Fundamental Of Supply Chain

Case Study 2

SUBMITTED BY:
ANSA HADIA (70071231)

SUBMITTED TO:

SIR. ARSLAN
SECTION:

(A)



Q1: A convenience store chain attempts to be responsive and provide
customers what they need, when they need it, where they need it. what are
some different ways that a convenience store supply chain can be
responsive? what are some risks in each case?
Ans: A convenience store can increase its responsiveness by developing market
dominance strategy which can increase distribution efficiency, can improve brand
awareness etc. It can help in opening majority of new stores. The risk with this
strategy is it can be costly for both infrastructure and management.
Just like Seven Eleven, expand services such as by including in-store payment of
bills, by accepting installment payments, photocopying, pick up location for parcel
deliveries companies etc. This risk with expanding services can increase labor cost.
Another way for a convenience store to be responsive is to develop e-commerce
company as is less time consuming and is easily accessible to customers. Risk is
that e commerce is highly competitive and lack of security.

Q2: Seven-Eleven's supply chain strategy in japan can be described as

attempting to micro-match supply and demand using rapid replenishment.
what are some risks associated with this choice?

Ans: Rapid Replenishment means restoration of stocks before they are supplied.
This technique has made Seven Eleven highly responsive although there are few
disadvantages such as it requires quick response and collaboration at all supply
chain stages, If there is a bottleneck or irregularities at any one supply chain stage, it
could delay the whole process. Rapid Replenishment can also increase
transportation cost. Since Rapid Replenishment require quick response from
management, it will increase management cost and labor cost.

Q3: What has Seven-Eleven done in its choice of facility location, inventory
management, transportation, and information infrastructure to develop
capabilities that support its supply chain strategy in Japan?

Ans: Seven Eleven has locate its facilities closer to its customers and also take
other stores location for centralized facility. This has helped Seven Eleven develop
as high density target market. Seven Eleven distribution centres and information
systems helps in tracking the sales items and offers short replenishment cycle times
allowing forecasting of sales to be accurate. The distribution system has allowed
Seven eleven to reduce vehicles required for daily delivery service as Seven Eleven
had four categories of trucks and like products from different suppliers were directed
to single temperature controlled truck which reduces delivery cost. The information
system of Seven Eleven helps it to match its supply with the demand accurately. The
two way, high speed online communication capability to collect, process and store
sales data quickly.

Q4: Seven-Eleven does not allow direct store delivery in japan, with all
products flowing through its distribution centers. what benefit does seven-
eleven derive from this policy? when is direct store delivery more appropriate?
Ans: The distribution centers of Seven Eleven have several benefits such as it has
reduced delivery costs and allowed rapid delivery of fresh foods. It has ensured rapid
and reliable delivery. It has reduced delivery time spent on each store as the system
does not require the delivery person to be present during scanned in of delivery. The
replenishment cycles has shorten for fresh and fast food items. The distribution
centers did not carried any inventory as they transferred inventory from supplier
trucks to Seven Eleven trucks. The direct store delivery is more appropriate when
large quantities of products are delivered from suppliers to stores. When varieties of
products are less and requires special handling of products.
Q5: What do you think about the 7dream concept for Seven-Eleven Japan?
from a supply chain perspective, is it likely to be more successful in Japan or
the United States? why?
Ans: The 7dream concept seemed to be more practical in Japan as 92% customers
preferred to pick up their parcels at local convenience stores as the frequency of
customers visiting convenience store was high. It has improved customers
experience in Japan. It will not be that successful in US as store network is not as
dense as in Japan and customers in US would prefer parcel to be delivered at their
home rather them having to pick it up from stores.
Q6: Seven-eleven is attempting to duplicate their successful Japanese supply
chain structure in the united states with the introduction of CDC’s. what are
the pros and cons of this approach? keep in mind that stores are also
replenished by wholesalers and DSD by manufacturers.
Ans: The Pros of CDC’s are:
It will increase responsiveness, feasibility is strong, helps in reducing losses caused
by shortage of products, Sales and inventory data can be timely collected and can
help in forecasting demand accurately.
The Cons of CDC’s are:
Requires infrastructure and the need to develop information system, developing
suitable replenishment method, increases cost of transportation, infrastructure etc.
Q7: The United States has food service distributors like Mclane that also
replenish convenience stores. what are the pros and cons to having a
distributor replenish convenience stores versus a company like Seven-Eleven
managing its own distribution function?

Ans: The pros of having distributors are:

It will reduce the supply chain cost, it may improve service quality, it can improve management
efficiency. The distributors can understand customers demand more better. Outsourcing can
improve quality.

The cons includes:
Additional cost on outsourcing, lack of control between company and customers, subsidies required
to compete with competitors with smaller supply chain.