SCPC Group Assignment -1

Group - 8

PGMPW-23-14 Arti Deshpande

PGPM-22-066 Somesh Kumar
PGPM-22-149 Venkata Naga Harischandra Prasad Vavintaparthi
PGPM-22-079 Abhishek Srivastava

Question - 1)

Convenience store (Seven Eleven) vs. Destination Stores (Walmart) : What are customer expectations
from each ? Which is likely to require a responsive supply chain?

Destination Store : It carries a wide range of products across various categories. The size of the store is
generally quite large as it caters a large number of customers at a go. It serves budget customers as well as
customers looking for high end products. These stores are generally open for a fixed duration in a day. It
provides a wide variety of products catering to all budget type customers.

Convenience stores : It carries limited and high selling products. The size of the store is small and it targets
quick purchases by the customers hence it is located at the busy locations. These stores are generally open
24 hours a day and the products are replenished at regular intervals in a day. It has a different product mix
but generally stores the high selling products.

The customer’s expectation from the destination store is the wide variety of products across different budget
types whereas in the convenience store, the customer looks for quick purchases across different product
types and wants the store at nearby locations for their convenience.

Convenience stores require a responsive supply chain.

Question - 2

2a) How much do food items contribute to the sale? What kind of responsiveness do they require, and
why?

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Food items accounted for 69.3% of total sales in 2015. The supply chain should be efficient as the demand
and supply uncertainties for food & grocery items are low. As the food items have a massive share in sales,
the responsiveness required for food items in the supply chain is crucial due to their perishable nature and
the necessity to maintain freshness and minimize waste, which can be achieved as follows.

1. Better demand forecasting: Using historical sales data, trends, and customer insights, can help better
forecast the demand and ensure an adequate and timely supply of food items.

2. Inventory management & supplier collaboration: Store computers linked with the 7-Eleven network
track inventory and sales, orders placed, and provide detailed analysis of POS data. Immediate transmission
of orders to the suppliers ensures quick response times and minimizes order processing delays.

3. Efficient transportation & consolidated deliveries: Transfleet Ltd. ensures access to a reliable fleet of
trucks minimizing delivery lead times, and, coupled with the combined delivery system, helps efficiently
transport temperature-controlled trucks. Deliveries are done in off-peak hours without waiting, thanks to
scanner terminals.

2b) What is an Area Dominance Strategy ? How does that help Seven Eleven Japan be more responsive
while keeping servicing costs within acceptable limits?

Area dominance strategy: It is a strategy in which an organization establishes a significant market share in a
given region/area and outperforms competitors in market awareness & presence, and customer reach.

7-Eleven's area dominance approach boosts responsiveness by lowering transit time and costs through the
high-density market presence and retail clustering. Centralized distribution centers increase distribution
efficiency while minimizing stockouts. Targeting specific markets also improves brand recognition and
franchise support services and maximizes advertising effectiveness. Furthermore, the dominating market
position hinders rivals, thus decreasing the competitive pressure and allowing 7-Eleven to keep servicing
rates reasonable.

c. How do the Integrated store system and replenishment processes at the stores help
them in being responsive ?

- It helps the store to keep the stock of the product at regular intervals and the information is sent to
the central monitoring team which ensures the regular replenishment of the products at the stores so
that stocks are updated at the store per the customer’s requirement at regular intervals.

d. How is Supplier->DC->store transportation organized to provide quick replenishment to

stores?

- The store places the order which is immediately shared with the suppliers.

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 - The suppliers pack all the orders of a store in one truck and send them to one of 158 distribution
centers of seven eleven.
- The products are cross docked from the supplier’s truck to Seven Eleven’s distribution truck,
Transfleet Ltd.
- Similar types of products from different suppliers are kept in one type of truck which could be
temperature sensitive trucks.
- The temperature sensitive products are sent to store thrice a day whereas the non sensitive products
are sent once every day.
- Frozen products are delivered between three to seven times in a week and each truck delivers orders
for multiple stores.

Question - 3 ) How should a convenience store chain plan its operations in India? (TG & Positioning,
Product mix, Store size and locations, Sourcing, supply planning and logistics, Information systems)
(Max 1 slide or 150 words on each)

Answer:- By considering below factors mentioned, convenience store chains in India can effectively plan their
operations, provide a seamless shopping experience, and cater to the diverse needs of Indian consumers:-

1. Target Group and Positioning: We can segment people based on their preferences to buy at
cheaper rate, once in a month, daily but in smaller quantities, impulse buying, urgent buying, on the go
buying, out of different identified segments we can target audience who needs convenience more at a
particular point over the price. Convenience stores are useful for customers who need products nearby
without the need to travel for the same, need to make a purchase at the last minute or while on the go to
the office/home or schools, or travelers who need food refreshment on their way. We can target people
who travel daily for work with the demographic of age 25 to 45 both men and women, college and high
school going kids who can keep up products while on the way to their homes/offices/schools/colleges.
Particularly: Working professionals, students, daily commuters/ office employees/ tourists.

2. Product Mix: Convenience stores should have higher SKUs (more variety) typical 7-eleven
stores have 3000 SKUs. We can broadly categories Food and Non-Food items. We further categories
food items in processed food/ hot food counters/ Fresh-daily food/ fast food/ Ready to eat food. Product
mix should be responsive to the local people's needs.

Food Items-

I. Processed snacks and beverages: Chips, Chocolates, candies, biscuits, energy

bars, soft drinks, ice cream, dairy products.

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 II. Ready to Eat Food (Microwavable Snack): Maggi, Upma, Poha, soups, sandwiches,
wraps.

III. Hot Serving: Khichadi, food plate, pizza, sandwiches, tea, coffee.

IV. Basic Groceries: Bread, Milk, Eggs, Cut vegetables, sprouts, meat, spices, rice,
wheat flour, Sauces, one or two types of lentils.

V. Stationary: Pen, Pencil, Books, binders, notebooks, folders.

VI. Mobile phone accessories: Earphones, Charges, adapters cables, power banks.

VII. Personal care- soaps, hygiene products, perfumes.

VIII. Over the counter medicines, photocopy machines, First aid items.

3. Store Size and Location: Store location is very crucial as it shall be very easily accessible, locations
like transportation hub, railway station, metro station, bus depot, commercial (office) areas, near schools,
colleges, near to the traffic signals, cross roads, near hospitals, petrol pumps, proximity to residential
areas to ensure that target group can easily visit shops. Income level demographics shall be considered
where customer’s willingness to pay for convenience is more over cheaper rates.

Size: As convenience stores work on nil to least inventory and higher replenishment policy, without requiring
to keep any safety stock, with this it can be operated with smaller area (size) required only to display all the
available SKUs, display arrangement should be such that products are easily visible and accessible. Store
can have one- two food tables to keep hot plates. Vertical spaces can also be utilized to display more items

4. Sourcing, Supply Planning, and Logistics:

It is important to establish strong relationships with local suppliers to source products efficiently and
maintain a fresh inventory i.e major focus should be on procurement of Goods Locally i.e within a radius of
50-100 Km. This can be achieved through careful vendor selection, negotiation of favorable terms, and
regular communication.

Along with this, Supply planning should involve accurately forecasting demand based on historical sales
data, market trends, and seasonality. By implementing a demand forecasting system, the convenience store
chain can optimize inventory levels, minimize stockouts, and avoid excessive inventory. Leveraging
technology to automate the ordering process will streamline operations and reduce manual errors.

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Logistics should focus on developing a robust distribution network that caters to the store locations across
India. This includes establishing regional distribution centers strategically positioned to ensure timely
deliveries. Efficient routing and scheduling systems should be in place to minimize transportation costs and
ensure on-time deliveries to each convenience store.

5. Information Systems for a Convenience Store Chain:

Implementing a robust information system is very important for a convenience store chain's operations in
India. Stores will have Competitive advantages if they will be Investing in a comprehensive retail
management software is essential, encompassing modules for inventory management, sales tracking, and
customer relationship management.

The inventory management module enables real-time tracking of stock levels, generating automated alerts
for reordering, and facilitating seamless coordination with suppliers. It provides insights into product
performance, allowing the Convenience store chain to identify fast-moving items and adjust procurement
strategies accordingly.

The sales tracking module captures sales data at each store, enabling analysis of product performance,
identification of trends, and optimization of pricing and promotions. Integration with a loyalty program or
customer database enhances customer engagement and enables personalized marketing campaigns.

An integrated information system empowers the convenience store chain to make data-driven decisions,
streamline operations, and enhance the overall customer experience across its stores in India.