Seven-Eleven Japan Case

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Tanpin Karin is a demand-oriented method of chain management successfully used by Seven-Eleven`s Japan. It`s credited to the company`s CEO, Toshifumi Suzuki, who started to develop it during the 70`s in response to a shift in the market from a seller`s orientation to a buyer`s drive. Until then, the inventory decision-making process was led by supply-chain management practices – items were seen as commodities and replenished according with the amounts that they had sold in the past. In contrast, the Tanpin Karin system changed the practice to an item-by-item store-level inventory analysis framework to fulfill decision-making based on human knowledge. Under this system, employees use POS data combined with customer demographics and other unique factors (like weather, time of the day, retail context, neighborhood events) to form educated hypotheses about demand and then place orders. The method is supported by innovative technologies as an IT system continuously upgraded to share data with suppliers and between locations and tablet PCs order books, besides comprehensive work-force trainings. In 2004, under Suzuki`s direction and mostly because of its innovative inventory management method, Seven Eleven was the country`s highest grossing retailer with sales of 2.343 billions of yens. Seven-Eleven used a mix of technology and human knowledge to develop a competitive advantage that, as far as 2004, any competitor has been unable to achieve. Its differential resides in the human interpretation of good quality data that drives all the decision-making concerning chain value management. With the information provided, we can assume that the company operates between stages 4 and 5 in regards of data and IT analytical capabilities. We can also assume, with some risks, that having used this practice for the last 30 years, it`s pillars (technology innovation, human resource investment and supply relationship) are already strongly rooted in the company`s culture and...
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