Supply Chain Drivers

Logistical Drivers

Facilities:

• Facilities were at 2 levels

• Distribution Centres (DCs)

These are less in number and held no inventory.  They serve the stores in their cluster. They have increased the efficiency as

• served stores in its cluster
• Increased Efficiency as opposed to Responsiveness

• Stores

Each cluster of 50 – 60 stores were supported by a Distribution Centre.

Seven-Eleven stores were more in numbers, located in abundance and dominated the market. They followed a Market Dominance Strategy while entering a new market by making 50-60 clusters at each locality.

b) Distribution Centre: Each cluster of 50 – 60 stores were supported by a Distribution Centre.

c) ATM Service of Seven Bank: Each convenience store was equipped with an ATM counter of the company owned Seven Bank.

Inventory:

a) Stocking: Inventory from suppliers were stocked in Central Distribution Centre which catered to a cluster of stores.

b) Varied choice of SKUs depending on Local Customer Demand: Seven-Eleven offered a choice from a set of 5000 SKUs.

c) Accurate Inventory Planning through Store Information System: It allowed Seven-Eleven to match the demand and supply. Store staff adjusted the merchandizing mix in according to the time of the day and the selling pattern of the store. Identification of Non Moving Items made it easier for them to utilize the full shelf space.

Transportation:

Two stage transportation model.

Stage 1: Supplier to distribution center

Stage 2: Distribution center to Seven-Eleven physical stores.

a) Use of Temperature Controlled Trucks: There were four categories of temperature controlled trucks i) Frozen Food ii) Chilled Food iii) Room Temperature Food iv) Warm Food.

b) Controlled Use of Trucks per Store: The trucks per Store depended upon the sales volume.

IV. Cross Functional Drivers

Information:

a) Use of ISDN: Initially in 1998, Seven Eleven Japan used 5th generation IT system but later it build a very strong Information System- Integrated Service Digital Network. It is a two-way, high speed, online communication capability which enabled Seven Eleven Japan to collect, process and feed-back POS data quickly. It collected Information regarding

i) Graphic Order Terminal: For store managers to place order on suppliers.

ii) Scanner Terminal: Used to receive products coming in from the Central Distribution Centre.

iii) Store Computer: Communication among various input sources and tracking of order, inventory and Point of Sales.

iv) POS (Point of Sales) Register: Used to retrieve the purchased items’ information from the store computer and the time of sale was automatically recorded. In addition, the

cashier recorded the age and sex of the customer. And the data was analysed accordingly.

b) Distinct Analysis of Store Data and Selling Pattern: Total information system linked stores to headquarters, suppliers and distribution centres. Customer tracking which included information regarding customer’s age, gender and time of purchase. Data was then sent by store manager to Headquarters where Headquarter manager segregate the data by region, products and time and after analysing the data manager would sent back the analysis to each store. Data analysis helped in understanding sales trend, sales pattern for different types of products, analysis of sales and no. of customers over time, products which are demanded the most in morning hours, in afternoon hours and in evening hours.