Advantage

1. One can contend that a distributor brings much more value to the table in
the United States relative to Japan. Given the lower density of stores, a
distributor is able to aggregate deliveries across many competing stores.
This allows a distributor to reach levels of aggregation that cannot be
achieved by a single chain such as Seven-Eleven

2. The advantage of someone else replenishing stores is primarily cost; less

transportation, material handling, and labor costs for your own system.
Depending on how supply and reordering operations are designed, it might
be possible for the distributors to perform the aggregation/demand
smoothing function with minimal intervention by the individual Seven-
Eleven franchise.
3. The largest benefit of having a distributor replenish the store is that they
dont have to invest in DCs or trucks to perform this task.

4. Having a distributor replenish convenience stores means that they do not have to
invest anything in distribution centers, fleet, personnel.
5. Proximity of distributors to distribution convenience stores added value as they very
well understand customer demands.
6. Outsourcing encourages specialization hence quality.
7. The company will be able to focus on her core business.

8.
Disadvantage
1. The big disadvantage to having all deliveries done through a distributor is
that Seven-Eleven is unable to exploit having a large number of stores. In
fact, it may be argued that going through the distributor has Seven-Eleven
subsidize deliveries to competing smaller chains that may also be using
the same distributor.

2. The disadvantage of the outsourced replenishment service is an overall

loss of control, an increased number of deliveries to each store, and the
difficulty of integrating information flows across disparate systems.

3. The downside is the lack of control and the increased number of

relationships that must be managed at the store level. Responsiveness
may also not be as great. Some store managers will be more adept at
managing these relationships than others, and service levels will not be
consistent among the stores. This also creates more potential problems
for upper management in overseeing the franchises to ensure consistent
customer service.

4. An additional cost for the company for outsourcing the service.

5. Lack of control and responsiveness, because there is no direct link between the
company and the convenience stores and customers.
6. The level of service consistency cannot be fully monitored by the company.

7.