Integrated Supply Chain Management

CASE STUDY

“7-Eleven Stocks Up on Tech

Savvy”

Presented by:

LEARNING GROUP 7 OF SECTION A (PGPM 08)

Company ProfileStarted in 1927 in TEXAS, U.S.A.World’s largest convenience chain store with outlets

around the worldLeader and innovator in using technology to serve

customersFocuses on paying attention to the fine details of

customers’ buying preferences to decide which products are carried in the store

Communicates both with the large suppliers as well as with the small suppliers by employing different modes of technology

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Situation AuditOver the past 10 years 7-Eleven has invested hundreds of

millions of Dollars in Technological upgrades due to which it can accurately predict even the next day’s sales of each of the 2500

products sold in its stores

7-Eleven’s stocks soared from $6 to $30 after its Japan licensee, Ito-Yokado, became the company’s major shareholder. It

flourished because of its retail approach of TANPIN KANRI/Retail Initiative, i.e. item-by-item management

Delivering new products is the key to repeat purchase

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Situation Audit (contd.)7-Eleven uses innovative technology like MOT and MC3000 scanners, both using MS Windows CE operating system; to

reduce time and labour

Has 5300 stores in U.S with Proliant servers from HP, WLAN and software for computer based training, which work

under Windows based Retail Information System

Shares some of its data analysis with few key suppliers like Anheuser-Busch, Kraft Foods and PepsiCo in a program

called 7-Exchange

Uses RFID (Radio Frequency Identification) for contactless payment acceptance

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

‘Tanpin Kanri’ serves competitive advantageRetailer Initiative aligns product assortment

with customers’ wantsEquity in decision-making among SC

participantsRetail Information System (RIS) tracks sales of

every item in store w.r.t customers’ buying preferences

Micromarket aided by technology CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Technology @ 7-Eleven

Technology @ 7-ElevenMobile Operations

Terminal Wireless device from NEC

Corporation Automation of counting

inventory and ordering Leads to cutting down on

time and labor costs MOT was implemented at

7-Eleven after trials for 15 months

Radio Frequency Identification

Used to tag items for inventory tracking (Wal-Mart)

Not suitable for item-by-item management

7-Eleven uses RFID for contactless payment

RFID-chip based credit cards

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Describe theInformation System

of7-Eleven store

Question No. 1

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Order transmitted

store in back office

Corporate Network and Data

Centre

TransportManufacturing

unit

DistributorDelivered

to the store

Recording inventory

information on the gadget

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Strategic Partnership with NEC

Leveraging Technology

Pilot Testing

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Communication System

• Usage of EDI and Web Vendor Terminal facilitates information flow between 7-Eleven and various suppliers

Transaction System

• Enables accurate order and inventory management

Decision Analysis

• Provide highly tailored, structured reports that can be used for very specific business situations

Question No. 2

Explain, in details,the achievement

of ‘4 goals’by 7-Eleven Store,

step by step

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Collaborate with supply chain partners

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Collect information on each product from production to delivery or purchase point, and provide complete visibility for all parties involved

Access any data in the system from a single point of contact

Analyze, plan activities, and make trade-offs based on information from the entire supply chain

Question No. 3

Give example, with elaboration,

of any organization,who has used the driver ‘Information’ effectively

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

To run a centralized information system, Wal-Mart and its top 100 suppliers use RFID labels to all shipments

To meet this requirement, vendors also use RFID printer/encoders to label cases and pallets that require EPC tags for Wal-Mart

An EPC RFID tag used by Wal-Mart

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A

Areas for its RFID implementation:

Shipments going to Wal-Mart divisions

Promotional displays and products going to Wal-Mart storesTests to see RFID's impact in improving category management in select areas

CASE: 7-Eleven Stocks Up on Tech Savvy LEARNING GROUP 7 OF SECTION A