7-eleven store

8/11/2019 7-Eleven Store

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7-Eleven Store

A case study


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1. Increasing Responsiveness of a Convenience Store Chain

Safety Stock and Seasonal Inventory : To prevent stock out

Risk : Increased holding cost and locking of assest

Demand Planning: Trend projections and forecasting by analyzing past sales, trends and seaso

Risk: High error / Quality of data

Proper Distribution and warehouse model: 7-eleven has dedicated warehouse for every 50 s

Risk: High capital investment

Rapid Replenishment : This allows for centralization of cooking capacity and low levels of inv

Risk: High Replenishment Cost


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2. SEVEN-ELEVEN'S SUPPLY CHAIN STRATEGY IN JAPAN CAN BE DESAS ATTEMPTING TO MICRO-MATCH SUPPLY AND DEMAND USING R

REPLENISHMENT. WHAT ARE SOME RISKS ASSOCIATED WITH THIS C

It may lead to Bullwhip effect

Supplier inefficiency Risk

Pilferage / shrinkage and damage

More no. of replenishment cycles = more cost


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3. WHAT HAS SEVEN-ELEVEN DONE IN ITS CHOICE OF FACILITY LOCINVENTORY MANAGEMENT, TRANSPORTATION, AND INFORMAT

INFRASTRUCTURE TO DEVELOP CAPABILITIES THAT SUPPORT ITS S

CHAIN STRATEGY IN JAPAN?

Area-dominance strategy of opening at least 50 to 60 stores in an area helps with the cost of replenishment.

All manufacturing facilities are centralized to get the maximum benefit of capacityaggregation

Seven-Eleven requires all suppliers to deliver to the DC where products are sorted

temperature. This reduces the outbound transportation cost The information infrastructure is set up to allow store managers to place orders ba

analysis of consumption data

Increase in services like electricity bill payment and Seven bank has provided custoone-stop store for all their needs.


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4. SEVEN-ELEVEN DOES NOT ALLOW DIRECT STORE DELIVERY IN JWITH ALL PRODUCTS FLOWING THROUGH ITS DISTRIBUTION CENTEBENEFIT DOES SEVEN-ELEVEN DERIVE FROM THIS POLICY? WHEN IS

STORE DELIVERY MORE APPROPRIATE?

Better utilization of the outbound trucks

Segregation of food products at the DC based on temperature

Reduced cost of receiving at stores due to less frequent visits

Each outbound truck made deliveries to multiple retail stores

DSD is most appropriate when -

stores are large

nearly-full truck load quantities are coming from a supplier to a store


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5. WHAT DO YOU THINK ABOUT THE 7DREAM CONCEPT FOR SEVEN-JAPAN? FROM A SUPPLY CHAIN PERSPECTIVE, IS IT LIKELY TO BE M

SUCCESSFUL IN JAPAN OR THE UNITED STATES? WHY?

Japanese customers are happy to receive their shipments at the local convenience s

Increased utilization of outbound transportation

lower cost alternative to having a package carrier deliver the product at home

Might be more successful in Japan given- the existing distribution network of Seven-Eleven

frequency of visits by customers. The high visit frequency ensures that packages are not ocvaluable store shelf space for a long time

Frequent visits ensure that the marginal cost to the customer of picking up at a Japanese Seis small


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6. SEVEN-ELEVEN IS ATTEMPTING TO DUPLICATE THEIR SUCCESSFUL JAPASUPPLY CHAIN STRUCTURE IN THE UNITED STATES WITH THE INTRODUCTCDCS. WHAT ARE THE PROS AND CONS OF THIS APPROACH? KEEP IN MIND

STORES ARE ALSO REPLENISHED BY WHOLESALERS AND DSD BY MANUFAC

Lower density of U.S. Seven-Eleven stores

Larger distance between stores

Seven-Eleven stores are getting both direct store deliveries as well as wholesaler de

Setting up its own DCs does not allow Seven-Eleven to get the same level of tranaggregation as it gets in Japan


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7. THE UNITED STATES HAS FOOD SERVICE DISTRIBUTORS LIKE MCLANE THREPLENISH CONVENIENCE STORES. WHAT ARE THE PROS AND CONS TO HADISTRIBUTOR REPLENISH CONVENIENCE STORES VERSUS A COMPANY LIKE

ELEVEN MANAGING ITS OWN DISTRIBUTION FUNCTION?

Pros

Distributor is able to aggregate deliveries across many competing sto

Cons

The big disadvantage to having all deliveries done through a distributhat Seven-Eleven is unable to exploit having a large number of stor


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Thank You

7-eleven store

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