Operations Management in Carrefour Hypermarket Qatar

This report analyzes the operations management processes of Carrefour Hypermarket Qatar, including strategies, objectives, and problems faced. It explores the production system, inventory management, key operations, and issues in the delivery system. Lean approaches are suggested to improve production and operational practices.

[School]
[Course title]
CARREFOUR HYPERMARKET QATAR

1 INTRODUCTION
Operations management can be defined as an organization and planning of resources that are
required to the distribution and manufacture of services to consumers. The operational
management processes of Carrefour Qatar hypermarket have been analyzed in this report in
order to determine the strategies, objectives, and problems faced by it during its execution.
Carrefour is one of the famous multinational retailers that transforms the vision of
entertainment and shopping all across the world. In the current scenario, Carrefour
hypermarket operates in more than thirty countries such as Asia, the Americas, Qatar, India,
Indonesia, China, Iran, Iraq, Oman, Saudi Arabia, Lebanon, Jordan, Japan, United Arab
Emirates, Belgium, Armenia, etc. Carrefour Hypermarket offers a variety of products to
consumers in Qatar such as Microwave oven, smartwatch, tablet, laptop, mobiles, dish wash,
vegetables, fish, chocolates, chicken, fish, food items, butcheries, etc. The report aims to
analyze the production system of Carrefour Hypermarket Qatar. This report is summarized
how well the assets and inventories within the production system of Carrefour Qatar have
been managed. Along with this, the key business operations involved in the selected
production system are presented with the use of logical operational flow. This report
investigates whether the delivery system of the company properly aligns with the operational
performance measures or not. In this report, lean project management approaches have been
suggested to Carrefour hypermarket that will help to reduce the failings in the production
system.
2 CARREFOUR HYPERMARKET QATAR
Hypermarket is a combination of both departmental store& supermarket. Carrefour
Hypermarket Qatar allows customers to buy all required products or services in a single trip.
Presently, there are 10 Carrefour stores in Qatar in different locations such as Palm Mall,
Mirqab, Mall of Qatar, Dar AI Salam, Ezdan Mall, etc. The production, distribution, and
inventory management systems of all Carrefour market are similar. Products are the core
business of the Carrefour group and it guarantees the diversity, dynamics, and freshness of
affordable fresh produces (Carrefour, 2019). The quality of fresh fruits, vegetables, and other
products depends on the expertise of cheesemongers, fishmongers, pork butchers, bakers, and
growers. Baby care products, food products, non-food products (textiles, small household
goods, home appliances such as multimedia equipment, sound equipment, photo equipment,

and DVDs), etc. are main product service categories which have been provided by Carrefour
Qatar to its valuable consumers at lower prices.
3 INVENTORY MANAGEMENT IN THE PRODUCTION SYSTEM
OF CARREFOUR HYPERMARKET QATAR
In context to operations management theory, all production processes & business operations
should be performed by Carrefour Qatar in an efficient way. People skills, technological
knowledge, rational analysis, and creativity are critical aspects of successful operations
management. Customer demand is the main ingredient that likes up the production capacity
of the Carrefour market for an efficient and effective manufacturing process. The company
has deployed an effective supermarket model for managing production in order to streamline
the basic manufacturing and inventory management business operations. The organization
has used continuous production system in which material handling is fully automated which
supports a higher rate of production in less cycle time. Carrefour Qatar is acquiring 90% of
the food products and consumer goods directly from its local manufacturers in order to keep
the product cost low. Instead of waiting for customers, Carrefour Qatar hypermarket involved
all its suppliers in its product production plans and also help them for quality control and new
product research. The organization has relied on 3Pls (third-party logistics providers) in order
to perform supply chain operations at the global level in an effective way. Carrefour
hypermarket and stores in Qatar are used equipment and machinery for producing tangible
Carrefour brands. The produced items have been stored in the warehouse unit in order to
meet consumer’s demand. In the production system, there is an availability of fuel,
refrigeration, steam, and gas which have been used for the production and preservation of
food products. Along with this, cooling racks, scales, mixers, oven and various other types of
equipment and machinery have been provided to bakery staff for producing delicious food
items as per the demand of consumers. All business stakeholders including suppliers,
manufacturers, vendors, and other business stakeholders are working collaboratively as they
have to fulfill the demands of various stores in Qatar.
By critically analyzing the production operations of Carrefour Qatar, it has been found that
all stores of the Carrefour group compete with each other for the same food and non-food
products. To accomplish all requirements of their customers, Carrefour organization has
decided to implement technological solutions such as the deployment of an ERP system in
order to identify and track key consumption requirements and facilitate efficient business

operations. With the use of ERP software, the Carrefour staff can send notifications to
suppliers regarding the delivery of required raw materials. The suppliers are shipping the
ordered products directly to the production unit and warehouse of the company. Moreover,
the organization has used EDI (Electronic Data Interchange technology) to enhance business
communication with its suppliers.
Figure-1 inventory management in Carrefour (lleonliao, 2011)
The following presented order management model has been used by the Carrefour Qatar
organization for order management (Carrefour, 2017):
Figure-2 order management model (Carrefour, 2017)
It has been found that Carrefour Qatar is currently using an ERP system and 3PLs system for
improving the efficiency and effectiveness of its overall business processes. There is no doubt

in that the adoption of these solutions allows the organization to manage inventory well at
some extent but these technological solutions are unable to reduce waste of food products
(Aluregowda, 2013). The problems associated with inventory management have been discussed
in the third section of this report.
Key operations in the production system of Carrefour organization
The main objective of Carrefour organization’s production management activities is to
produce a consumer good at the right time within minimum cost. The key operations of the
production system have been explained in the following section:
Figure 3: Key operations in the production system of the Carrefour organization
 Production planning – In this activity, the Carrefour organization decides when to
produce, what to produce and how to produce. The organization does production
planning to ensure that the hypermarket market is capable to fulfill the demand of its
customers.
 Production control – It is the responsibility of the Production Manager of Carrefour
organization to accomplish all production objectives within the budgetary guidelines.
It has been imported most of the products from local manufacturers in Qatar so that
customers can buy all products in a single shopping trip.
 Inventory control – The production manager is responsible for monitoring the
inventory of Carrefour organization on a regular basis in order to offer a pleasing
shopping experience to consumers. Carrefour organization implements ERP solution
for inventory management and shrinkage but it fails to manage inventory successfully.
As a result, the production and operations management staff have faced problems
related to overstock, out of stock, poor product condition, etc. The ERP system
maintains the record of vendor accounts, costs, suppliers, manufacturers, physical
Production
planning
Production
control
Inventory
control
Order
booking
Stores
management
Dispatching
Quality
control
distribution
management
Logistics and
supply chain
management
Customer
and demand
management

stock and lead time for re-ordering stock. Moreover, the EDI solution has been used
by the staff members for communication with suppliers.
 Order booking – There are various Carrefour hypermarkets in Qatar and they all are
competing to acquire products from the same production unit. All Carrefour stores
and markets are booking their orders as per the demand of their consumers.
 Stores management – Carrefour hypermarket supports decentralized store
management system in which local staff managers have the power of commodity
including product promotion, selection, merchandising, ordering, negotiation, pricing,
staffing, etc. However, these powers make local store managers of Carrefour
hypermarket respond quickly to the customer needs and the local market (XU, 2013).
 Dispatching – Decentralized dispatching system has been utilized by Carrefour
hypermarket in which the supervisor is responsible for dispatching the materials and
orders to each worker so that they can complete their work within a limited time. The
problems associated with product dispatching have been performed successfully at the
store as a decentralized dispatching system supports effective communication
between workers and supervisors (Besseris, 2011).
 Quality control – The mission of Carrefour Qatar hypermarket is to offer quality food
products to all its customers at reasonable prices. The Quality Manager is responsible
for performing quality and food safety audits to ensure the best quality of all fresh
food sections such as pastry, spices, bakery, poultry, butchery, fruits, vegetables, etc.
In the context of the control, Carrefour Qatar Hypermarket has implemented an online
platform that enables it to manage demands and non-compliances from the quality
team related to different performance indicators. The company has also implemented
stringent quality controls to reduce product defects and produce quality products.
 Distribution management – Carrefour prefers to procure products from local vendors
to cater to local tastes. It also saves time and cost required for product distribution.
 Logistics and supply chain management – The organization is using Infolog and
Scheduler technological solutions for keeping all products in the best condition. In
order to reduce the truck mileage and save the environment, the organization moves to
“River and Rail” transport. Along with this, it has owned a 3PL system for product
transportation. The organization has been used Generix supply chain software
integrated with Logistics and 3PL.
 Customer and demand management - Carrefour Qatar offers a unique shopping
experience to its customers by providing them with special loyalty cards. Customers

can buy products through Carrefour Qatar mobile app from anywhere. In 2018,
Carrefour Qatar has released a new version of its mobile app that helps in the accurate
forecasting of customer demand.
Figure-4 Logistic management in Carrefour (lleonliao, 2011)
4 PROBLEMS IN THE DELIVERY SYSTEM OF CARREFOUR
QATAR HYPERMARKET
1.1 INVENTORY OVERSTOCK OR OUT OF THE STOCK
Carrefour Hypermarket Qatar is committed to delivering fresh food products to all its
customers (Carrefour, 2018). Actually, the ERP suite used by the organization does not offer
enough functionality which results in the occurrence of out-of-stock or overstock situations.
Many of the customers have posted negative comments on social media sites due to late
product delivery due to out of stock. As the Carrefour Qatar Hypermarket is dealing with a
greater number of manufacturers and suppliers to allow its customers to buy all essential
goods, products, and items under one roof. With the use of an existing ERP suite, the
organization usually fail to track product availability which results in poor customer
satisfaction. Many times, the operations and sales Managers fail to forecast the demand of
consumers due to the availability of advanced technological solutions which adversely affects
the overall production and business operations.

1.2 DELIVERY OF STALE FOOD PRODUCT PRODUCTS AND EXCESSIVE FOOD
WASTAGE
From the last decade, Carrefour Qatar Hypermarket is fighting against food waste. The
organization has improved the sustainability of food products packaging in order to reduce
food waste to some extent. Food wastage is the crucial issue which has been faced by
production and operations management staff. The food production staff do not follow a
standardized product labeling process. Some of the manufacturers set the product label dates
themselves for ensuring food consumption at the peak of freshness. However, many
consumers complaints that Carrefour organization sells stale food products by printing wrong
labels. The consumer segment of Carrefour Qatar has been affected negatively due to
ineffective food inventory management and delivery operations. According to (Kor and Prabhu,
2017), 20% of dairy and meat products, 30% of cereals, 35% of seafood and fish, 45% of all
fruits and vegetables are wasted by retailers and suppliers every day. The overstock is the
root cause of the food wastage. There is no doubt that Carrefour group has taken many
initiatives in the reduction of food wastage in France, Spain, Romania, Belgium, and China
hypermarkets but it’s a time to improve business operations of Carrefour Qatar to attain
competitive advantage (Carrefour, 2018).
In the end, it has been summarized that food wastage, delivery of stale food products and
poor demand forecasting are main issues associated with operations and production planning.
5 LEAN APPROACH FOR CARREFOUR QATAR
Carrefour Qatar Hypermarket can implement lean approaches to improve its production and
operational practices (Fercoq, Lamouri and Carbone, 2016). Lean is an effective hypermarket
operating strategy that requires simple workflow, eliminating the loss of motifs, materials,
time and effort. Moreover, the production and operations management activities which do not
add any value in the business of Carrefour Qatar can be eliminated successfully by
implementing lean approaches. The simple organization of work, removing bottlenecks
throughout the supply chain, using “pull” to drive replenishment. Eliminated wasted time,
wasted motion, wasted effort, and wasted materials are main applications of lean techniques
which contributes directly to improve the overall effectiveness and performance of
hypermarket (KERKHOFF, EAGAR and UTTERBACK, 2009).

In context to the lean management, all inventories whether it is a WIP (work in progress),
material or finished goods have wasted until the inventory is translating directly into the
product sale. Carrefour Qatar Hypermarket maintains huge inventory in the warehouse units
which could result in the generation of food waste due to poor processing equipment and
inefficient processing. A pull production system is an effective lean approach which can be
utilized by the organization to limit inventory and reduce wastage of overproduction. Lean
inventory management approach can be applied in order to enhance the value of Carrefour
Qatar’s inventory through proper identification and elimination of waste materials, time and
effort. This approach has been built upon five principles named as value, flow, pull,
responsiveness, perfection. In the context of this approach, the organization should buy food
products from suppliers and manufacturers as per the demand of their customers so that food
wastage problem can be reduced in an effective way. The organization should implement
advanced technological solutions so that inventory can be managed as per the demand of
consumers. It has been suggested to Carrefour Qatar hypermarket to adopt lean six sigma
approach (DMAIC) to continuously refine its inventory management processes that will
improve cycle time, quality, cost and operational efficiency (Wilson and Auchard, 2018). It is the
best approach for industries which deal with food products (Kholopane, 2018).
Carrefour Qatar hypermarket should implement Artificial intelligence for optimizing the
inventory management and production operations and reducing waste (Carrefour, 2019). It
should integrate AI technological solutions into its inventory management, production, and
supply chain management operations to predict the demand of consumers. As accurate
prediction of consumer’s demand will allow the organization to successfully manage its
inventory stock and reduce the chances of inventory overproduction or out of stock.
However, the problem of stock overstocking and stock outages can overcome successfully
with the implementation of AI solutions (Matos and Santos, 2018).
Another problem related to the delivery of stale food items and excessive generation of food
wastage should be reduced by the organization. Presently, the organization can use
blockchain technology to verify the freshness of food products (Victor B. de Souza and Cesar R.
Carpinetti, 2014). As it will restrict the manufacturers to put the right labels on the food items
and increase customer satisfaction. By using technological solutions, it will be easy for
Carrefour organization to track the freshness of produces (P. and Abudho, 2014). There is no
doubt that food wastage can be eliminated by 100% in the supermarket business. However,
the organization can utilize the food wastage in the production of compost which will save

the money and reduce food waste. The produced compost can be provided to farmers for
producing food items (Koumanakos, 2008).
6 THREE KEY FINDINGS
1. The implementation of a pull system will reduce the pickup volume by the consumers
and variations in the production rate (Radnor, 2009). An absolute limit on total
inventory can be determined by Kanban as it represents a certain amount of stock that
will allow the organization to create, manage and control the upper limit of an
inventory (Carrefour, 2018).
2. DMAIC approach can be implemented within the existing production planning and
operations management system of Carrefour Qatar organization to minimize the risk
of food wastage by 70% and to improve inventory control. The organization needs to
design a lean six sigma plan which should be properly aligned with the business
strategy as it will contribute to the long-term business success (Radnor, 2009).
3. The implementation of technological solutions will help the production and inventory
management staff to meet business goals by delivering safe, quality and fresh food
items to consumers.
The key findings of this study will allow the Carrefour organization to achieve
organizational performance measures by properly integrating lean strategy to the
corporate strategy.
7 CONCLUSION
Lastly, the report summarized that Carrefour Qatar Hypermarket has been utilized as an
effective supermarket model for managing production in order to streamline the basic
manufacturing and inventory management business operations. Currently, it uses a
continuous production system in which material handling is fully automated that facilitates a
higher rate of production in less cycle time. This report concluded that production planning,
production control, inventory control, order booking, stores management, dispatching, and
quality control are main key operations which have been performed in the production system
of an organization. The key findings of this report indicated that inventory overstocking and
stock outages is one of the critical problems in the production system of the organization
which occurs due to the inability of the operations and sales Managers to accurately forecast

the demand of consumers due to availability of advanced technological solutions. The
delivery of stale food products and excessive food wastage in the warehouses is the second
problem which waste time, effort and money of Carrefour organization. The delivery of stale
food products and excessive food wastage in the warehouses is the second problem which has
wasted time, effort and money of Carrefour organization in a negative way. Lean inventory
management approach can be applied by Carrefour Qatar’s inventory in order to enhance the
business value through proper identification and elimination of waste materials, time and
effort. The production and operations management activities which do not add any value in
the business of Carrefour Qatar can be eliminated successfully by implementing lean
approaches.
7.1 RECOMMENDATIONS
 It has been recommended to Carrefour Qatar Hypermarket to implement lean six
sigma approach to refine its inventory management and production operations that
will improve cycle time, quality and reduce cost (Lukic, 2012).
 Inventory optimization solution provided by SAS service provider based on AI
technology should be implemented by Carrefour Qatar organization to create business
value and reduce waste. This system will collect data from e-commerce websites,
stores, and warehouses while predicting the demand of consumers. However, with the
implementation of AI technology, the organization can overcome the problems related
to stock outages or inventory overstocking successfully.
 For the successful implementation of lean approaches, the organization has been
recommending to design a lean six sigma plan and align it with the business strategy
as it will contribute to the long-term business success (Belvedere et al., 2019).
 Lastly, the organization has been recommended to adopt a blockchain ledger
technology for tracking and tracing tomatoes, eggs, and chicken. With the adoption of
this technology, the organization can secure its supply chain management processes
(Belvedere et al., 2019).
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