7-11 Supply Operations Management

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7-11 SOM Study - Final

Group 1

LRSP - 433

March 3, 2010

Pledged 3/3/2010

Table of Contents
Problem Statement4
Service Design and Characteristics6
Service Analysis and Selection7-8
Sales Production & Forecasting9-11
Breakeven Analysis12-13
Capacity Management (includes Decision Tree)14-15
Inventory Management and Materials Requirements16
Logistics and Supply Chain Management17
Quality Management and Implementation18-19
Prototype Design20-21
Conclusions & Recommendations22
Appendices - Tables/Figures/Graphs24


Extensive research into 7 Eleven’s history and current status finds there is no evidence 7-Eleven has ever had one of their stores provide a drive through service. The company that pioneered the convenience store concept was founded during 1927 in Dallas, Texas and the concept was developed during their first five years of operation. The company was initially an ice company and its retail outlets began selling milk, bread and eggs as a convenience to local customers. Almost 20 years later (1946) the name 7-Eleven originated in when stores adjusted their hours of operation to 7 a.m. to 11 p.m. (7-Eleven About Us, 2010).

7-Eleven, Inc. has become the world’s largest operator, franchisor and licensor of convenience stores. Based in Dallas, Texas, the company operates, franchises and licenses more than 6,970 stores in the U.S. and Canada. The company operates and franchises more than 5,900 (4,550 franchised) stores in the United States and they serve approximately seven million customers each day. Store count exceeded 36,000 worldwide in April 2009. Internationally, 7-Eleven operates, licenses and affiliates convenience stores in countries including Japan, Taiwan, Thailand, South Korea, China, Hong Kong, Malaysia, Mexico, Singapore, Australia, Philippines, Indonesia, Norway, Sweden and Denmark (7-Eleven Inc, 2010). 7-Eleven marketing strategy focuses the needs of convenience oriented customers by providing a broad selection of fresh, high quality products and services at everyday fair prices, and speedy transactions. Each store's selection of about 2,500 different products and services is tailored to meet the needs and preferences of local customers. Stores typically vary in size from 2,400 to 3,000 square feet and are most often located on corners for great visibility and easy access.

7-Eleven’s food service offers a proprietary line of prepared-fresh-daily and daily delivered deli sandwiches, wraps, breakfast sandwiches and a wide assortment of baked goods. Well known 7-Eleven proprietary products are; Big Gulp fountain soft drink, Big Bite grill items, the Slurpee beverage and fresh-brewed Café Select coffee. 7-Eleven is also one of the nation's largest independent gasoline retailers. In addition to the food and gasoline service, 7-Eleven offers patrons a number of convenient services designed to meet the specific needs of individual neighborhoods, including automated money orders, copiers, fax machines, automatic teller machines, phone cards and, where available, lottery tickets. Key Milestones

* 7-Eleven, Inc. is privately held and became a wholly owned subsidiary of Seven-Eleven Japan Co., Ltd. in Tokyo, Japan, and its affiliates on Nov. 9, 2005. * Company launched its private-label brand, 7-Select, in 2008 and introduced 32 new products to stores. * 7-Eleven introduced Yosemite Road Wines to their stores * In 2009, 7-Eleven began offering a Hot Foods Menu - includes pizza, chicken tenders, chicken wings, breakfast sausage, egg and cheese quesadillas and hash-brown potatoes.

7-Eleven has become much more innovative since the mid 1990's. They have evolved from a decentralized retail organization, with most store support functions handled in each geographically...
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