processes that contain a large amount of information and have significant impacts, and exchanging data with other actors in the pesticide supply chain. The subprocess selected for the simulation was determined by four sources with their respective roles and expertise through discussion. The okay ( ✓ ) criteria get a minimum of 50% scores from the expertise (a minimum of two people agree with the requirements of the subprocess). The sub-processes used in the simulation are price negotiation (contract/proforma invoice), PO (purchase order), delivery schedule & shipping document, and payment note. The following results from determining the subprocess which can be seen in Table 2 .

Information Selection

The selected information will focus on parts that are considered essential and can represent documents contained in specific sub-processes. The following is the information used.

Name and position of party 1 (one) and party 2 (two), then articles in the document such as general provisions, types of goods, scope, rights and obligations, and implementation.

Proforma Invoice:

Document number, seller data, buyer data, shipping method, payment method, type of goods, quantity, and total price.

Purchase Orders (POs):

PO number, document date, PO status, supplier data, buyer data, number of items, item code, total price, and time of payment.

Invoice number, billing and shipping address, delivery date, shipping method, item description, and total price.

Payment Notes:

Date, billing number, billing date, billed total, payment method, payment details, and payment amount.

Simulation results

The simulation uses third-party tools such as website-based Blockchain Demo software ( https://demoblockchain.org/ ). The simulation is carried out in two scenarios: data stored sequentially according to the supply chain process and in groups according to each category. A sequentially stored data scenario describes a situation when the transaction process is in progress and is stored sequentially according to the process that occurs. Meanwhile, storing data in groups explains a problem when a transaction has been completed and stored in groups with similar data, making it easier to track specific data.

In sequential scenarios, 4 (four) different documents are stored connected to each other in 4 separate blocks: proforma invoices in block 1, purchase orders in block 2, invoices in block 3, and the payment note in block 4. Block 1 has a previous hash value of “000000000000000000000000000000000000” because it is the initial block and managed to produce a hash value of “00009da4a7da76f8ace8f85ab3c9b45f4978b2”. Then the hash generated in block 1 becomes the previous hash in block 2 (two), as indicated by the arrow, and has succeeded in producing a hash value of “0000b74df2e3f8186be350a19092940aade329”. Sequential simulation results of blocks 1 (one) and 2 (two) can be seen in Fig.  9 .

figure 9

Sequential simulation results in Block 1 and Block 2.

Likewise, block 3 (three) and block 4 (four) also make the hash of the previous block the previous hash of that block. Block 3 succeeded in producing a hash value of “000016c4ba2a946b80674af02fe5a55bbbc81e”. Block 4 succeeded in creating a hash value of “00003bfe96b5e53d38868da0522ebf1efd8187”. Sequential simulation results of block 3 (three) and block 4 (Four) can be seen in Fig.  10 .

figure 10

Sequential simulation results in Block 3 and Block 4.

Furthermore, invoice documents will be used for group scenarios to represent other documents. Four supplier invoice documents are stored and connected to each other in 4 blocks, namely blocks 1, 2, 3, and 4. Block 1 has a previous hash value of “0000000000000000000000000000000000000” because it is the initial block and succeeded in producing a hash value of “000000b510b2eaf55a465279a182252afc850b”. Then the hash generated in block 1 becomes the previous hash in block 2 (two), as shown by the arrow, and has succeeded in producing a hash value of “0000bbf63e5adac65dddc292a214d32e972fc5”. The simulation results for blocks 1 (one) and 2 (two) can be seen in Fig.  11 .

figure 11

Invoice simulation results in Block 1 and Block 2.

Likewise, block 3 (three) and block 4 (four) also make the hash of the previous block the previous hash of that block. Block 3 managed to produce a hash value of “00008bc38ba4b332056fa41386b4f42b0de19d”. Block 4 succeeded in creating a hash value of “0000a0ad439680fbc72a158acf851f611e14a2”. The simulation results for blocks 3 (three) and 4 (four) can be seen in Fig.  12 .

figure 12

Invoice simulation results in Block 3 and Block 4.

Blockchain feasibility analysis as a means of supporting risk mitigation

The simulations that have been carried out show that the pesticide supply chain uses Blockchain for data storing running well. In both processes, procuring raw materials and selling products, the data contained therein can be reserved by generating the previous hash and hash of each block in the Blockchain. Supplier performance evaluation can only use the raw material procurement process related to contract documents, proforma invoices, purchase orders, invoices from suppliers, and payment notes to support risk mitigation. As a result of the feasibility of blockchain technology as a means of supporting general risk mitigation related to data, several aspects will be used as a reference to see it from various angles. The aspects used include security, trust, tracking, sustainability and cost 72 . The following is a description of each aspect used.

On the security side, pesticide supply chain data stored using Blockchain can be accessed by all supply chain actors, so it can also be called decentralised or distributed. This security side means that each actor has the same rights and authority in interacting with the system, and no one has higher or lower power than others. So, all actors have equal and fair power and can prevent attacks on the system because it cannot be attacked through just one point. Apart from that, the stored data is also distributed to all supply chain actors so that each actor has an exact copy of the data as each other. This stored data can prevent data corruption, resulting in data loss. Another thing that can be gained from the security side is the hash generated by each block. With this hash, any change to the data, no matter how small, will produce an invalid hash. In the end, data manipulation will be challenging to do. As a result of how this system works, data before and after the change occurs are shown in Fig.  13 73 , 74 , 75 , 76 . The change is a tiny entity, only differing by one number in quantity, and other data has no change. However, it can be easily seen that the resulting hash is immediately very different and is marked by the block’s colour changing to red where it was originally green. Even though data changes are only made to block 1, all subsequent blocks to the newest block will produce an invalid hash. So, when changes are made to the data in any block, no matter how small, the changes will result in a consecutive invalid hash up to the latest block. So, it will be effortless to see if data has been changed/manipulated.

figure 13

The red colour shows the data manipulation in data submission.

Blockchain allows all supply chain actors to have the same power level so that trust becomes dependent on the system, not on specific people with a higher access level. Of course, suppose the actor’s trust is based on the system. In that case, there is no need to worry about data manipulation because the system mechanism is resistant to data manipulation. In addition, the level of transparency in the pesticide supply chain is high because all supply chain actors have a copy of the same data and update each other 58 , 77 , 78 , 79 , 80 , 81 . The transparency of data storage in the pesticide supply chain can be seen in Fig.  14 .

figure 14

Data storage transparency between supply chain actors.

From Fig.  13 , the four actors are depicted as Peer A, Peer B, Peer C, and Peer D, and each actor has an exact copy of the data. This data copy is also indicated by the same hash value for each actor, namely “00001c33ec8c1f4171a00d7a6b4a24cb4da780”. So, the stored data will be transparent between supply chain actors so that the level of trust can increase.

Regarding data tracking, all data will be recorded sequentially and in categories. With a high level of transparency where data is distributed so that every actor in the pesticide supply chain has an identical copy of the data, inevitably, the stored data does not contain variations. This transparency can make data tracking easier when obtaining complete data because there is no need to re-coordinate between actors. In addition, data that has been stored is challenging to change, so all data has been well organised and stored, and its authenticity is guaranteed, so there is no need to verify data between actors. Of course, coordinating and verifying actors requires a lot of time and is quite a complicated process. That way, data tracking will be done in a shorter time. So, the data tracking carried out can be ensured to be accurate data tracking, and the time required is shorter. This makes data tracking more efficient and effective 82 , 83 , 84 , 85 , 86 .

Sustainability

In terms of sustainability, the stored data will last for an extended period of time. The data has been stored and well organised, and the authenticity of the data has been confirmed without verification because data changes are challenging to make, making it resistant to data manipulation. Then, trust in the system mechanism creates a high level of trust between pesticide supply chain actors, and there is no need to worry about unfair treatment or fraud in the system because it is not based on trust in someone. Then, data tracking that is more efficient in terms of time and effective in terms of data accuracy can contribute to improving the sustainability of the pesticide supply chain system. In addition, all actors have identical copies of the data, making the data resistant to corruption that, makes the data disappear and not be recovered. So, by using Blockchain, data can be stored continuously more efficiently and effectively without worrying about fraud between actors, data being lost, and data being manipulated 42 , 56 , 87 , 88 , 89 .

Blockchain technology is relatively new, requiring much money for design and development. Apart from that, costs are also needed to integrate this into the existing system in the pesticide supply chain. Don’t forget that when applying this technology to the system, there needs to be an adaptation from all actors in the pesticide supply chain to run the system correctly and obtain optimal results. In this adaptation, training is required for employees, so it requires training costs and a short amount of time to be able to fully adapt to this new system 82 , 90 , 91 , 92 , 93 , 94 .

Blockchain technology as a means of supporting risk mitigation in general related to data in the pesticide supply chain, several aspects will be used as a reference so that it can be seen from various sides. The aspects used include security, trust, traceability, sustainability, and cost. The analysis is carried out by comparing the use of Blockchain and without Blockchain, which is then obtained to determine whether there is an increase. The following is a comparison that can be seen in Table 3 .

Table 3 shows that Blockchain is appropriate to support risk mitigation related to data in the pesticide supply chain. Through the five aspects above, there are improvements in four aspects, namely security, trust, tracking, and sustainability. However, from a cost perspective, some challenges must be overcome through a large allocation of costs and time. However, considering that the agriculture industry is mature and has become a holding company, the challenges related to costs have a high probability of being overcome. This cost is also supported by the need for a pesticide supply chain, which is quite complex because it has a relatively large number of suppliers, most of which come from abroad. Likewise, the number of retailers is widely spread in various cities. The use of Blockchain as a means of supporting risk mitigation in the pesticide supply chain will provide good benefits.

Blockchain has shown its potential for transforming traditional industry with its key characteristics: decentralization, persistency, anonymity and auditability. Through the simulation design that has been designed, it is obtained that the pesticide supply chain requires the use of blockchain technology, and the use of Blockchain in the pesticide supply chain can be applied following system requirements analysis, use case diagrams, activity diagrams, subprocess determination, and information selection that has been carried out. The simulation results show that data can be stored, organised, and connected correctly, as evidenced by the hash successfully generated by each block, and the hash then becomes the previous hash contained in the next block. The feasibility of blockchain technology to be used as a means of supporting risk mitigation related to data in the pesticide supply chain is declared feasible according to the results of a comparative analysis between supply chains without Blockchain and with Blockchain, which is carried out based on five aspects, namely security, trust, traceability, sustainability, and cost. Even though the cost aspect is a challenge that needs to be faced, the agriculture industry, with a mature company and a holding company, certainly has a high possibility of overcoming this. It is different if the company is still new or in bad condition; further consideration is needed. So, blockchain technology can be used to support data-related risk mitigation. Still, it is necessary to pay attention to the needs of the company’s supply chain and its readiness because of its condition.

Future research

Many open issues still need to be researched and analysed to create more workable and practical industrial applications, healthcare, Real estate, consumer and civilian applications, government and military operations, and highly fast-moving products that can fully benefit from Blockchain technology and achieve the intended goals. About the legal action, different industries have different standards and security policies. The high operation cost of Blockchain is still the most challenging problem for blockchain applications. Besides high costs, some open issues include security, privacy, scalability, energy and mining issues, integration with other systems, and, more specifically, regulatory issues. It still needs quantitative analysis to review the performance and security of public, private and high-complexity companies. Most projects are in an early development phase, and research is still ongoing on key improvement areas that would allow desired scalability, decentralisation and security. Additional research initiatives, trials, projects and collaborations will show if the technology can reach its full potential, prove its commercial viability and finally be adopted in the mainstream.

Data availability

All data generated or analysed during this study are included in this published article [and its supplementary information files].

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