NAME: Afnan Ahmed

ID: BUS-20F-006
CLASS: BBA-5B
SUBJECT: SUPPLY CHAIN MANAGEMENT

SEVEN-ELEVEN CASE STUDY (ASSIGNMENT #02)

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 adopting the same strategies as
Seven-Eleven Japan, such as having multiple locations, quick restocking, the deployment of the
right technology, and an equally responsive supplier. The expenses and unpredictability of
demand are the hazards connected with this system. If demand patterns shift substantially or
the consumer base shifts, Seven-Eleven will be left with an unnecessary operation. In the case
of Seven-Eleven Japan, several operations might be shut down if an apartment building or
significant employer closes or moves.

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. The main risk for seven-eleven is the possible expense of transportation and receiving at
stores, which might be very expensive.

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 Japan decided to run a highly responsive business and picked a supply chain
layout that fits this strategy. They choose the locations of their facilities in such a way as to
oversaturate an area with stores, making it easy for customers to shop there and for their own
delivery trucks to travel between stores and restock inventory. In order to replace the inventory
that has been sold during that delivery time, items are made utilizing a pull system, which uses
an information system that connects directly to the supplier and distribution center. The
transportation system can be adjusted to achieve efficiency and maximum responsiveness.
Q4. Seven-Eleven does not allow direct store delivery in Japan but has all products flow thought
its distribution center. What benefit does Seven-Eleven derive from this policy? When is direct
store delivery more appropriate?

Ans. The benefits of delivery through a company's own distribution center are complete system
management, demand aggregation, and less disturbance at retail locations. The ability of the
store manager to give outstanding customer service would be limited if multiple suppliers
attempted to make two or three deliveries each day. The Seven-Eleven system would have a
harder time adjusting to each of these suppliers' preferred methods of operation, inventory
systems, truck sizes, etc. Rather than being stored entirely on Seven-Eleven system, the
demand and production data would need to be shared. Pull production might not be able to
deliver the responsiveness that Seven-Eleven needs for things that cannot be made fast.

Q6. Seven-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.

Ans. The supply chain structure for the US market can be similar to that of Japan, but it will
almost certainly not function as efficiently as in Japan.
The culture and business culture are partly to blame for this. No matter how similar-minded
supply chain partners might seem to be, it would be very challenging to replicate the
atmosphere of cooperation that dominates Seven-Eleven Japan.
The drawbacks of this system include the need for Seven-Eleven to operate two systems
throughout the United States, depending on whether the area might be classified as a densely
populated urban area or a rural area. It would be very expensive to operate the Seven-Eleven
Japan system in middle America. The number of nearby 24-hour options available to American
consumers in the area is considerable.
However, the Japanese strategy has been very effective and has shown huge benefits over the
U.S. systems in place through financial and operational measures. As the case makes apparent,
Seven- Eleven's performance in the United States has been terrible; it is certain that continuing
with the same strategy and operations will lead to more failure. To test the system's
effectiveness in the United States, a hybrid system might be used in a few specific markets.

Q7. The United States has food service distributors 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 main benefit of having someone else restock inventory is lower expenses for your own
system in terms of labor, transportation, and material handling. It may be possible for the
distributors to carry out the aggregation/demand smoothing function with little involvement
from the individual Seven-Eleven franchise, depending on how supply and reordering
operations are set up.
The disadvantages of the outsourced replenishment service include a general loss of control,
more deliveries to individual stores, and the challenge of integrating data flows across several
platforms.