1) A convenience store chain attempts to be responsive and provide customers wit
ID: 386078 • Letter: 1
Question
1) A convenience store chain attempts to be responsive and provide customers with what they need, when they need it, where they need it. What are some different ways that a convenience store supply chain can be responsive? What are some risks in each case?
2) 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?
3) Seven-Eleven does not allow direct store delivery in Japan but has all products flow though its distribution center. What benefit does Seven-Eleven derive from this policy? When is direct store delivery more appropriate?
4) What do you think about the 7 dream concept for Seven-Eleven in Japan? From a supply chain perspective, is it likely to be more successful in Japan or the United States? Why?
Explanation / Answer
1. A convinience store can be more responsive by doing exactly what seven eleven japan is doing. many locations, rapid replacement, appropriate technology deployment and an equally responsive supplier. the risks assosiated with this system are the costs coupled with demand uncertanity. If demand pattern change dramateically , or the customer base changes , then seven eleven is left with an operation that is not needed. In seven eleven japan case , multiple operations might be shuttered if an apartment building or large employer shuts down or relocates.
2. Seven eleven japan has chosen to operate a highly responsive operation and has chosen a supply chain design that supports this strategy. their facility location choices are to saturate an area with stores. thereby making it easy for customer to shop and their own delivery truck to move from store to store to replenish the inventory. Seven eleven inventory system is run on an information system that transmit directly to the supplier and distribution center. goods are produced using a pull system to replace what has been sold during delivery period. the transportation system is flexible to maximize responsiveness while also achieving efficency.
3. The benefit of delivery through its own distribution center is total control of the system, aggregation of demand and minimal disruption at the retail outlets. if several suppliers try to make two or three deliveries every day, it would detrect from the store managers ability to provide customer service. each of these suppliers likely to prefer their own way of doing the things, their own inventory system, truck seize etc, which would make things more difficult for seven eleven. system. the demand and production data would have to be shared rather than residing on seven eleven system from cardel to grave. for item that cannot be prepared quickely ,pull production may not provide the responsiveness that seven eleven desires. In this case the DC concept allow pulling of inventory which increases their overall service level while minimizing total system inventory of those item. direct store delivery might be appropriate if the item being delivered do not need bulk broken at the DC, have special handling requirements, or the supplier has the system that is consonent with seven eleven.
4. The 7 dream concept allow e commerce site to use seven eleven stores as drop off and collection point for japanese e commerce customer. it has been extremly sucessful, a rescent survey reveled that 92% customer of one e commerce company preffered to have their item shipped this way. it seems likely that this concept would work only for high density area. I can see it being established in congested, less safe urban areas for service like package delivery. Suburban customer in the US would likely find incredibly inconvinent and avoid it unless home delivery was not possible and the alternative was to pick up a package at local carrier office.
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