ISOM 319-E Operations Management
Case: Seven-Eleven Japan
February 7, 2013
Some different ways that a convenience store chain can be responsive are they can intergraded information systems, additional capacity which are manufacturing, distribution centers and retail store, they also can increase safety inventory, increased number of deliveries, and increased product variety and availability.
Some challenges and risks with micro-matching supply and demand using rapid replenishment are the risk for local capacity which is capacity is decentralized, leading to poorer utilization. The risk for local inventory is obsolete inventory, and it needs the extra space. The risk for rapid replenishment is increasing the cost of replenishment and receiving. The most risk is when supply and demand are not matched, and inventory excesses and shortages occur. Also, it will increase the transportation cost.
1. Facility location: Majority of its new stores in areas with existing cluster of stores. There are many stores in a particular area. Entry into any new market was built around a cluster of 50- 60 stores supported by a distribution center. Such clustering gave seven eleven Japan a high density market presence and allowed it to operate an efficiency distribution system.
2. Inventory management: Four categories of food are chilled temperature, warm temperature, frozen and room temperature. Seven Eleven’s information system manage inventory through their graphic order terminal and receive inventory using the scanner terminal. POS register of Seven Eleven tracks inventory at a very detailed level, and also manage deliveries to match demand by time of day.
3. Transportation: The transportation system is flexible to maximize responsiveness while also achieving efficiency. At seven Eleven Japan, all stores are close to each other, and the distribution center is located near them that can make one round delivery to all the stores faster,...
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