Supply Chain of 7 Eleven

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1. Describe the type of supply chain used by 7-Eleven. For example are they agile, adaptable, aligned?

7-Eleven is the largest operator and franchisor of convenience stores in the world, with more than 46,000 outlets and currently selling 500 million litres of petrol, $500 million of merchandise and serving almost 80 million customers worldwide. With figures like this, you have to wonder how they did it? Aside from the fact that the store operates 24 hours a day, 365 days a year and hence adhere to the ‘convenience store’ label, 7-Eleven addressed some key aspects that often other organisations overlook. “We must be open to change to remain successful,” said7-Eleven CEO Joe DePinto (and recent “Undercover Boss”) at the conclusion of his Tuesday morning keynote address at the IFA 2011 Annual Convention. Noticing a need to change, 7-Eleven turned their whole outlook around, focusing on the franchisees instead of focusing on the headquarters of the organisation. After all, the franchisees are the ones that work at ground level with customers on a day to day basis, establishing relationships and recognising customer needs. 7-Elevens response to a changing marketplace yielded significant benefits and further more allowed the implementation of technology and supply chain integration to increase functionality.

An efficient supply chain maximises planning, organising and helps distribute a flow of the organisations product to end customers. This is done through implementing innovative ideas and technology as a part of effective business-to-business networks.

In regard to 7-Elevens supply chain, there were definitely some major factors implemented that wreaked great results. In 2002 7-Eleven signed a 7 year contract with EDS throughout the united states. As stated by Deepak Patel (the integration service line director at EDS), the purpose of this signing was to implement an “XML-based integration system to automate the supply chain process for 7-Eleven’s more than 1,700 suppliers.” Previously small suppliers that could not afford an integrated system were recording transactions through printed invoices. With the new system “small suppliers can log on to a secure website and use an ID and password to submit invoices and track their progress, said Morrow. Large suppliers can transition from EDI to webMethods' XML-based Integration Platform over a period of time so that all of their systems eventually will be able to communicate with 7-Eleven using XML for data transfer”. EDS will also enable and host Vcom, an ATM like device that allows customers to easily cash checks, purchase money orders and obtain other financial services.

The implementation of the new system was summed up perfectly by Chief information officer Sharon Stufflebeme. "This agreement aligns well with our business objective of flexibility and scalability and meets the need to adapt as we change and grow. These applications help provide the support we need to continue to deliver customers what they want, when and where they want it."

7-Eleven also implemented other key technologies and models, such as the SAP Retail Merchandising System and it’s centralized purchasing and distribution model which will be explained in further detail below. As a whole, Total Quality Management was introduced ensuring quality standards were met throughout all stages of production and supply. Through implementing various systems, 7-Eleven’s supply chain efficiency dramatically improved. Orders could now be electronically processed in under 7 minutes and delivery truck routes could be mapped and maintained. Thus, it is evident that implementing technological systems has a major affect on 7-Elevens supply chain.

2. Describe the product characteristics of 7-Eleven and how this impacts upon replenishment.

7-Eleven has always been a provider of small everyday needs such as snacks, confectionary, cigarettes and fast food. However with a constant changing environment...
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