Seven Eleven Case Study

Responses

1.          The convenience store chain can be responsive in below ways by reducing lead time

• Analysis of daily data for every retail store and each SKU enabling forecasting and turnover rate to reduce replenishment time
• Real-time data flow at POS, suppliers, and distributors
• Stronger supplier base and relationship with the suppliers

Risks associated:

• Data congestion due to the large volume and incorrect usage of data
• Server breakdown and data manipulation by hackers
• Risk due to natural calamities if suppliers are in the same compound

1.          Risks due to Seven Eleven’s supply chain strategy

• Depending too much on information systems
• Absence of warehouse
• Calamity or labor unrest at the supplier would lead to stock out the situation in stores

1. Facility location

• Market presence in high-density areas
• 1 distribution center catering around 60 stores

Inventory management

• The absence of inventory due to cross-docking
• Micro matching between supply and demand helping increased responsiveness

Transportation

• Delivery during off-peak hours
• The dedicated vehicle for each category
• Delivery using scanner terminals
• Store allotment per truck dependent on sales volume

Information infrastructure

• Scanner and graphics terminals
• POS linked to store computer
• Store computer linked to ISDN

1. Advantages of the current system

• Products assorted as per required temperature at distribution center reducing perishability
• Reduced number of vehicles for daily delivery from 70 to 11
• Reduced delivery costs
• Reliable and rapid delivery of fresh foods making chain responsive

Appropriate direct store delivery

• Manufacturers and retailers are very close
• Lead time critical
• Demand from a retailer is high enough to require FTL

1. 7Dream.com concept

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The US vs Japan

• Stores in Japan - 10615
• Stores in US - 5798
• Japan will be more convenient depending on proximity and number of stores
• Transportation cost in the US will be more as the distribution center is different and consumers prefer home delivery
• Store density area ratio is more in Japan than in the US, making it inconvenient for US customers to pick up from stores

6.