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?

Facility Location: Seven-Eleven stores are usually located in clusters
supported by a single distribution center enabling them to provide
efficient and responsive deliveries to their stores.

Inventory Management: They manage inventory through their graphic
order terminal and receive inventory using the scanner terminal. POS
register is used to track inventory levels. They have dedicated
manufacturing plants to produce fast food. Seven-eleven classifies their
inventory into four separate category.

Transportation: Store clustering around the distribution centers enables
Seven-Eleven to provide efficient and responsive deliveries to their stores.
They use a “combined delivery system” in which single temperature-
controlled trucks delivery one category of food to multiple stores. They
also make deliveries during off-peak hours. They also reduce delivery time
by using the scanner terminal. The DCs do not carry inventory, but are
really cross docking facilities.

Information Infrastructure: Information is used to manage its inventory
and coordinate the deliveries right from manufacturing to DC to the retail
store. It brings together all the information necessary to manage facilities,
transportation, manufacturing, and distribution. The basically use the
ISDN system which consists of:

1. Graphic order terminal: It is used to track and analyze POS data
and place orders with vendors and the DC. It is also used to
determine when to convert shelf space from slow to fast moving
items.

2. Scanner terminal: It improves the efficiency of the delivery
process.

3. Store computer: It is linked to the ISDN network and
communicates among the various input sources to track inventory,
sales, orders, etc.

4. POS register: It keeps up to date information on customer sales
and demographic information. In summary, the information system
is used to “driver the drivers”, bringing together all the information
necessary to manage facilities, transportation, manufacturing, and
distribution.

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

 Enables store managers to focus on the customer service rather than taking care of the suppliers.appropriate?  Gives control of the entire system. but only the DC. flexibility and responsiveness. .  Maintain fewer relationships as retail stores do not have to each work with vendors.  Facilitates coordination. It gives a better aggregation of demand and nominal disruption at the retail outlets.  DC concept allows pooling of inventory which increases their overall service level while minimizing total system inventory of those items.