Answer 1

Logistics is considered a powerful tool for any organization in its supply

chain operations. Companies like Seven-Eleven, who have taken control of these logistics

and used them in their supply chain, have become more powerful and turned successful

against their revivals, as given in chapter 11 of operations management (Stevenson, hojati,

Cao). Seven-Eleven is one of the actual examples that have from time to time upgraded itself

in terms of rapid replenishment, technology up-gradation, online services/orders, and equally

responsible for their supply chain management. Wealthy cash customers do not have plenty

of time, so it is the responsibility of the company to match the demand and needs of the

customers depending upon the customers' lifestyles and preferences. It has initially started the

payment concept through electric mode and provides electric bills; after that, it has also

upgraded to receive payment in installments through credit companies. It has upgraded its

logistics and technology according to the customer's needs and preferences. The company has

also initiated electricity, gas, insurance premium, parcel pickup service, seven dream e-

commerce, etc. But as we all know, every concept comes with some cons, so managing these

resources is also not easy and risk in the account of organizations' operations. If considered

the storage capacity in the store, it can quickly assemble different varieties of fast food in a

single place and time or as per the demand. For example, McDonald's uses other burgers and

types of fast food available as the raw material used as per demand. But this is solely

depending upon the functioning of the local store. It is not a centralized functioning of the

organization and may hamper the proper utilization.

Another example is rapid replenishment which is a great initiative, and urgent

supply can be made to the stores as per the need and requirement without any hassle. But The

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risk here is the transportation cost and the holding cost of the raw materials. Companies have

also upgraded to the usage of Information technology, a centralized system for all the stores

predicting its demand and supply; it also shares the information related to products and

inventory with the stores, which is directly linked with the head office. But as in other cases

risk associated here is a network failure, data hacking, etc.

Answer 2

Some Risk associated are followings: -

Transportation facility: - There are sometimes when the supply could not happen on time

due to some uncertainties and unavoidable situations which can cause a delay in delivery of

the items.

High Cost: Such rapid replenishments also create huge costing while transporting the goods,

including costs such as a vehicle, staff, gas/petrol, etc.

Lack of space: - Sometimes stores order goods more than the requirements, and majorly they

do not have large storage capacity within the stores, which creates another risk in supply

choice.

Information system: - Seven-Eleven has started this service heavenly in which it has all the

information interlinked between its stores, distributors, suppliers, and head office.

Delay in-stock availability: - when there are sudden unexpected customers in the store buys

maximum products du to which the ordinary customers face difficulty in purchasing due to

out of stock. The store makes urgent replenishment of goods but takes time to deliver and

customer shifts to other stores.

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Answer 3

Seven-Eleven supply chain management decisions based on the followings strategies: -

Facility Location: - Any organization tries to lower its cost through different means, and the

same has been done by seven eleven. The organization has 60-70 approx. Stores in an area

will help in transportation cost and efficient distribution system, and it also helps increase

revenue generation due to its marketing strategies in that area. The Seven-Eleven store also

has both company and third-party stores.

Inventory Management: - The company has 290 manufacturing plants solely producing

goods for Seven eleven stores only. It becomes easy for Distribution centers to manage the

inventory because all the manufacturing facilities have been centralized, lowering the

inbound transportation cost. DCS also ensured rapid and reliable delivery through its 293

dedicated distribution centers for Seven-Eleven stores

Transportation: - The company has four types of foods: frozen goods, chilled goods, room

temperature processed foods, and warms foods. When store place order, it automatically

communicated to both supplier as well as D.C.s. The nutrition from D.C.s was loaded and

carried in single temperature-controlled trucks depending upon the food category and

delivered off-peak hrs, which reduce the cost of outbound transportation cost and handling

charges.

Information Infrastructure: - Seven-Eleven has installed and interlinked its process with its

suppliers, DCs, head office, and stores. This has helped the company deliver the goods as per

the demand and keep them proportionate. This has encouraged the company to lower its

transportation, receiving, and other costs.

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Answer 4

The company has introduced the method of D.C.s in its early

establishment of the company for better quality and quantity of fresh products. It is also

helpful because of rapid replenishment at the stores and helpful in tracking the sales and

matching supplies with the demand. Because Seven-Eleven has 50-60 stores in a particular

area that enables D.C.s to demand urgently. The store manager uses a graphical order

terminal to place an order received by both D.C.s and suppliers. Both act accordingly, and

suppliers can start production, and D.C.s can be ready for delivery to the stores. It gives the

company a high density of presence in the market and efficient distribution of products. It

also boots in brand awareness and system efficiency with improved advertisement

effectiveness.

Direct Store Delivery is most appropriate when the company focuses more on

cost efficiency; however, there is no supply chain like D.C.s are involved; it is the

responsibility of the Manufacturer to supply the goods to the store with quality and quantity.

It reduces the time spend from the manufacturing company to the store as no involvement of

distribution system and the product reached before the time. DSD can better manage products

like vegetables, eggs, etc., which require safe handling. At the same time, products like bread

and other dairy products reached before time, and the longer stayed in the store. DSD is more

appropriate when stores are large and require fully loaded quantities from supplier to store. It

is beneficial when the delivery location is fewer or fewer stores to visits than Seven Eleven

with more occasional product variations.

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Answer 5

The seven-Eleven concept of 7dream has been established in Japan as an

e-commerce company. Customers make an online order of the products, and it's being

delivered to their doorstep. But the majority of Japanese preferred going to stores only rather

than having at home. The primary intention behind this was to easily access the companies'

products to its customers and exploit the existing distribution system. According to a survey,

92 percent of customers pick up their online purchases at the local convenience store. While

in America, the company has introduced CDCs combined distribution centers after it fails in

starting. As compare, North America has only a 17 percent turnover rate with 50 in Japan.

Answer 6

The U.S market has lower density stores as compared with Japanese stores of

Seven-Eleven. The company has deliveries through wholesalers and DSD to its stores, but it

would only be beneficial when the company has its distribution system, like Japanese stores.

Pros

The CDCs in America is beneficial as the company has initiated this system

to supply fresh foods. These CDCs deliver items daily to the stores, including a sandwich,

bakery products, bread, etc. After the introduction of CDCs, America exceeded sales

turnover to 450$ million in 2003. CDCs have contributed to the operational efficiency of the

company. CDCs are cost-effective for the company in various ways as a large portion can be

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delivered in a single track. Customers can enjoy the wide variety of goods as they can easily

access multiple types of commodities in CDCs.

Cons

The Manufacturer can face difficulty here as they are not directly linked to the

store due to the distribution system. They do not have control over the supply, as their

primary task would be supplying products to the distribution system and their jobs. Majorly

manufacturers are more into direct delivery to the store because they will have sole control

over the products and other costs. Cost like wages to the staff or labor cost may increase as

the delivery of the foods is made every night at the stores.

Answer 7

Pros and Cons in having a distributor vs. seven-eleven own Distribution Systems.

Pros

Firstly, the foremost advantage is managing the distribution system or

supplying the products from Manufacturer to store solely in the hands of the individual and

not a headache of the store or company. The company experience this method as cost-

effective in which absolute pressure comes in the distribution system. Because having

distributor replenish convenience store means the company does not have to invest money on

anything except giving order and ensuring the delivery. The company gets more time to focus

on other parts and functions of the stores and company as the distributor takes the

responsibility of proper handling and quality of the products.

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Cons

The company indulges extra costs for outsourcing services through the

different distribution systems. The company has less control over the functioning of the

Distribution System over its replenishment and other controls. The service facility will not be

controlled by the company itself and have less look on that part. There will be no link

between the company and convenience stores and customers, and less responsive than having

its function.

References

1. Mini Monica, operations management

https://www.academia.edu/29506784/Assignment_Seven_Eleven_Japan_Co

2. Sourabh Jain (April 2016) SCM at 7 Eleven

https://www.slideshare.net/xtrmn8R/scm-at-7-eleven

3. Sunil Chopra (Feb 2015) Kellogg school of management, Seven-Eleven Japan co

4. Akbar abdurakhnow( December 2018) the Inha University of Tashkent, Supply chain

analysis of seven-eleven japan.

5. Stevenson, hojati, Cao ( ) Operations Management 6th Canadian edition, Mc Graw hill

education.