7 eleven, Service Operations Management

1. 7 Eleven
Give the customers what they want, when and
where they want it.
Joe C. Thompson Jr. | 7-Eleven Founder

2. Freshness
Cleanliness
Product Assortment
Four
Fundamental
Rules
Friendly Service

3. American, Japanese International chain of
convenience stores

6. Pillars of creation of “Close & Convenient”
stores
A Management
System
Product
Development
Daily Services
1.Unique system called Tanpin Kanri
(item-by-item management)
2.Franchise Method
3.Store Opening Method
4.Distribution System
1.Team MD(Merchandising)
2.Focus on taste, quality and safety
3.7 Gold, 7 Premium
4.7 Lifestyle, Daily Fresh Foods
1.Omni-Channel Distribution
2.Pick up Station
3.Meal, Home delivery service
4.Mobile Store Service

7. 7-Eleven Japan Co.
Seven- Eleven’s Market Dominance Strategy:
Cluster of 50-60 stores supported by a distribution center (DC).
Such clustering gave Seven Eleven Japan a high-density market
presence and allowed it to operate an efficient distribution
Boosted distribution efficiency
Better franchisee
support
Improved Brand
awareness
Increased system
efficiency
Created entry
barriers
Payment of Bills –
Electricity, Telephone, Gas
Payment: Internet shopping
ATMs at almost all the stores
Meal Delivery service for
aging population of Japan
Pick up location for parcel
delivery
Services offered:

8. 7-Eleven Japan Franchise System
 SEJ and franchisees are on an equal footing, and there is a clear division of roles
 The focus is not on increasing sales but on increasing gross profit, fostering co-existence and co-prosperity among all parties

9. Facility Location
Seven- Eleven Japan network included both company-owned stores &
third-party owned franchise
Has cluster of stores (50-60) in small geographical area supported
by a Distribution Centre (DC)
CDCs consolidate product from different vendors and combine
them all on to one truck
Driving time from the CDCs to the store not more than 90 mins
Good judgement in knowing which tasks to be outsourced and what to
be kept in house. Tasks including supplier evaluation and dismissal.
Inventory Management
7-Eleven Japan Supply Chain
•No inventory
•Highly
efficient
At DC
•All inventory,
at all stores,
at all times
At Store
Supplier
(Chilled Temp)
Supplier
(Warm Temp)
Supplier
(Frozen Temp)
Supplier
(Room Temp)
Distribution
Center
Distribution Strategy

10. 7-Eleven Distribution System
Value Net Integrator Model
“The Value Net Integrator coordinates activities across the value net by gathering, synthesizing, and distributing information”
 Information about the sale of goods and services can be managed separately from the physical sale of those goods
and services.
• goods and services travel
from manufacturer to
distributor to merchant to
customer
• information about the
members of the physical
chain is gathered
analyzed and distributed
The model identifies two
separate value chains

11. Collect data
• gather sales
information
from all
franchisees
Use data
• makes this
information
available to
suppliers of
goods in
exchange for
favorable
pricing
Benefit
collective
bargaining
power over
suppliers
valuable, real-
time marketing
data about how
its products are
selling.
Franchiser
Supplier
 The 7-Eleven value net ensures that hot selling products can be delivered overnight, allowing the
franchisees to operate lean.
 By continually improving its operation, 7-Eleven stays ahead of competition
7-Eleven Distribution System
Value Net Integrator Model(cont.)

12.  The 7-eleven Japan have a number of ways for gathering
information – what customer wants at the right time.
 Customer orders are taken at :
 Kiosks in Konbini outlets
 Konbini websites
 Mobile portals.
 Data collected from these channels are synthesized in a
central office and various orders are grouped and placed as
required to different suppliers and allies.
7-Eleven Distribution System
Value Net Integrator Model(cont.)
overcome space crunch issues, avoid extra
stocking and additional inventory costs.
effectively plan their distribution pattern in
the existing distribution network
helped the firm to expand the product range
helped diversion into goods which wasn’t
expected to be sold on convenience stores
Benefits

13. Use of Information Technology
1. Point Of Sales System
Manages thousands of products, the processing of
orders from stores, and the collection and analysis of
daily sales data,
Capture data on customers' purchases and analyzes
them to learn more about customer preferences and
sales trends.
The POS systems garner the information advantage for the
company in developing the original food items better and more
quickly than its competitors, thus making premium pricing viable. Main Register
The main register has all price
information stored inside, so
the price information is fast
retrieved when a bar code is
read by a scanner.
Sub Register
If the main register breaks
down, the sub register

14. Use of Information Technology
2. Graphic Order Terminal
3. Scanner Terminal
Delivered information about a weather
forecast, events near a store, and a campaign
of a product
Managed inventory through their
graphic order terminal and receive
inventory using the scanner terminal.

15. Use of Information Technology
4. Store Computer
“Integrated Services Digital Network is a set of communication standards for simultaneous digital transmission of voice,
video, data, and other network services over the traditional circuits of the public switched telephone network”
 Store Computer linked to the ISDN network,
the POS register, the graphic order terminal,
and the scanner terminal.
 It communicated between the various input
sources, tracked store inventory and sales,
placed orders, provided detailed analysis of
POS data, and maintained and regulated store
equipment
 Satellite telecommunication were also used to
connect to corporate headquarters, suppliers
and logistics

16. Integrated Information System:
How it helped?
Linked the POS register, EOB, and the scanner terminal to the ISDN network
Tracked store inventory and sales, placed orders, and provided detailed analysis of POS data
Dynamic shelving and merchandizing
• Sales trend by time and day -> Adjust the merchandising mix on the shelves according to consumption patterns
• Sales trends for new product -> decide whether to keep or drop an item
• Top-selling items -> Keep in-stock
New Product Development
• Identify slow and non-moving items ->allowed a store to convert shelf space to introduce new items - About half of 3000 SKUs are replaced by new ones
every year
• forecast future consumer trends and to assist manufacturers in new-product development
• Tailor the merchandise selection to the tastes and needs of the local market localized promotions
Localized Promotion: customer demographics information are correlated and substituted along with local events and other
region-specific data

17. •The 7 Eleven Stick – Order anywhere anytime
•Improvement in Staffing Process
•Product Assortments – more a bane than boon
• 7 Eleven at India!
Suggestions

18. Presented by:
Brijesh R G
Chakshu Raj
Lokendra Singh Rathore
Mythili V
Rasika Sonkusale
Santosh Kumar