Seven Eleven Japan.
Q.NO. 3: 7-ELEVEN JAPAN USES A DECENTRALIZED DISTRIBUTION SYSTEM. IF SEJ WAS TO USE CENTRALIZED DISTRIBUTION SYSTEM HOW WOULD IT AFFECT ITS CURRENT SUPPLY CHAIN STRATEGY? EXPLAIN IN DETAIL.
Seven Eleven Japan uses a decentralized distribution system. As we know that SEJ has separated its product into four categories on the basis of temperature required to store them namely: 1.) Chilled temperature item, 2.) Warm temperature item, 3.) Frozen item and, 4.) Room temperature item. The stores place there order which is transferred to suppliers as well as distribution centers immediately. Suppliers then produce goods and deliver it to the different distribution centers by trucks. Each order is separated on the basis of stores therefore it becomes easy for the distribution centers to assign it to specific trucks. At the distribution center products from different suppliers that fall into same category were directed to a single temperature controlled truck. Thus each SEJ distribution center catered only to a single category of product. So there were four kind of distribution center and four kind of delivery truck. Each of these trucks supply to different stores on the basis of the order information received by the distribution center. This kind of distribution system was very effective in reducing transport cost and increasing the responsiveness of the entire distribution network which was very much desirable as each store on an average had its order delivered 2.5 times a day.
Now what if SEJ was to use centralized distribution system? Instead of having different distribution center for different categories of product what if SEJ employs a single distribution center catering a particular sector? As we know that SEJ has a very aggressive expansion strategy. They bombard a particular prefecture with too many stores in order to capture the entire market share. Having such an extensive strategy requires them to be very responsive in their logistics. That’s the reason they
Seven Eleven Japan uses a decentralized distribution system. As we know that SEJ has separated its product into four categories on the basis of temperature required to store them namely: 1.) Chilled temperature item, 2.) Warm temperature item, 3.) Frozen item and, 4.) Room temperature item. The stores place there order which is transferred to suppliers as well as distribution centers immediately. Suppliers then produce goods and deliver it to the different distribution centers by trucks. Each order is separated on the basis of stores therefore it becomes easy for the distribution centers to assign it to specific trucks. At the distribution center products from different suppliers that fall into same category were directed to a single temperature controlled truck. Thus each SEJ distribution center catered only to a single category of product. So there were four kind of distribution center and four kind of delivery truck. Each of these trucks supply to different stores on the basis of the order information received by the distribution center. This kind of distribution system was very effective in reducing transport cost and increasing the responsiveness of the entire distribution network which was very much desirable as each store on an average had its order delivered 2.5 times a day.
Now what if SEJ was to use centralized distribution system? Instead of having different distribution center for different categories of product what if SEJ employs a single distribution center catering a particular sector? As we know that SEJ has a very aggressive expansion strategy. They bombard a particular prefecture with too many stores in order to capture the entire market share. Having such an extensive strategy requires them to be very responsive in their logistics. That’s the reason they