Case: 7-Eleven Japan Co. Essay

disbelief 1A gadget chime in range attempts to be responsive and provide customers what they need, when they need it, where they need it. What be some different ways that a convenience memory tot string tramp be responsive? What argon some risks in distri simplyively case?A convenience store potty be to a greater extent responsive by doing exactly what Seven-Eleven lacquer is doing many offices, speedy switch, appropriate technology deployment, and an equ bothy responsive supplier (vertical integration for many of their SKUs). The risks associated with this organization argon the costs coupled with demand uncertainty. If demand patterns transpose dramatic altogethery, or the customer base changes, then Seven-Eleven is left with an operation that is non needed. Offering variety of services in the case of this case believe Seven Eleven offered attractive services to customers such as ski lift voucher pass, payment of mail order purchases, internet shopping, a meal servic e deliverance, automatic teller machines installation in from each one store, plectrum up online services, electronic money service that allow customers to pay and use a card or cell phone to find payments etc. on the other hand, a short coming skill result due to the failure of one or much than selective information system due to failure or break down.Question 2Seven-Elevens generate chain outline in Japan tail assembly be described as attempting to micro-match supply and demand using fast replenishment. What are some risks associated with this choice?Question 3What has 7-Eleven done in its choice of facility location, roll management, conductation, and information al-Qaida to develop capabilities that software documentation its supply chain strategy in Japan?Information infrastructure7-Eleven implemented a Total Information System through which the companionship could efficiently share its information thus making its supply chain responsive. The system was insta lled within each store, headquarters, suppliers and vendors. And also the system linked all the stores with each other. The Total Information System comprises of POS registers, Integrated Services digital Network (ISDN), Graphic order terminal, electronic s dropner terminal and store computing devices. The info related to the sales as well as the purchaser is undisturbed through the POS register for analysis. For efficient management of the inventory, the graphic order terminal, s arsener terminal and store computers are used thus assists in improve both the capacity and responsiveness.Inventory managementThe store owner or the manager makes use of the graphic order terminal to place orders so as to replenish inventory in order of their arrangement on the store shelf. The owner had access to analysis of waste, 10 day and 10 week sales trends SKU, sales trends of refreshed products, sales analysis by day and term etc that help him in forecasting demand. On the other hand, the Scanner terminal receives products from a dissemination center and in that respectfore monitors inventory by checking whether the order received matches with the original order placed. The store computer helps in tracking store inventory.TransportationTrucks are used to transport goods to the stores. 7-Eleven makes use of a flexible dissemination system which means that it can alter the lecture schedules according to the varying customer demand. Also, the suppliers send orders via trucks to the dispersal centers. The latter cross docks inventory from supplier truck to dispersal trucks. More everyplace, to represent the attribute of the products, the distribution trucks are temperature envisionled of four categories for different types of products such as frozen/ chilled diets, processed regimens etc.Facility locationThe facility location of 7-Eleven comprises of two types namely, the distribution centers and retail stores. 7-Eleven follows a trade or line of business d ominance strategy through which it forms clusters of stores in the area where already a 7- eleven store exists rather than having a handful of stores dispersed over a wide geographical area. Among the clusters theres a distribution center which is surrounded by 7-Eleven stores. Approximately, there are 50-60 stores in each cluster.Question 47-Eleven does not allow direct store words in Japan but has all products flow through its distribution center. What benefit does 7-Eleven derive from this policy? When is direct store delivery more appropriate?7-Eleven has the policy of delivering its products to the retail stores via the distribution centers. Through these distribution centers, the replenishment cycles are cut and a proper sales record can be chief(prenominal)tained and monitored. Through the Point of Sale registers, signals can be transmitted to both the distribution nub and the supplier so orders can be organized accordingly. Also, orders are sent forthwith to the distri bution centre so that they can be allotted to the appropriate vehicle. A unite delivery system is used by 7- Eleven, in which four groups of temperature-controlled trucks are used to send fresh products. The trucks are sent several quantify a day during peak hours in order to avoid delays.Also, authorization is maintained between the supply chain partners and an additional person is not needed firearm the load is being received and checked. The process reduces delivery magazine. merely this system index require a number of mundane deliveries, but the number of trucks needed is much lesser therefore it reduces the delivery cost and facilitates a more prompt fresh nutriment delivery. And w therefore the crinkle is continuously replenished. This network process ensures flexibility in the comprehend that it can alter the delivery schedules due to any demand fluctuations. there is a twelve-hour limit upon the proportionalityocking of food items.The disadvantages hitherto inc lude that the retail stores allow oblige little control when the restocking takes place. Also, a number of stores rely on just one combined distribution centre. Also, if the system goes down while the delivery is at CDC, then all the stores can be moved(p) and timely deliveries aptitude not be possible. Hence accurate forecasts are needed. Direct delivery system might be a reusable technique as the stores follow variant patterns. If the demand increases and a store require a greater number of deliveries then the demand can be met more efficiently as the deliveries can be make directly to the stores.Question 5What do you think about the 7dream creation for 7-Eleven Japan? From a supply chain perspective, is it probable to be more successful in Japan or the United States? Why?In February 2000, 7-Eleven established 7dream.com, an ecommerce bon ton, the goal of which was to exploit the existing distribution system and the accompaniment that stores were easily accessible to most Japanese Stores served as drop-off and line of battle points for the customers and proved successful as 92% of their customers preferred to just pick up their goods from the local convenience store which they ordered online rather than strike them delivered to their homes. This was understandable given the frequency with which Japanese customers visit their local convenience store. 7dream hoped to build on this preference along with the synergies from the existing distribution system as the participation required an effective and efficient supply chain to cater to the demand of the customers who ordered online and provide the company with a time frame for delivery.From a supply chain perspective, it is believed that the 7dream notion is likely to be more successful in Japan than in the United States. The power for saying so is that, the Japanese market is much smaller as compared to that of United State. In 2008, there were 12,071 stores in Japan where as the stores were arou nd half the number in U.S that is 6,262. The density of stores in Japan was hence greater as the area of Japan is much smaller as compared to that of the U.S. and therefore, in Japan the company had a greater customer dig as 7Eleven stores are easily accessible passim Japan.The ecommerce company itself could probably be a greater success in U.S. however it would be a better conceit if the orders are directly sent home rather than have them delivered to the nearest 7-Eleven store. In this way, the company can tap in to a bigger market that is the U.S. market but get the goods delivered to the customers doorstep would be a better idea. Also, the stores in the U.S. were replenished using direct store delivery (DSD) by some manufacturers, with the remaining products delivered by livelongsalers. DSD accounted for about half the total volume, with the rest coming from the wholesalers. This meant that direct delivery is a more popular concept in the U.S.Keeping into consideration the c urrent strategy of the 7dream concept, it is more likely to be successful in Japan than in the United States. even so, if the strategy is molded according to the U.S. market, it can become a greater success.Question 67-Eleven is attempting to duplicate the supply chain structure that has succeeded in Japan in the United States with the introduction of CDCs. What are the pros and cons of this approach? Keep in mind that stores are also replenished by wholesalers and DSD by manufacturers.After 7 Eleven acquired Southland Corporation they tried to improve their operations in America. The main improvement was an introduction of a new component in the supply chain completely novel to the US market. This component, the Combined Distribution Centers (CDCs), was however used in Japan at that time. Initially the stores in US used the Direct Store Delivery (DSD) in which stores were replenished by manufacturers accounting for half of the goods volume and the rest half was done by whole sell ers. CDC delivered putrefiable products like bread, sandwiches and the rest of the bakery products. ProsUsing CDC all perishable -food items would be delivered by a single allocator which would increase boilers suit efficiency. Having fresh-food items at 7-Eleven convenience stores helped in users getting variety of fresh food from convenient locations. Uncertainty of delivery times was minimized by overbearing delivery system. The inventory costs were low as fresh food items cannot be inventoried. With daily replenishment of fresh-food items, the stock would be fresh and it reduced consumer concerns of stale items to a large extent. Centralization gave a greater control to the management and more processes were now under the supervision of the company hence improving efficiency.ConsThere could have been a difference in quality delivered through CDC and DSD. DSD was a tested system so company might be unwilling to shift to the new system as there is always a reluctance to change. In US stores fresh products may not sell very well.Training would be required for all the supply chain members as the new system tends to be more time sensitive. Manufacturers might not be willing to go with the idea of CDCs as they might lose on their relative dollar revenues and with the loss in revenues they might also reduce control. As the new system would be very time specific, the supply chain might not be very responsive and if updates are required the company might lose on its sales.Question 7The United States has food service distributers 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?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. With outsourcing the orga nization tries to focus on activities that they can do best. The advantage is that managing the distribution is the sole headache of the distributor and with his specialized expertise it might be more cost effective. However outsourcing does have its repercussions as well. The control over the quality of items and the replenishment time might not be as effective as doing the distribution yourself.With the outsourcing of distribution the communication gap can affect the replenishment distribution. However taking the advancements in communication and technology this statement may be rendered void. Convenience stores are successfully communicating with their distributors and make uninterrupted retentivity of data and information transmission from 3PL WMS to internal systems for real-time visibility of stock in hand and customer service. Moreover outsourcing decisions affect both the efficiency and responsiveness of the supply chain. A retail store can extend to improved efficiency by having a distributor replenish its stock, but he does not put his heart and effect they can have on their long term aims.