I THUMBS UP AND LEAVE POSITIVE FEEDBACK FOR THE ANSWERS TO STUDY QUESTIONS 5-7!
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I THUMBS UP AND LEAVE POSITIVE FEEDBACK FOR THE ANSWERS TO STUDY QUESTIONS 5-7!
SUPPLY CHAIN MANAGEMENT
THE STUDY QUESTIONS ARE LOCATED at THE END OF THE CASE, THE CASE PROVIDES ALL THE INFORMATION REQUIRED!
THE STUDY QUESTIONS 5-7 ARE WHAT I NEED ANSWERED
19,000. Globally, the firm had more than 60,000 conve- nience stores by September 2016 and was the world's largest chain in terms of retail outlets. Global revenues for Seven&i from convenience store operations were 2,675 billion yen in 2016 with an operating income of 352 billion yen. The firm opened over 1,600 new stores in Japan in 2016. Customer visits to Seven-Eleven out- lets averaged more than 1,000 per store per day in 2013 TABLE 3-4 Stores and Annual Sales for Seven- Eleven Japan Number of Stores Annual Sales (billion yen) Year 1974 1979 1984 Company History and Profile Both Ito-Yokado and Seven-Eleven Japan were 989 founded by Masatoshi Ito. He started his retail empire 1994 after World War II, when he joined his mother and elder brother and began to work in a small clothing store in Tokyo. By 1960, he was in sole control, and the single store had grown into a S3 million company. After a trip to 2009 the United States in 1961, Ito became convinced that superstores were the wave of the future. At that time, Japan was still dominated by mom-and-pop stores. Ito's 2,299 3,954 5,905 8,153 10,826 12,753 13,232 14,005 15,072 16,086 16,319 17,491 109.8 386.7 780.3 1,392.3 1,963.9 2,440.8 2,784.9 2,947.6 ,280.5 3,508.4 3,781.2 4,008.2 1999 2004 2010 chain of superstores in the Tokyo area was instantly popu 2012 lar and soon constituted the core of Ito-Yokado's retail operations 2013 2014 2015 In 1972, Ito first approached the Southland Corpo- ration about the possibility of opening Seven-Eleven convenience stores in Japan. After rejecting his initial Source: "Based on Seven Eleven Japan website http://www.sej.co request, Southland agreed in 1973 to a licensing agree- ment. In exchange for 0.6 percent of total sales, South- land gave Ito exclusive rights throughout Japan. In May Southland's common stock for a total price of 1974, the first Seven-Eleven convenience store opened in $430 million Tokyo. This new concept was an immediate hit in Japan, and Seven-Eleven Japan experienced tremendous through a stock transfer combining Seven-Eleven Japan, growth. By 1979, there were already 591 Seven-Eleven Ito-Yokado, and Denny's Japan. In 2015, convenience stores in Japan; by 1984, there were 2,001. Rapid growth store operations from Seven-Eleven Japan and other continued (Table 3-4), resulting in 19,166 stores by 2016. subsidiaries in North America and China contributed jp/company/en/s.growth.html In 2005, Seven & i Holdings was established On October 24, 1990, the Southland Corporation entered into bankruptcy protection. Southland asked for Ito-Yokado's help, and on March 5, 1991, IYG Holding was formed by Seven-Eleven Japan (48 percent) and Ito-Yokado (52 percent). IYG acquired 70 percent of 44.3 percent of total revenues from operations and 88.6 percent of operating income for the Seven & i Holdings Company (see Table 3-5 for details). The relative perfor mance of convenience stores within Japanese operations was even more dominant. The discrepancy between TABLE 3-5 Financial Figures for Seven & i (2013-2015) For Fiscal Years Ending February 28/29 Total revenues (billion yen) Total operating income (billion yen) Convenience store revenues (billion yen) Convenience store operating income (billion yen) Source: Based on Seven& i Annual Report 2016. 2013 4,991.6 295.7 1,899.5 2014 5,631.8 339.6 2,727.8 276.7 2015 6,038.9 343.3 2,675.9 304.1Explanation / Answer
Ans 5.
The Seven-dream concept is whereby the customers can pick up their online purchased packages at the local convenience stores instead of getting them delivered to their doorstep. The Seven eleven used it encourage customers to visit their store and pick up their online purchases. A survey conducted in Japan also highlighted that 92% of customers prefer to pick up their online purchases at the local convenience stores.
This concept is suitable for Japan because the Japanese consumer visits the local convenience store very regularly. Further, they have many stores and have a high density of stores in most urban areas. In the USA most stores are located at distant locations and the consumers in the USA would prefer to have a package delivered to their home or place of work. The rural areas where stores are located far off locales would be inconvenient for the US consumer. The population and number of seven eleven stores per square kilometer are much more in Japan compared to the USA.
Ans 6. In Japan, Seven eleven followed a Combined delivery system whereby deliveries of similar products from different suppliers were put in a similar temperature controlled truck. The products were divided into 4 categories namely frozen food, chilled food, normal temperature food, and warm food. This ensured delivery of products in good condition and in good quality. The freshness of the food was assured. The products were scanned nad delivered without presence of the delivery boy. It saved costs and ensured regular supply of fresh stocks depending on requirement of the convenience store. The goods were directly transferred from the supplier truck to seven eleven trucks to deliver to convenience stores. The deliveries were made during off-peak time.
The logistics system in the US followed a direct store delivery system where the manufacturers will supply to the stores directly.
The CDC system si very suitable for US market to because of the following reasons:
The cons are as follows:
The system would be successful in urban and densely populated areas where the replenishment is more frequent and the logistics cost would be low. In remote areas, they can use the manufacturer distribution for temperature-controlled items. For other products, they can follow the CDC system where the products have a better shelf life. They can follow a combination of both the systems to ensure regular and cost-effective distribution.
Ans 7.
The pros of having a distributor replenish the convenience stores rather than follow seven eleven system have the following advantages:
The disadvantages are as follows:
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