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CASE STUDY 7- ELEVEN JAPAN CO.

PRESENTED BY: Richa Gupta Sana Sayeed Seema.P Satish.P Santosh.S Ranjith

INTRODUCTION

The goal of this case is to illustrate how a firm can be successful by structuring its supply chain to support its supply chain strategy. Once Seven-Eleven Japan decided to provide responsiveness by rapid replenishment, it then structured its facilities, inventory, information, and distribution to support this choice. The case also brings up the question of whether the same approach can work in the United States.

QUESTION.1

As responses (Convenience Store)

uncertainty

Local Capacity Local Inventory Rapid Replenishment

QUESTION 2

Risk associated with attempting to micro match supply and demand are:
High cost of Transportation

High order cost


As they have reduced vehicles they dont have any back up plan

IT Breakdown

QUESTION 3

FACILITIES

Less in no. Held no inventory Decreased efficiency

INVENTORY

No inventory Highly efficient Poor at responsivene ss

DC

DC

Stores

More in no. Kept inventory on shelf Located in abundance and dominated market More responsive

Stores

Kept daily stock Low inventory More efficient Very Responsive

C ONTI ..
TRANSPORTATION At two levels: -Vendors To DC and -DC to Store Mode: Trucks -High Frequency -High Responsiveness. INFORMATION Graphic Order Terminal Scanner Terminal Store computer POS Register

QUESTION 4
BENEFITS OF DISTRIBUTION CENTRES: Reduces complexity at store level Organizes store demand at DC Reduces complexity and cost for vendors to directly delivery at the store DSD MORE APPROPRIATE: Variety of product is less Order size is more Delivery destinations are few.

QUESTION 5

The 7dream concept allows e-commerce sites to use Seven-Eleven stores as drop-off and collection points for Japanese e-commerce customers. It has been extremely successful; a recent survey revealed that 92 percent of the customers of one e-commerce company preferred to have their items shipped this way.

C ONTI
This concept will be more successful in Japan as compared to US because :

Store density is high in Japan As store density is high, Seven-Eleven to offer a lower cost alternative to having a package carrier deliver the product at home

Suburban customers in the US would likely find it incredibly inconvenient and avoid it unless home delivery was not possible .

QUESTION 6
Pros Ensures fresh supply of items Operational efficiency It will reduce vehicles for distribution

C ONT
Cons: The difficulty of duplicating the Japan supply chain structure in the United States follows primarily from the much lower density of U.S. Seven-Eleven stores. Wholesalers may have issues because of the distribution centers Manufacturers may prefer DSD as they have more control here

QUESTION 7
Pros Cost effective CDC (Combined distribution centre) makes seven eleven networking strong. Given the lower density of stores, a distributor is able to aggregate deliveries across many competing stores.

C ONT
Cons Less control over replenishment cycles and over quality of items May not be responsive as having own distribution system

DCs should maintain inventory

CONCLUSION

Supply chain system adopted by 7-Eleven in Japan is very effective. Here they managed Efficiency & Responsiveness and by this achieved strategic fit. Thus we realize that by integrating the supply chain certain constraints of business can be minimized and customer service levels can be improved through executing information technology systems.