7 Eleven Japan supply chain management
1. In order for a convenience store chain to be responsive, which mean providing customer with what they need, when they need it and where they need it, some different ways to do are:
a) Have large inventory in terms of quantity, variety and quick replenishment in order to be able to respond quickly to customer demand
Risk associated: high cost: warehouse, transportation high Implied Demand Uncertainty: little time to react, risk of inventory that cannot be sold
b) Provide highly innovative products in order to provide customer with the best product and/or newest technology
Risk associated: high cost: investment into new product high Implied Demand Uncertainty: because the product is new, demand is uncertain
c) Provide high level of service quality
Risk associated: high cost: staff, training high Implied Demand Uncertainty: customer expectation becomes high over time
2. For Seven-Eleven Japan, when trying to micro-match supply and demand using rapid replenishment, they can face the following risks:
High cost of transportation: this choice require frequent delivery and a large number of trucks visiting a store per day, since each truck only carries certain types of product (depends on temperature of storage condition required)
Human resources: store staff will have to arrange and re-arrange shelves frequently (according to meal time of a day, for instance). This may distract them from providing other services to store customer.
When demand fluctuates, products become redundant while shelf space is occupied
3. In order to develop capabilities that support its supply chain strategy, Seven-Eleven Japan has made the following decisions in terms of facility location, inventory management, transportation and information infrastructure:
Facility location: high density of stores in area where demand is already known (dominant area). Stores are located around a Distribution Center (DC).
Inventory management: each store carries an
a) Have large inventory in terms of quantity, variety and quick replenishment in order to be able to respond quickly to customer demand
Risk associated: high cost: warehouse, transportation high Implied Demand Uncertainty: little time to react, risk of inventory that cannot be sold
b) Provide highly innovative products in order to provide customer with the best product and/or newest technology
Risk associated: high cost: investment into new product high Implied Demand Uncertainty: because the product is new, demand is uncertain
c) Provide high level of service quality
Risk associated: high cost: staff, training high Implied Demand Uncertainty: customer expectation becomes high over time
2. For Seven-Eleven Japan, when trying to micro-match supply and demand using rapid replenishment, they can face the following risks:
High cost of transportation: this choice require frequent delivery and a large number of trucks visiting a store per day, since each truck only carries certain types of product (depends on temperature of storage condition required)
Human resources: store staff will have to arrange and re-arrange shelves frequently (according to meal time of a day, for instance). This may distract them from providing other services to store customer.
When demand fluctuates, products become redundant while shelf space is occupied
3. In order to develop capabilities that support its supply chain strategy, Seven-Eleven Japan has made the following decisions in terms of facility location, inventory management, transportation and information infrastructure:
Facility location: high density of stores in area where demand is already known (dominant area). Stores are located around a Distribution Center (DC).
Inventory management: each store carries an