This presentation analyses the Supply Chain Management strategy followed at Seven-Eleven , Japan .

1. Seven eleven japan co Sourabh Jain , 10HM30 ShirsenduSahoo , 10HM27

2. 1) What are the ways in which a convenience store can be responsive and what are the risks associated ? High Density of Stores in a given area . Efficient and rapid collection , process and feedback of POS data . Multiple deliveries to all stores of fast moving items like food . RISK : Cost management , Quality to be maintained , correct data analysis

3. 2)Is 7-11 trying to micromatch supply and demand with rapid replenishments . What are the risks ? The demand for goods like food stuff is continuous but varies very quickly even within a day . In order to satisfy this fluctuating demand , the distribution system of 7-11 is very responsive and is supported by the IT system . RISK : High costs of operation . If IT system fails , this idea will not work .

4. 3)What has 7 11 done in its choice of facility location , inventory management , transportation and information infrastructure to support its SCM strategy ? Market Dominance strategy : Establish stores in areas where there are already stores. Total Information System : Installed in every outlet and linked to HQ , Suppliers and 7-11 distribution centers . Uses ISDN to collect , process and feed back POS data quickly . Inventory Management : Rapidly moving items were kept in enough quantities while slow moving items would be replaced by new ones . The basis is the TIS .

5. Distribution System : Flexible to alter delivery schedules . Store orders , supplier immediately receives order and sends order by truck to Distribution center . Combined Delivery System : Delivery of products from different suppliers was directed into a single truck . All deliveries were done at off peak hours and one truck delivered to many stores in one trip .

6. 4)Why 7-11 does not follow Direct-Store delivery , Why does it use Distribution centres and what are benefits of this policy ? When is Direct Store Delivery better ? Combined Distribution centers was introduced by 7-11 so that it always had fresh products ie offer short replenishment cycle times . It also allowed for careful tracking of sales . With Direct Store Delivery , the stores don’t need to maintain a distribution system as manufacturers themselves take care of that . So there is cost efficiency , but responsiveness of manufacturers to fluctuating demand is suspect…

7. 5)Review 7dream . Will it be more successful in US or Japan , why ? 7Dream is an e-commerce company of 7-11 which allowed 7-11 store customers to pick up their online purchases at the local convenience store rather than have home delivery . It uses the existing distribution system and hence will not add significantly to 7-11’s costs . Also the stores are easily accessible .

8. We believe that 7-dream will be more popular in Japan because : 1) Store density is higher than that in US . So accessibility is better . 2) Americans do not mind having the product delivered directly to their home . They would not go all the way to a store to pickup some item when for a few dollars , somebody would just deliver it to you ….

9. 6)Pros and cons of introducing CDC’s in US .Stores are also supplied by wholesalers and DSD by makers . Pros : Ensures Fresh supply of items Operational efficiency Cons : Wholesalers may have issues because of these distribution centers Manufacturers may prefer Direct Store Delivery as they have more control here .

10. 7)Pros and cons of having a distributor replenish convenience stores vs 7-11 managing its own distribution function ? Pros : Managing the distribution system is entirely the distributor’s headache and not 7-11’s May be cost effective. Cons : Less control over replenishment cycles and / or quality of items May not be as responsive as having own distribution function .