UNIVERSITY OF KARACHI

KARACHI UNIVERSITY BUSINESS SCHOOL (KUBS)

SUBJECT: SUPPLY CHAIN MANAGEMENT

ASSIGNMENT: SEVEN ELEVEN JAPAN
(CASE STUDY)

Submitted to:
MISS WARDAH IRFAN

Submitted By:
SIKANDAR AKRAM

Dated: 29-0CT-23
Question no 1

Risks Associated with Seven-Eleven's Supply Chain Strategy in Japan:

• The biggest risk is overstocking, as the rapid replenishment mechanism could result in surplus
inventory in stores if customer demand is not precisely projected.
• Inefficient inventory management can lead to excessive carrying costs and waste, especially for
perishable products.
• The system is primarily reliant on information technology, and any technological faults or
outages might affect the entire supply chain.

Question no 2
Capabilities Developed to Support the Supply Chain Strategy in Japan:

Facility Location:
Seven-Eleven strategically locates distribution sites to ensure efficient and timely product restocking.

Inventory Management:
The company has fast food plants and divides their goods into four different divisions to help with
shipment. They maintain track of their inventory using a computer system and a graphical order terminal,
and they scan products as they arrive. Their cash registers keep a careful check on the inventory as well.
They make certain that things arrive immediately before they are needed, such as sending supper
ingredients right before dinner.

Transportation management:
Seven-Eleven strategically places its locations near distribution centers (DCs). This helps them to deliver
goods to stores faster. They use trucks that maintain food at the proper temperature and deliver a single
type of food to multiple stores at the same time. They prefer to make deliveries when there is little traffic,
although they do not specify when that happens. To speed things up, they also use a scanner system. The
DCs themselves don't store stuff for long; they mainly help transfer things quickly from one place to
another.
Information:
Information plays an important role in managing the overall procedure. The visual order terminal, scanner
terminal, store computer, and POS register are the four main components of the information system.
These parts collaborate to manage inventory, organize deliveries from manufacturers to retail shops, and
evaluate sales data. The visual order terminal not only tracks sales and orders with suppliers and delivery
hubs, but it also directs shelf space allocation decisions. The scanner terminal improves delivery
efficiency, while the store computer, which is network-connected, keeps track of inventory, sales, and
orders. The POS register stores real-time client sales data as well as demographic data. In essence, the
information system acts as a centralized control system, coordinating facilities, transportation,
manufacturing, and distribution to ensure smooth operation.

Question no 3

Benefits of No Direct Store Delivery (DSD) in Japan:

• Everything is managed through a central distribution center. This allows them to keep track of
what they have and ensure that the products are always in good condition.

• They don't need as many vehicles to bring goods to stores on a daily basis. This saves money and
is environmentally friendly.

• They can load many things onto a single vehicle and deliver them all at once. This improves
efficiency and saves time.
Direct store delivery is a good idea for the 7dream delivery concept. But for Seven-Eleven Japan, it is
usually not needed, unless one store sells something special that is in high demand and is not sold in other
locations. It is also ideal for unusual, one-time items that are large and heavy, as well as for emergency
delivery.
Question no 4

The 7dream concept is designed to make the most of Seven-Eleven's distribution system and its easy-to-
reach stores. This concept focuses on using the stores as convenient places for people to pick up and drop
off items they buy online. This idea has the potential to be successful in both Japan and the United States.

In Japan, where people frequently visit convenience stores, many customers choose to pick up their
internet purchases in-store. This fits perfectly with the 7dream concept, providing convenience for people
who already visit Seven-Eleven stores regularly.

In the United States, the 7dream concept taps into the increasing trend of online shopping and the
growing demand for convenient pickup options. This approach can elevate the role of Seven-Eleven
stores as easily accessible locations for people to collect their online orders, making the stores even more
valuable to the community.