7- 11 Case Study

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Supply Chain Management Case Study 1 Seven-Eleven Japan Co. Background Seven-Eleven is a famous convenience store. And it is set up its first store in Tokyo in May 1974, it was found by Masatoshi Ito, the company was first listed on the Tokyo Stock Exchange in October 1979 It had increased its share of the convenience shore market since it opened. It success is greatly contributed to its careful planning, and its information system as well as distribution system. 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 risk in each case? Q3. What has…show more content…
What benefit does Seven-Eleven derive from this policy? When is direct store delivery more appropriate? The distribution system of Seven-Eleven enabled distribution centre (DC) act as centralized party to facilitate the delivery process. The advantage of using such system is reducing the number of vehicles of delivery service to each store. As DC act as centralized party, fewer vehicles can be assigned to different store to delivery different categories of goods. The number of vehicles visited each store every day is decreased from 70 to 11, from 1974 to 1994. For example, a vehicle is responsible for transporting frozen item and the other is responsible for warm temperature items. The vehicle that carrying frozen items can transfer goods to different stores. And this dramatically reduced delivery costs, time and enabled rapid delivery of a variety of fresh foods Seven-Eleven can enjoy the benefits from economic of scale that it has greater bargaining power compared with its suppliers. Since, there is a distribution centre, when all stores orders together, Seven-Eleven gains economies of scale from purchasing in bulk. Besides, DC is a flexible distribution, it can reduce the safety stock as well as the holding cost. It can lower the ordering costs to each shop, it is a kind of inventory management. It is a by track sales of item, it can provide accurate forecast of the order quantity,
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