Seven Eleven Japan Co.

[pic 1]

SUPPLY CHAIN MANAGEMENT

SBR - 1

SEVEN - ELEVEN JAPAN CO.

GROUP 5 - DIVISION A

Anh Hoang Dau - MS18GF051

Hassan Moosa Nihal - MS18GF034

Shravan Vohra - MS18GF024

Harsh Jain - MS18CMM086

AkshaySaikumar Mukkami - MS18GF035

Question 1: A convenience store claim attempts to be responsive and provide customers what they need, when they need, where they need it. What are different ways that a convenience store supply chain can be responsive? What are some risks in each case?

Different ways in which a convenience store supply chain can be responsive:

• Availability of products and services as per the local demand and by knowing the customer through research – In this case the store would have to some research in order to analyse demand and make those products and services available and it should ensure to stock goods in excess in order to fulfil the demand.

The risk here would arise when the demand falls suddenly due to competitors, and the goods will have to remain on shelf for a long time. Also this would result in the risk of requirement of additional space for storage and the risk of high research costs.

• Provision of Value added services:  In addition to its core business the stores should also consider providing value added services as mentioned in the case like provision of bills payment, tie up with banks, home delivery etc to enhance customer satisfaction and market share.

The risk factor here is “moving away from core competency”, which would lead to diversion of focus and overall quality.

• Rapid replenishment of stock: Another way to be responsive is to set up rapid replenishment and supply the stores with what they need and when they need. This would ensure a centralization of systems and leads to low levels of inventory.

The risk factor here is the increase cost of replenishment and receiving.

• Extension of working hours:  They should consider extending working hours of the stores in order to cover all the customers and better convenience.

The risk here could arise with employee dissatisfaction and will lead to extra costs.

• Development of market dominance strategy: So as to work adequately, Seven – Eleven pick the strategy that they will open the new store close to the former one to make a thick groups as opposed to spreading the put away through all the guide just as zone. This can make a once in a lifetime opportunity for the other contender to exploit in the zone in which the Seven – Eleven does not exist. This is an obvious risk to increase the cost of infrastructure and management.
• E-commerce establishment:  This will help in avoiding constraints like time, location and product variety , but the risk factor into picture as it involves too much investment to maintain the website.

Question 2: Seven-Eleven’s supply chain strategy in Japan can be described as attempting to micro-match supply and demand using rapid replenishment. What are some risks associated with this choice?

The risks associated with this strategy of seven-Eleven are:

• Increased transportation costs: Rapid replenishment involves a lot of transportation which in turn leads to increased costs due to use of Gas, oil etc.
• Risk on systems: Micro matching of supply and demand requires an efficient net-working across functions within the supply chain. Obviously, it needs high quality staff as well as substantial investment into the management system. Therefore, the cost could be risen up and the business know-how might be leaked out if there are any flaws in the system.
• Increased operational costs: This strategy would lead to increased costs with regards to IT team as they would have to coordinate with individual stores as a centralized system.

• Risk of delay in transportation: In this strategy as transportation plays a major role, due to any uncertainty delay in transportation would lead to a lot of hassle choice.

Question 3: What has Seven-Eleven done in its choice of facility location, inventory management, transportation and information infrastructure to develop capabilities that support its supply chain strategy in Japan?

LOCATION:

1. Seven-Eleven Japan has based its network expansion policy on market dominance strategy which prevents competitors to come into the market.
2. Making clustering up 50 to 60 stores which was supported by a distribution centre.
3. Location is close to the customer as convenience is their main goal.
4. They also opened majority of its new stores in areas where demand already exist.
5. These stores where comparatively smaller in size, so it was making more profit per square meters than its competitors.
6. Focus on increasing of number of stores.

INVENTORY MANAGEMENT: