Supply Chain Management

1. As responsiveness increases, the convenience store chain is exposed to greater uncertainty. A convenience store chain can improve responsiveness to this uncertainty using one of the following strategies, especially for fresh and fast foods:
Local Capacity. The convenience store chain can provide local cooking capacity at the stores and assemble foods almost on demand. Inventory would be stored as raw material. This is seen at the U.S. fast-food restaurant franchise Subway where dinner and lunch sandwiches are assembled on demand. The main risk with this approach is that capacity is decentralized, leading to poorer utilization.
Local Inventory. Another approach is to have all inventory available at the store at all times. This allows for the centralization of cooking capacity. The main risk is obsolete inventory and the need for extra space.
Rapid Replenishment. Another approach is to set up rapid replenishment and supply the stores with what they need when they need it. This allows for centralization of cooking capacity and low levels of inventory, but increases the cost of replenishment and receiving.

There are following ways to make convenience stores responsiveness.

    • To maintain high inventory level

    • By removing implied demand uncertaininty.

    • By quick replenishment of products or time management.

    • High Information system can also make convenience store responsive and decrease the other driver cost too e.g. transportation cost, holding cost etc.

    • Facilitate the customer by location and increase in capacity.

    • By making strategic fit in vertical and horizontal strategies of convenience stores that can make more responsive and support to achieve the competitive strategy.

Risks:

  If the convenience high level of inventory, it increases the holding cost that make convenience store less efficient.

The inventory can be wasted, because of uncertaininty of demand. In high level o f inventory there is very... [continues]

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