Seven - Eleven Case Study

1.
A convenience store chain attempts to be responsive and provide customers

what they need, when they need it, where they need it. What are some different
ways that a convenience store supply chain can be responsive? What are some
risks in each case?
A store can be more responsive by doing some activities that Seven Eleven did,
for example: adding a variety of services and products that customers can obtain at
stores, implementing an advanced information technology in order to better match supply
with demand and offering a long stock keeping units depending on local customer
demand.
There is a possibility of a risk when the supply chain and demand are not synchronized,
inventory excesses or shortages occur. If the store does not have the correct information
about ordering and replenishment, the supply chain cannot respond quickly to changes
in customer demand and also can perform a wrong forecast.
2. 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?
There is a high transportation cost because they have to use it to visit each location
(store) many times in a day to deliver the orders quickly. Also, high investment needs to
be made in an advanced technology in order to share accurate information within the
whole supply chain.
3. What has Seven-Eleven done in its choice of facility location, inventory

management, transportation, and information infrastructure to develop capabilities
that support its supply chain strategy in Japan?
Seven Eleven has a market-dominance strategy to ensure efficiency, entry into

any new market was built around a cluster of 50 to 60 stores supported by a distribution
center. Also, they opened the majority of its new stores in areas with existing cluster of
stores, offering an average of stock keeping units and increasing the number of original
items that were only available at their stores (depending on customer demand). Added a
variety of services that customer can obtain at its stores. On the other hand, in
transportation, the major objective was to carefully track sales of items, offered short
replenishment cycle times, the similar products were directed to a single temperature
controlled truck (there were four types) and reduced the number of vehicles required for
daily delivery service to each store, even though the delivery frequency of each items was
quite of high. Lastly, they used advanced information technology, this company simplified
its operations and attributes a significant success because this was installed to
headquarters, suppliers and distribution centers allowing to better match supply with
demand.
4. Seven Eleven does not allow direct store delivery in Japan with all products
flowing through its distribution center. What benefit does Seven Eleven derive from
this policy? When is direct store delivery more appropriate?
Replenishment cycle times are reduced, information of sales is more accurate and
time of delivery is quickly because vehicles are sent many times a day to each store. Also,
there is a total control of the entire supply chain and there is a minimum mismatch
between supply and demand. On the other hand, direct store delivery is more appropriate
for bigger retail stores because there are more of outbound trucks.
5. 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?
This concept is a good idea because exploits the distribution system and the stores
are more accessible to customers, picking up online purchases at the local convenience
store instead have them delivered to their homes. Also, this helps to the company to have
an efficient supply chain and reduced transportation cost.
I think this concept will be more successful in Japan than in United States because this a
smaller country and American people prefer home delivery of products that they ordered
online.
6. Seven-Eleven is attempting to duplicate the supply chain structure that has

succeeded in Japan in the United States with the introduction of CDCs. What are
the pros and cons of this approach? Keep in mind that stores are also replenished
by wholesalers and DSD by manufacturers.
There is no a high confidence level that duplication a structure of a supply chain

from one country to another will ensure the same success.
Pros:
 Accessibility to a wide variety of products.

 More responsiveness to customer demand due to proximity of distributors with
stores.
 Delivery in a timely fashion manner according to customer demand.
Cons:
 Larger distances between stores.

 Less control over replenishment cycles.
 Cost increases because there will be more transportation.
7. The United States has food service distributors like McLane that also replenish
convenience stores. What are the pros and cons to having a distributor replenish
convenience stores versus a company like Seven Eleven managing its own
distribution function?
Pros:
 Reduces transportation, labor/inventory costs.

 Company is able to focus on its core / objective.
Cons:
 There is a cost for the outsourcing service.

 Less control over supply and replenishment.
 Information across the whole supply chain is less accurate.
 Less responsiveness as could have if having their own distribution.

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1.

A convenience store chain attempts to be responsive and provide customers

2. Seven-Eleven’s supply chain strategy in Japan can be described as attempting

3. What has Seven-Eleven done in its choice of facility location, inventory

Seven Eleven has a market-dominance strategy to ensure efficiency, entry into

6. Seven-Eleven is attempting to duplicate the supply chain structure that has

There is no a high confidence level that duplication a structure of a supply chain

 Accessibility to a wide variety of products.

 Larger distances between stores.

 Reduces transportation, labor/inventory costs.

 There is a cost for the outsourcing service.

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