Dr. Filemon C.

Aguilar Memorial College Golden Gate Subdivision, Talon

III, Las Piñas, 1747 Metro Manila

7/11 Corporation

In Partial fulfillment of the subject

DISTRIBUTION MANAGEMENT
Submitted by:

De Guzman, Paula Marie O.

Dimaranan, Marjorie Mae C.
Leyesta, Jenelyn
Palmaran, Dave Hendricks G.
Pautan, Nelson
Rey, Melissa D.

III-8 Marketing

Submitted to: Cherry Lou I. Duque, MBA

April 2021
 I. BACKGROUND OF THE STUDY

Philippine Seven Corporation (“PSC”) was registered with the Securities and
Exchange Commission (“SEC”) on November 23, 1982. It acquired from Southland
Corporation (now Seven Eleven, Inc. or “SEI”) of Dallas, Texas the license to operate 7-
Eleven stores in the Philippines in December 13, 1982. Operations commenced with the
opening of its first store in February 29, 1984 at the corner of Kamias Road and EDSA
Quezon City, Metro Manila. Considering the country’s economic condition at that time,
the Company grew slowly in its first few years of existence.

In July 28, 1988, PSC transferred the Philippine area license to operate 7-Eleven
stores to its affiliate, Phil-Seven Properties Corporation (“PSPC”), together with some of
its store properties. In exchange thereof, PSC received 47% of PSPC stock as payment.
Concurrent with the transfer, PSC entered into a sublicensing agreement with PSPC to
operate 7-Eleven stores in Metro Manila and suburbs. As part of PSPC’s main business,
it acquired or leased commercial properties and constructed retail store buildings, leasing
the buildings to PSC on long term basis together with most of the capital equipment used
for store operations. In effect, PSC concentrated on managing its stores and effectively
took the role of a pure retailer.

PSC’s area license to operate 7-Eleven Stores in the Philippines was renewed on
August 31, 2007 for another term of 20 years, renewable every 10 years. As of December
31, 2018, the Company has a total of 3,166 direct hires and augments its temporary needs
during peak hours or season in the stores and the support services units with cooperative
members. There is no existing labour union in the company and collective bargaining
agreement. There is a PSC Employees’ Council which communicates to management
the employee’s concerns. There has been no strike or threat to strike from the employees
for the past three years.
 The Company provides supplemental benefits or incentives to its employees such
as: retirement benefit plan, health care group life and accident insurance plan, various
employee programs and recognition of top performing employees and service awards,
among others. Recognizing the need of employees for growth, training and development
programs are regularly provided by PSC across all levels. For Senior Management and
Officers, the company conducts a Leadership Academy & Mentor’s Leadership Training
Program with the objective in line with the Company’s succession planning program. In-
house trainings on leadership skills, products, basic negotiation, change management,
retailer initiative and basic operating and quality assurance procedures are also provided
by the Company to employees. These are offered periodically based on annual training
calendar every month or quarterly. In-house trainings are designed to augment and
develop the employee’s skills and competencies.

The top risks in retail industry to which PSC belongs include increase in
competition, brand reputation and business operations/supply chain continuity.
Meanwhile, the main risks arising from the Company’s financial instruments are credit
risk, liquidity risk, and interest rate risk. The Audit & Risk Committee ensures the integrity
of internal control activities, develops, oversees, checks, and preapproved financial
management functions and systems in the areas of credit, market, liquidity, operational,
legal, and other risks, and crisis management. The Internal Audit Division and the
External Auditor directly report to the Audit Committee regarding the direction, scope and
coordination of audit and any related activities. PSC continually observes the activities of
competitors in the relevant market, which operate in various retail formats, all selling
typical products and services for c-stores (branded foreign/ local or generic), mini-marts,
gas marts, drugstore-marts, groceries, supermarkets (including their express or junior or
smaller formats), and other hybrid stores. As part thereof, the Corporation estimates it
market share within the sector at 26% as to store count. In terms of fast-moving consumer
goods offered by the retailers, PSC accounts for 2% of the value sales of the
market.
 II. STATEMENT OF THE PROBLEM
1. 7/11 Philippines’ other products are not consistently available to all
branches.
2. 7/11 Philippines’ warehouse deliveries are slow.
3. 7/11 Branches have Poor Inventory Control.

III. OBJECTIVES

The project study aimed to provide efficient and effective data to improve the inventory
management system of 7eleven. Specifically, the project sought to:

1. Have an accurate list of purchased products and precise records for the number
of reduced products a day;

2. Inform the staff if the product or a certain item is not enough for the coming days;

3. Inform the workers about the product that is soon to expire using an alert from the
system;

4. Make the management system more efficient, data consistency, and provide a
comfortable and easily services for staff;

5. Make arrangement for sale of slow moving items

IV. TARGET MARKET

7eleven's biggest target market is busy shopped at an everyday store. It has tailored
its products and services like speedy transaction to meet the needs of these shoppers.
The company's other target markets are coffee the beverage lovers. That’s why it has put
much emphasis into making some of the finest fresh-brewed coffee, sloppy and big gulp
beverages which it is well-known for around the world. The company also offers smart
snacks and to go meals to better target busy people in fast paced cities or countries.

Its customers are both male and female, age 16 to 54 years old. In addition the
company targets low income workers and students as their secondary market, which is
why 7-eleven opens 24 hours, provides promos and fun at low prices. Thus the company
serves a more diverse market than most convenience stores.

A. GEOGRAPHICAL MAP
NATIONAL CAPITAL REGION (NCR)

•Makati City •Makati City

•Pasay City •Muntinlupa
•Pasig City •Pasig City

D1 •Mandaluyong D4 •Parañaque
City

•Muntinlupa •Muntinlupa
City City
•Parañaque •Pasay City
City •Taguig
D2 •Manila D5 •Las Piñas City
•Makati City

•Caloocan City •Pasay City

•Mandaluyong •Cavite
City •Parañaque

D3
•Las Piñas City D6 •Manila
•Manila
 LUZON

•Manila
•Laguna
D1: Cavite •Batangas

•Batangas
•Bulacan
•Cavite
D2: Laguna •Tagaytay

•Laguna
•Cavite
D3: Batangas •Quezon Province

•Pampanga
•Nueva Ecija
D4: Bulacan •Bataan

•Zambales
•Pangasinan
•Pampanga
D5: Baguio •Bataan

•Aurora
•Nueva Vizcaya
D6: •Pangasinan
Pampanga

•Tarlac
•Pangasinan
•Nueva Ecija
D7: La Union •Quirino
VISAYAS

• Romblon
D1: • Palawan
CDI • Surigao
CEBU • Sorsogon
MINDANAO

• Bohol
D1: • Siquijor
CDI • Camiguin
DAVAO • Bohol
 B. PROMOTIONAL ACTIVITIES

7-eleven stores follow an Omni-channel approach for its promotional strategy from
digital promotion to events to physical store sites promotion. The 7-Eleven company is
engaged in enhancing its sales through ‘shoulder’ campaign for its Slurpee product that
cited the benefits of the product beyond just refreshment. The company has also started
celebrating 7-Eleven day as a promotion strategy to get more customers to its stores. On
this day the 7-Eleven stores offer free Slurpee from any of its stores. Also, the company
started offering small Slurpee on fuel purchase to get new customers.

7-Eleven Promos

MECHANICS:
In case you missed it, Philippines'
premier 24-hour is having another
7-day sale! Get your wallets and
your phones ready for these
amazing Q Codes that will let you
save up to 50% OFF on
participating items. 7-Eleven 7-
Day Sale features your favorite
snacks from Gardenia, Gatorade,
Kelloggs and many others, plus
essentials from Hygienix that you
can take home at half the price.
DURATION:
As long as the code aren’t
expired.
Usually the Code for Cliqq promos
lasts only for 2 weeks and the
company changes the rewards
and promo codes after 2 weeks.
MECHANICS:
When you order Big Bite for only P30.
You may choose from Creamy
Cheese, Jumbo Classic, Cheese
Hungarian, and Chicken Cheese Dog

DURATION:
Available in selected Metro Manila
stores only until March 23, get FREE
16oz Nestea House Blend Iced Tea

MECHANICS:
Buy a 2-pc Crunch Time Fried
Chicken meal and get 1 FREE 200g
pack of Nestle Orange Juice. Or get
2 FREE packs if you buy a Crunch
Carrier!
This offer is exclusively available on
Foodpanda app only

DURATIONS:
The company doesn’t put duration
for this promo.

MECHANICS:
Buy participating products to earn
eStamps or eRaffle entry when you have
your CLiQQ App/Card barcode scanned
before payment. Each participating
booster product has a purchase
requirement and an equivalent
eStamp/eRaffle entry to be earned.
Earned eStamps can be used to convert
to CLiQQ Wallet Credits

DURATION:
The promotion starts on March 24
12:01 AM and ends on May 18,
2021, 11:59 PM (Philippine Time)
 V. PRODUCTS AND SERVICES

PRODUCTS

Need something in a jiffy? 7-Eleven has the essentials you need. And because you’ll
find us everywhere, you’ll find everything you need.

BIG BITES

Only Big Bite Hotdogs SOLVE my hunger at any time of

the day, anywhere in great tasting fashion with a BIG
variety of flavors I can choose for myself. Gram-for-gram
and peso-per-gram the best and most “sulit” hotdog
sandwich in the Philippines Solves my hunger and allows
me to easily & quickly get ready and move on with my next
task.
SIZE PRICE

Jumbo Classic ₱ 30.00

(ALL FLAVORS)

CITY BLENDS

Each cup of City Blends coffee is made of 100%

Arabica beans, freshly ground and brewed at the push of
a button. This ensures that you enjoy freshly made coffee
every time you crave for your caffeine fix. Gone are the days
of sour coffee brewing for hours in coffee machines!

SIZE PRICE

Small (8 oz) ₱ 20.00

Medium (12 oz) ₱ 32.00

Large (16 oz) ₱ 42.00

CRUNCH TIME

Crunch Time fried chicken is freshly-cooked and

delivered to 7-Eleven stores in multiple batches
daily, ensuring that our customers enjoy the
crunchiness without the hassle of long lines

SIZE PRICE

1pc Crunch Chicken with Rice ₱ 71.00

2pcs Crunch Chicken with Rice ₱ 129.00

Crunch Carrier with 6pcs Fried ₱ 330.00

Chicken

SLURPEE

The barkada that chills together, stays forever! Get the

entire barkada at mag #Samasama Slurpee for some
refreshingly brain freezing fun! Everyone mood and makes
everything fun.

SIZE PRICE

12 oz ₱26.00

22 oz ₱ 31.00

32 oz ₱36.00
 Busog Meals

Bopis or Tuna Omelette for only 29 pesos!

Boom…busog!The only place where you
can get a Sisig, Giniling,

SIZE PRICE

Regular ₱ 29.00

Jumbo ₱ 52.00

SERVICES

Transact e-services or pay your bills with ease at a 7-Eleven near you!
VI. Distribution Channel

DISTRIBUTION PROCESS

1st Step: Manufacturer

- In this process, 7/11 is a number one convenience retailer in the Philippines so the
manufacturer has a primarily responsible for implementing and operating the production
system in order to produce the product and to distribute it to the customers.
2nd Step: Distributor
- This process, 7/11 has a big impact in our market today in terms of to distribute the
products to the retailers. Distributor have a direct responsibility to making sure products
are flying off retail shelves.
3rd Step: Retailer (Stores)
- In this process, 7/11 this is the step where the distributor is finally arrived in every stores
they make sure that all the goods is not damage after the transportation. Since 7/11 is a
well-known convenience store in the Philippines.
4th Step: Consumers
- The final step in this process is Consumers there is a statement that "Our consumers
are increasingly connected, 24/7" it means that they want to be connected all the time.
By purchasing a product’s 7/11 they make sure is to satisfy the needs and wants of the
consumers.

VII. Channel Design

A. Warehousing and Distribution Center

The 7/11 has warehouse operations that covers a number of important areas, from the
receiving, organization, fulfillment, and distribution processes. These areas include:
Receiving of goods. Cross-docking of goods. Organizing and storing inventory
Warehouse activities include putting items away, moving items inside or between
warehouses, and picking items for assembly, production, or shipment Assembling items
for sale or inventory may also be considered warehouse activities

Distribution center

A general manager who manages the facility and typically has a number of department
managers who report directly to him/her. Most distribution centers divide staff into two
categories direct labor and indirect labor.

Indirect

Supervisors setting goals for performance and deadlines in ways that comply with
company's plans and vision. Organizing workflow and ensuring that employees
understand their duties or delegated tasks. Monitoring employee productivity and
providing constructive feedback and coaching.
Direct

Warehouse workers are responsible for performing an array of duties such as receiving
and processing incoming stock and materials, picking and filling orders from stock,
packing and shipping orders, or managing, organizing and retrieving stock and other.
 B. Inventory Control

Steps/ Diagram

Types of Channels
Process

Stores to DC DC to Suppliers
 C. Logistic Management

Seven-Eleven Stores Deliver "Freshness", "Taste" and "Safety" Taking into

Account the Environmental Impact, too. Seven-Eleven sets up combined distribution
centers by product category and temperature zone in each area. Each product is kept at
an optimum controlled temperature at every stage from production to delivery to the store.
This unique distribution system maintains "freshness", "good taste" and "reliability" of their
products. This combined distribution system by temperature zone delivers freshly-made
food products such as bento (boxed meals), entree and sandwiches to stores faster.
Seven-Eleven has been working hard to realize combined distribution from the time of its
foundation when it was expected that the manufacturer delivered the product. Adoption
of combined delivery has succeeded in substantially reducing the number of delivery
trucks used from 70 trucks per day, per store to approximately 9. They deliberately plan
the delivery routes so that more items can be transported with a smaller number of trucks.
In this way, this system is not only contributing to curbing CO2 emissions, but also helping
reducing noise.
 The "Cold chain" system maintains the freshness of vegetables used for
sandwiches and salads. Harvested vegetables are stored at low temperature on site and
transported by delivery trucks under strict temperature-controlled conditions. They are
then delivered to stores via the similarly temperature-controlled sorting center and
commissary. Consistent temperature control from the farm to the store maintains
vegetables' freshness and quality.
 D. Packaging

Packaging is key to creating consumer awareness, especially because there is no

advertising of the 7-Select brand and the consistent look, packaging, and logo are
important to creating the brand, showing consistency, and building consumer confidence
in their products. Packaging protects the quality and safety of products, provides
information about ingredients, and adds convenience. 7-Eleven is working to reduce the
environmental impact of proprietary packaging by using eco-friendly materials and
reducing packaging materials.

Reimagining the Fountain Cup

Introduced new, lighter-weight fountain cup that

uses less plastic and is 100% recyclable.

Transitioned from plastic straws to a new plant-

based plastic, eco-friendly fountain straw, ending

petroleum-based plastic straw use for cold-

dispensed beverages

Packaging from Sustainable Resources

Replaced large plastic chicken and sulit meals

box with a paper corrugate alternative,

eliminating 437,000 lbs. of plastic annually. The

new paper alternative contains 40% post-

consumer recycled content and is certified by the

Sustainable Forestry Initiative.

Innovating with Paper cup

From a plastic cup for their gulp and coffee blend

beverage, the 7/11 innovated to a paper cup.

 E. Transportation

To preserve the freshness of different products, merchandises are sorted

professionally into five different categories according to their attributes. The five
categories include products preserved under room temperature, refrigerated products,
frozen products, fresh food, and books/publications.
Wherever there is a need, there is a 7-ELEVEN. There product logistics system
penetrates deep into mountain areas, rural villages, and even secluded offshore islands
through the combination of air, sea, and land freight transportation, providing residents at
remote destinations the same services enjoyed by those in urban areas. With a
comprehensive distribution system as a major strength.
VII. Alternative Course of Action (ACA’s)

SOP1: Inconsistent Product SOP2: Slow Warehouse SOP3: Poor Inventory

Availability within Stores Deliveries Control in the
Store

ACA 1: Make Products Available ACA 1: Centralized System ACA 1: Localized Inventory

Advantages: Advantages: Advantages:

- A store that has the all items - Easy to manage - Enhance Your Customer
available would attract everything from one Service
more customers. location. - Leads to higher sales
- More sales = more profit - Simplify Multichannel because of available items
Selling - Reduced physical audits
- Easy monitoring of sales
Disadvantage: of company itself.
- Disadvantage:
Easier way to compare
- Making products available
sales with suppliers.
entails costs, from the - If the system crashes it will
design, manufacture, be a big problem.
storage, and delivery of an Disadvantage: - Additional cost.
item.
- Can lead to problems
associated with lack of
knowledge or
understanding of local
conditions at each
location.

ACA 2: Use Inter-Branch ACA 2: Measure Service ACA 2: Have a specialized

Transfer Levels training for employees

Advantages: Advantages: Advantages:

- Can serve more customers
- Good brand image for 711
since there is a possibility
that there will be less
problem with product
availability.
- To check if the stocks is - Better knowledge for
equal to the demand. employees.
- Having good service level
can lead to customer
satisfaction. Disadvantage:
- Additional cost.
Disadvantage:
Disadvantage: - If stock is unavailable,
then the scheduled
- Additional step in records of delivery will still be
inventory. delayed.
- Additional dispatching step. - Additional steps and cost.
ACA 3: More Frequent Delivery ACA 3: Multi-Location
Warehousing
Advantages:
Advantages:
- More stocks.
- Less chance of unavailable - All areas around the
stock. country can be catered.
- Items can be shipped out
from the location closest
Disadvantage: to the store that has
needed items.
- There is a possibility of
- This means that
excess inventory.
shipments spend shorter
time in transit
Disadvantage:
- Having multiple locations
means having redundant
stock at each location.
- Additional cost for more
workers and the building
itself.
ACA 3: Stockless
Purchasing/Inventory
Advantages:
- Less chance of unavailable
stock.
- Less inventory holding
costs.
- Production mistakes can
be spotted more quickly
and correctly.
-
Disadvantage:
- If delivered goods did not
come exactly on time, then
it can affect the flow of
sales.
- Additional cots for
information technology.
- Suppliers may not be able
to deliver massive
unexpected orders.
ACTION PLAN

VIII. Finding & Recommendation

Findings

7 Eleven experienced problems when it comes to the unavailability of their

products, slow deliveries and poor inventory control in store. Some challenges they

encountered are decreasing loyal customers and increasing competition. These

challenges lead their customers shift to competitor's store. According to an article which

featured the president of 711 Philippines, they are already working towards real time

inventory and suggested order algorithms to decrease out of stocks further.

Recommendation

The researchers recommend that 7 Eleven should make sure that their products

are always available by using inter-branch transfer and more frequent delivery of products,

they can have more stocks to serve more customers. Use centralized system so that the

management has the ability to have eyes on a product within moments if there is a

concern since everything is often located in the same building. 7 Eleven should also focus

and improve their inventory to ensure that their products will never get out of stock.

Developing and improving their distribution management provides direction and purpose

for all other distribution management activities.

1. They already have a system wherein they use a phone in managing their

inventories, but with the use of real time inventory, the process will be

hassle free since every time a cashier scans a product which was bought,

it will already be deducted from the actual inventory, then that data will be

directed to the centralized system. It is recommended to modify this system

since it is already out of date and there are already lots of things that can

be fixed.

2. The management should release or provide a policy that the company is

allowing the inter-branch system.

3. The 7/11 since its pandemic right now, they should cope up in a way that

opening a new way of selling they should create their own application so

that the customer could order using that app, and also provide a store to

house delivery.