Seven Eleven

Question 2: Seven-Eleven’s supply chain strategy in Japan can be described as attempting to
micro-match supply and demand using rapid replenishment. What are some risks associated
with this choice?
Answer:
Seven-Eleven refills its stores as frequently as it could by using advanced information and
distribution systems. Rapid demand using rapid replenishment concludes that the demand of
the product will be the same almost all days. Seven-Eleven’s supply chain is very responsive,
with store manager placing replenishment orders less than 12 hours before they are supplied.
However, this adds some risks using this strategy which are following:
1. Risk on alliance: Rapid restock needs cooperation’s from all stages of supply chain
without any mistake or hurdle. Furthermore, rapid replenishment acquires suppliers to
quickly respond and refill which will lead the risk of high cost of transportation.
Additionally, there are many other obstacles in rapid replenishment that increase the
risk factor for instance traffic and natural disasters.
2. Risk on system and management: Rapid replenishment requires technical trainers staff
for supply chain operations and for management as well. For supply chain, rapid refill
needs information which needs the support of integrated information system, on the
other hand for this rapid strategy staff needs to be trained and ready to adapt work
load, these factors will increase operation, maintenance, management and labor cost
respectively.
3. Risk on out of stock: Let’s assume if the demand of the product is increase on a
particular day because of some reason such as festival and tourist groups this will lead
the shortage of the particular product thus the chain disrupting the demand supply
pattern. This will increase the risk of losing customer, goodwill and damage corporate
image.
Question 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?
Answer:
Seven- Eleven has embraced an exceptionally responsive technique and has a complex yet
quick, incorporated supply chain design which upholds their procedure.
Supply chain strategy
Facilities plays a major part in supply chain regarding performance and efficiency. Companies
can gain more profit, if a product is manufactured or stored in only one location. Firstly, they
have immersed the area with many stores close to each other which helps customers and also
the delivery system for rapid replenishment. Seven- Eleven maintain its stores more efficiently
because continuity and stability of market development.
Inventory is the crucial part of supply chain, by the help of inventory amount of demand can be
increased which can satisfy the customer needs by having the product ready and available. This
can also cut short the cost of production and distribution. Seven-Eleven achieves high
responsiveness and surplus by utilizing its advanced information and distribution system.
Transportation has a significant role in supply chain efficiency. Company’s transportation has a
major role which also affects inventory and facility locations in the supply chain. Seven- Eleven
has temperature controlled truck which makes deliveries to multiple retail stores from
distribution center. Moreover, by using this distribution system seven-eleven reduce the
number of vehicle for daily delivery although the demand of each item is high. This reduces
the delivery cost and inventory as well.
Seven-Eleven uses data to further develop product accessibility while diminishing inventory.
The two-way, rapid, online communication ability of the coordinated administrations
advanced organization empowers seven-eleven to gather, cycle and input retail location
information rapidly. Next morning, Sales data gathered in each store and processed and ready
to analysis. In this way, the information system allows seven-eleven to better match supply
with demand.
Question 7: The United States has food service distributors that also replenish convenience
stores. What are the pros and cons to having a distributor replenish convenience stores versus
a company like 7-Eleven managing its own distribution function?
Answer:
With the outsourcing decision in mind an organization always tries to outsource activities that
lie beyond their core competencies and their scarce resources are wasted in performing tasks
that they are not specialized at. The huge hindrance to having everything conveyances done
through a merchant is that Seven-Eleven can't take advantage of having countless stores.
Advantages and Disadvantages of having a distributor replenish convenience stores as
comparison to Seven- Eleven managing its own distribution function are following:
Advantages:
1. Distributor manages and handle all distribution system.
2. Cost effectiveness.
3. Having a distributor restore convenience stores implies that they don't need to put
anything in distribution center, agile and work force.
4. The Proximity of distributors to distribution convenience stores added value as they very
well understand customer demands.
5. Outsourcing encourages specialization which improves quality. The company will be
able to focus on its core business.
Disadvantages:
1. Outsourcing the services will add additional cost to the company.
2. Replenishment and quality of the item will be sacrificed because of less control.
3. The drawback is the lack of control and relationship that must be managed at the store
level.
4. This also creates issues in managing other stores and customer services.

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Question 2: Seven-Eleven’s supply chain strategy in Japan can be described as attempting to

Supply chain strategy

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