TABLE OF CONTENT
1. Case Background
6. 7-Eleven in the United States*
The content (page 3 to 11) is based on questions 1, 2, 3, 4 and 6, page 88 of the textbook “Supply Chain Management: Strategy, Planning & Operations” by Sunil Chopra & Peter Meinld (Pearson Education, 3rd Edition). •
Generally, questions 1 and 3 are answered by four categories of “Facilities”, “Transportation”, “Information” and “Inventory”. In each section, there is discussion about practices that SEJ has done or firms should do and the risks involved. •
Questions 2 and 4 are answered mainly in section 3 “Transportation”. •
Question 6 is discussed in section 6 “7-Eleven in the United States”
The case study reports about the Supply Chain Strategy of Seven Eleven Japan (SEJ), the largest convenient store operator and franchisor in Japan. Seven Eleven Japan provides several helpful understanding about achieving supply chain strategic fit in the convenient store industry. In this industry, responsiveness of the supply chain is the most important factor. Firstly, SEJ has a set of facilities that are strategically responsive. Its facilities are decentralized in terms of both location and capacity. The report also discusses about the benefits and risks involved. Secondly, SEJ’s transportation system is not only relatively efficient but also responsive and capable of rapid-replenishment. The system is a cross-docking transportation model with goods flow through distribution centers. Advantages as well disadvantages of the model are discussed. Thirdly, SEJ invested in a powerful information system that allows rapid and efficient communication. Point of sales data are utilized to bring about a competitive advantage and a smooth cooperation of with suppliers. Features, benefits and risks associated with the system have also been discussed. Fourthly, SEJ practices an inventory management strategy that place great importance on freshness and choose to reduce flow time instead of holding more inventory to be responsive. Furthermore, the report discusses about the recent moves of SEJ to duplicate the supply chain structure in the United States.
Seven Eleven Japan (SEJ)
SEJ is the largest operator and franchisor of convenient stores in Japan. Since its establishment in November 1973, SEJ has been growing quickly. By July 2007, SEJ has 11,704 stores in Japan. In July 2007, 7-Eleven also became world’s largest retail chain store with more than 32,000 stores all over the world . 1.2
This case study, by examine the supply chain strategies of SEJ, aims to offer understandings about supply chain strategies in the convenient store industry. With those understandings, several insights about how to achieve strategic fit in this industry can be gained. 1.3
Strategic Fit in the convenient store industry
To achieve strategic fit in this industry, firms must understand the customer needs, demand uncertainty and supply chain capabilities. After that, firms must develop and direct their strategy to fit with the requirements from customer and the supply chain. Below are some characteristics in customer needs and supply chain requirements in this industry. •
Batch size: Usually small to medium
Response time that customer can tolerate: Medium to short. Customers usually expect to conveniently get the item they want in short time •
Variety: Moderately important
Service Level: Medium to high
Price: Higher than large supermarkets and wholesale malls •
Product innovation: moderately important
Apparently, in the convenient store industry, responsiveness is a key factor of the supply chain. Moreover, SEJ places much more emphasis on the freshness of the produce it sells. Therefore, SEJ facilities...
References: 1. Chopra, Sunil and Peter Meindl. 2007. Supply Chain Management: Strategy, Planning & Operations. 3rd Ed. Pearson Prentice Hall.
2. Whang, Seungjin 2001. Seven Eleven Japan. Stanford Global Supply Chain Management Forum. SGSCMF-003-1998 (Rev. 2002)
3. Lee, Hau L. "The Triple-A Supply Chain." Harvard Business Review 82, no. 10 (2004): 102-112.
4. "Cross docking & Cross Dock Applications." Benchmark Logistics LLC. http://www.benchmarkscm.com/cross_docking.html
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