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Transcript of Seven-Eleven Case
Allows for quick easy transportation
Tracking of sales to allow short replenishment cycle.
Efficient transportation system
Four Temperature controlled trucks.
Went from needing 70 vehicles to needing 9 vehicles
Seven-Eleven Japan Co.
Our case study of Seven Eleven Japan Co.
Provide an answer to 5 study questions with regard to the discussed concepts
"A convenience store chain attempts to be responsive and provide customers with what they need, when they need it, where they need it. What are some different ways that a convenience story supply chain can be responsive? What are some risks in each case?"
"What has Seven-Eleven done in its choice of facility location, inventory management, transportation, ad information infrastructure to develop capabilities that support its supply chain strategy in Japan?"
"Seven-Eleven's supply chain strategy in Japan can be described as attempting to micro-match supply and demand using rapid replenishment. What are some risks associated with this choice?"
"Seven-Eleven does not allow direct store delivery in Japan but has all products flow through its distribution center. What benefit does Seven-Eleven derive from this policy? When is direct store delivery more appropriate?"
"What do you think about the 7dream concept for Seven-Eleven Japan? From a supply chain perspective, is it likely to be more successful in Japan or the United States? Why?"
by Stijn Käller, Floris Oei, Ebbie Tam
Supply chain strategy- Responsive
Holding a large stock of products:
enables to respond immediately to the customer demand.
having products exceeding the expiry date or falling behind with unsold products
larger stock results in higher costs
Fast replenishment through flexibility and shorter lead times:
respond on customer demand through rapid transportation
failing in responsiveness as the store is dependent on the suppliers' responsiveness
increase of costs as the store's bargaining power decreases, resulting in a higher compensation for the suppliers
What is 7dream?
We believe it would be most effective in Japan
Japan: 13,049 stores
United states:6,726 stores
Most risks will be caused by a sudden change in demand.
Seven-Eleven responds rapidly by making their stock bigger for the next period. They can end up with an excessive stock.
When responding to such a drop by decreasing stock for the next period, there could be a surplus in demand.
Other possible issues:
Delay in transportation.
High ransportation costs including gas, the vehicles and staff used to transport.
Distribution center gives
Aggregation of demand
Minimal disruption and delay
The possibility to respond quickly to the demand
Direct store delivery would be more appropriate if the items being delivered have special handling requirements. Also, when some supplier has a system that is in connection with the demand of a product, direct delivery could be possible.