Seve-Eleven Japan

In: Business and Management

Submitted By alexrohaly
Words 832
Pages 4
Supply Chain Management
Case: Seven-Eleven Japan Co.

1 Responsiveness

* In general, a convenience store supply chain has three ways of being responsive:

1.1 In-Store Capacity * Integrating cooking equipment inside the stores will match supply and demand for warm dishes. The process of cooking and assembling the food will be moved after the customer order arrives (i.e. pull process) reacting directly to consumers demand. This shift implies a decentralization of the supply chain hence, requiring higher costs and poorer utilization (i.e. efficiency loss). Furthermore, training costs incur since employees at the stores need to run the machines.

1.2 Local Inventory Keeping stock holdings high at the store also is a way of being responsive and offering a high service level. Although this allows for the centralization of cooking equipment, extra space is needed and the efficiency of the supply chain is contingent on the correct forecast of demand thus, creating idle inventory or even wasted inventory if the products are perishable when demand deviates from the inventory level. 1.3 Rapid Replenishment This approach is used by Seven-Eleven. High delivery frequency sets a high responsiveness at the store but increases delivery costs. Furthermore, it keeps the absolute number of inventory items needed to run the store low (i.e. stores are can be smaller than if local inventory was build up), even though the store capacity usage is high. Rapid replenishment also leads to a lower safety stock. Overall increasing responsiveness also increases cost. 2 Rapid Replenishment * As stated above, a high delivery frequency increases delivering costs. Also, the time spent for receiving the products coming in increases with the number of deliveries. Depending so heavily on their delivery system, in order to offer changing merchandise mix by location and…...

Similar Documents

7-Eleven

...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......

Words: 2460 - Pages: 10

Seven Eleven

...CASE: SEVEN ELEVEN JAPAN Executive Summary I Executive Summary The goal of this case is to analyze how a firm can be successful by structuring its supply chain to support its supply chain strategy. Once Seven-Eleven Japan decided to provide responsiveness by rapid replenishment, it then structured its facilities, inventory, information, and distribution to support this choice. The case also brings up the question of whether the same approach can work in the United States, especially given the greater distances and lower store density. Table of Contents II I Table of Contents Executive Summary ................................................................................................................. I II List of Abbreviations......................................................................................................... III 1 Seven-Eleven Japan Co........................................................................................................ 1 1.1 History and Profile ........................................................................................................... 1 1.2 Framework of further discussions .................................................................................... 1 2 Discussion ............................................................................................................................ 1 2.1 Supply Chain Responsiveness ..................................................................

Words: 2194 - Pages: 9

Seven-Eleven Case Study

...Seven-Eleven Japan1 Established in 1973, Seven-Eleven Japan set up its first store in Koto-ku, Tokyo, in May 1974. The company was first listed on the Tokyo Stock Exchange in October 1979. In 2004 it was owned by the Ito-Yokado group, which also managed a chain of supermarkets in Japan and owned a majority share in Southland, the company managing 7-Eleven in the United States. On September 1, 2005, Seven & I Holdings Co., Ltd., was established as the holding company for Seven-Eleven Japan, Ito-Yokado, and Denny’s Japan. Seven-Eleven Japan realized a phenomenal growth between the years of 1985 and 2007. During that period, the number of stores increased from 2,299 to 12,034, annual sales increased from 386 billion to 2,574 billion yen; and net income increased from 9 billion to 91.5 billion yen. Additionally, the company’s return on equity (ROE) averaged around 14 percent between 2000 and 2004. In 2004, Seven-Eleven Japan represented Japan’s largest retailer in terms of operating income and number of stores. Customer visits to Seven-Eleven outlets totaled 4.1 billion in 2007, averaging almost 35 visits to a Seven-Eleven annually for every person in Japan. Company History and Profile Both Ito-Yokado and Seven-Eleven Japan were founded by Masatoshi Ito. He started his retail empire after World War II, when he joined his mother and elder brother and began to work in a small clothing store in Tokyo. By 1960 he was in sole control, and the single store had grown into a $3 million......

Words: 4121 - Pages: 17

7 Eleven

...7-ELEVEN HOW TO TRUN THE SITUATION AROUND In April, 2011. Allen Zhang, the 7-eleven’s Chief Operator of Eastern Market in China, was standing in front of the window of his office. He was called into deep thought by the dilemma facing the company. On the video conferencing just held, headquarter in Taiwan was very dissatisfied with the poor performance of the branch office in Shanghai, which runs counter to its expectations. Allen looked at the crowded street. He found that the only 7-eleven convenience store on the street was besieged by two FamilyMart stores that were filled with customers. He couldn’t help wondering: What’s wrong with the company’s strategy that was so successful in such overseas markets as Japan, Taiwan, and US, but failed the competition in Shanghai? What contributes to the competitor’s success? Is it because the voluntary chain style that FmailyMart adopts is superior than the regular chain style that 7-eleven adopts in Shanghai? If 7-eleven were to open its market by changing the regular chain style to voluntary chain style, would it turn the situation around or would it evoke new problems? Obsessed with all of these questions, Allen realized that it is time for some changes for the company to achieve its initial goals and as the big market share as possible in this promising market. CONTEXT THE CVS (CONVENIENT STORE) INDUSTRY The prosperity of the convenient stores is because supermarkets are almost all of large scales and in the......

Words: 4172 - Pages: 17

Seven Eleven Japan

...example a nearby baseball game increasing the demand for beer and chips. These customer needs causes a high implied demand uncertainty. Products properties: middle range of products (3000SKUs); 60% of total sales at each store are processed and fast foods; 50% changes in the course of a year due to seasonal demand & new products; local preferences are important and vary; different consumption patterns throughout the day; stores have limited shelf space and little buffer inventory (limited store size). 7-eleven supply uncertainty is medium to high. Supply uncertainty is increased due to: high diversity of products, perishable products (e.g. frozen and dairy products), the rate of innovative/number of new products, possible delivery delays due to dense traffic around stores as well as possible low yields further upstream the supply chain (2nd, 3rd tier suppliers of raw materials e.g. rice). All these attributes call for a responsive supply chain. Assignment/Question #2 7-Eleven has a high degree of responsiveness, due to the high implied demand uncertainty and medium-high supply uncertainty. It is very crucial for their supply chain ability to respond to wide ranges of quantities demanded, meet short lead times, handle a large variety of products, meet a very high service level and handle supply uncertainty due to the customer needs mentioned above. Additionally they are innovative in the sense that they introduce constantly new products, as well as new services, to attract......

Words: 656 - Pages: 3

Supply Chain of Seven-Eleven in Japan

...1. What has Seven-Eleven done in its choices of facility locations, inventory management, transportation, and information infrastructure to develop capabilities that support its supply chain strategy in Japan? Seven-Eleven has two levels of facility locations, one is distribution center, and another is retailer store. Distribution center is a platform to collect and allocate the order from supplier to retail store. Limited number of distribution center supports the near cluster stores. Distribution center focus on efficiency rather than responsiveness to transmit product. Seven-Eleven tends to open the stores in a dense network. It opened the majority of its new stores in areas with existing clusters of stores. Dense stores can maintain a high responsive level to the market. Besides, it also can reduce delivery cost. For instance, the trucks do not need to replenish stocks in dispersed locations. This makes the supply chain be more effective owning to the faster and convenience transportation route. In view of the inventory management, Seven-Eleven keeps no stock in distribution center and limited inventory in retailer stores. Supplier will immediately deliver stock to distribution center if receive store order. Store only keep daily inventory and place the product in particular time to response customer buying behavior. For example, breakfast, newspaper and fresh food will be placed in the shelves on the morning. The popular dinner box is placed in the......

Words: 1417 - Pages: 6

7-Eleven Supply Chain

...CENTER FOR INFORMATION SYSTEMS RESEARCH Sloan School of Management Massachusetts Institute of Technology Cambridge Massachusetts 7-ELEVEN Japan Co., Ltd.: Reinventing the Retail Business Model Kei Nagayama and Peter Weill January 2004 CISR WP No. 338 and MIT Sloan WP No. 4485-04  2004 Massachusetts Institute of Technology. All rights reserved. Research Article: a completed research article drawing on one or more CISR research projects that presents management frameworks, findings and recommendations. Research Summary: a summary of a research project with preliminary findings. Research Briefings: a collection of short executive summaries of key findings from research projects. Case Study: an in-depth description of a firm’s approach to an IT management issue (intended for MBA and executive education). Technical Research Report: a traditional academically rigorous research paper with detailed methodology, analysis, findings and references. About the Center for Information Systems Research CISRMISSION CISR was founded in 1974 and has a strong track record of practice based research on the management of information technology. As we enter the twenty-first century, CISR’s mission is to perform practical empirical research on how firms generate business value from IT. CISR disseminates this research via......

Words: 8109 - Pages: 33

7-Eleven

...access 24/7, 7-Eleven welcomes every customer to get their daily needs. We are providing groceries, snack foods, candies, instant foods, drinks, reading materials, and also services such as prepaid reload and ATM service where customers can fulfill their daily needs even though they don’t have time to shop. All of our 1,497 stores are open 24 hours everyday out of 7 days in a week to assure that customers can get anything they need anytime and anywhere. We create a simple and convenient as an adjustment toward people’s lifestyle, which is very mobile and active. With our motto, 7-Eleven will Always There For You. Company Description History Founded in 1927, 7-Eleven is known as The Southland Ice Company in Dallas, Texas whom the founder is J. C. Thompson. It was started as an ice vendor which eventually began offering milk, bread and eggs on Sundays and evenings when grocery stores were closed. The idea managed to satisfy the customer and also increased sales of the company. (7-Eleven Malaysia Sdn. Bhd., 2010) The first company’s convenient outlets were known as Tote’m stores which named since customers ‘toted’ away their purchases. It became 7-Eleven when the stores extended its business hours from 7 a.m. until 11 p.m. and open seven days a week. The company’s corporate name was changed from The Southland Corporation to 7-Eleven, Inc. in 1999. (7-Eleven Malaysia Sdn. Bhd., 2010) Company’s Profile 7-Eleven Malaysia Sdn. Bhd. is the owner and operator of 7-Eleven stores......

Words: 3382 - Pages: 14

Seven Eleven

...Sunil Chopra TEACHING NOTE: SEVEN-ELEVEN JAPAN CO. The goal of this case is to illustrate how a firm can be successful by structuring its supply chain to support its supply chain strategy. Once Seven-Eleven Japan decided to provide responsiveness by rapid replenishment, it then structured its facilities, inventory, information, and distribution to support this choice. The case also brings up the question of whether the same approach can work in the United States, especially given the greater distances and lower store density. Questions 1. A CONVENIENCE STORE CHAIN ATTEMPTS TO BE RESPONSIVE AND PROVIDE CUSTOMERS WHAT THEY NEED, WHEN THEY NEED IT, WHERE THEY NEED IT. WHAT ARE SOME DIFFERENT WAYS THAT A CONVENIENCE STORE SUPPLY CHAIN CAN BE RESPONSIVE? WHAT ARE SOME RISKS IN EACH CASE? 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...

Words: 1251 - Pages: 6

Seven Eleven Japan

...better tracking– easy to get information from DC rather than getting it from each suppliers Reduce monitoring and administering at retail stores (since everything is taken care by 7-11 staffs) DSD benefits: Cost efficiency – DSD is better since Manufacture would take care of goods deliveries and need not maintain a distribution system Reduce out bound logistics cost out of DC – retail store delivery Efficient if demand of a store is very high and constant Less Variety Few Delivery destinations 5. 7dream concept for e-commerce delivery and pick up The goal is to take leverage of the existing distribution system. It is more successful in japan rather than US as japan because the store density is high in japan than in US. US people wouldn’t mind home delivery unless if it is not available. 6. It would work well with japan as the culture and the location density suit them. As US is so vast in landscape it only suits in dense urban areas Pros Low logistics cost Fresh supplies Operational efficiency Cons Manufacturers prefer DSD as they would have more control on it Low control on replenishment – responsiveness 7. Pros Responsibility of supplier - reduce operational cost Cost effective Cons Less flexibility Loss of control over replenishment – responsiveness Less Quality Information from each supplier is difficult to get...

Words: 541 - Pages: 3

Seven Eleven

...Seven Eleven Case Study Questions 3, 4 and 6 Question 3 What has Seven Eleven done in its choice of facility location, inventory management, transportation and information infrastructure to develop capabilities to support its supply chain strategy in Japan? In order to support it’s supply chain strategy in Japan, Seven Eleven has developed a number of capabilities to ease the movement of inventory to and from its distribution center and around it’s entire supply chain network. One method in particular that Seven Eleven has implicated is its cluster location strategy. This is where an average of 50 to 60 stores along side a distribution center are located within a region of demand in Japan. This approach provides Seven Eleven with a centralized strategy to its supply chain; meaning an effective distribution network is formed across the company as the stores and distribution center are located within close proximity to each other allowing for a reduction in transportation times and cost. Another strategy Seven Eleven has implicated to support its supply chain strategy is its effective use of a combined delivery system. This enables the company to distribute products in a more efficiently manner across the supply chain network, as products that fall into similar temperature categories can be transported together and to several store at one given time. Seven Eleven’s investment in inventory management and information Infrastructure has also aided improvements......

Words: 1164 - Pages: 5

Japan

...More Globalization To Solve Japan's Prolonged Economic Stagnation: 2020 Tokyo Olympic, Establishment of Foreign Companies and Cultural Reform/Cultural Ramification Before Japan was globalized it was secluded from the rest of the world for nearly two centuries from1603 to 1868. This time period was called the Tokugawa Period. Even though Japan closed its ports to foreign trade, it was self sustainable and independent. This self sustainable society was maintained through its unique producer-consumer relationship and the "reuse recycle" practice in commerce due to the island's limited resources. Repair merchants such as tinker, ceramics repairers and truss hoop repairers supported a society where nothing was thrown away but instead carefully repaired and reused until the products were truly un-amendable. For example, tinkers used special techniques and charcoal heat to weld holes in pots and kettles with other metals; ceramic repairers glue broken ceramic pieces together with sticky rice and applied heat; paper makers buy used papers and blend them to make a variety of paper from writing paper to toilet paper (Staff). The Tokugawa Period served as a model of a flourishing sustainable society to the Japanese. After Japan was introduced to globalization during the Second World War, the nation benefited from becoming a export driven economy, business policies such as the lifetime employment policy promoted the efficiency of the company, and the cultural influences on business......

Words: 3659 - Pages: 15

Eleven

...In the short story, “Eleven” by Sandra Cisneros, a young girl is describing her 11th birthday at school. The girl, whose name is Rachel, offers her opinion of how she doesn’t any different on her birthday then the day before. In the story, Mrs. Price, falsely claims Rachel of owning an ugly red sweater. In this short story, the symbolism used in the 5th paragraph in where she wishes she was a hundred and two then eleven as she would have known what to say to the teacher Mrs. Price when Mrs. Price put the red sweater on her desk. Showing that being a hundred and two you’d have entirely more knowledge then an eleven year old. This meaning entirely relates to the story as early in the passage, as when Rachel is describing on how you never really feel how old you are when you turn the next age. You don’t feel as smart in the age you’re in until you’re towards the next age. You get smarter as you age on is what Rachel is trying to get across. Throughout the passage you see the red sweater as a symbol. The sweater can be seen to symbolize the power other people have over Rachel. Say we see the classroom as a mini-social sphere, then it becomes obvious that Rachel doesn’t have much of a say on how things are going to go down. Mrs. Price sets the sweater on Rachel’s desk, and even though it doesn’t fit, smells of cottage cheese, and repulses her with the germs that are not hers. The powers others hold over you can be both scary and surprising, as we see is the case with Rachel and......

Words: 490 - Pages: 2

Seven-Eleven Japan

...The University of Jordan Faculty of Business Marketing Strategic Management The University of Jordan Faculty of Business Marketing Strategic Management Marketing Strategic Management Assignment – SWOT Analysis for Islamic International Arab Bank (IIAB) Marketing Strategic Management Assignment – SWOT Analysis for Islamic International Arab Bank (IIAB) Done by: * Dania Done by: * Dania Table of Contents Introduction 3 IIAB Strategic Statement: 3 Vision Statement: 4 Mission Statement: 4 Our Policy Statement: 4 Objective Statement: 5 Strategic Statement: 4 External Environmental Scanning: 5 Macro-Environment & PESTEL Analysis 5 Five forces framework: 7 Market segmentation & Competitor Grouping 9 External Factors Analysis Summary (EFAS) 10 Internal Factors Analysis Summary (IFAS) 11 Stratigic Factors Analysis Summary (SFAS) 13 Introduction The Jordanian banking sector go back to the year 1925, when the Ottoman Bank commenced its operations in the country as the first commercial bank, followed by Arab Bank in 1934 and the British Bank of the Middle East in 1949. The banking sector remained limited to these three banks until 1955, when three new commercial banks were incorporated during the period 1955 - 1960, namely, Jordan National Bank, Jordan Bank, Cairo - Amman Bank in addition to Rafidein Bank, which opened its first branch in Jordan in 1957. The banking sector did not experience any major developments......

Words: 2423 - Pages: 10

Seven Eleven Japan Supply Chain Analysis

... SUPPLY CHAIN MANAGEMENT 7-11 JAPAN History 7-Eleven is part of an international chain of convenience stores, operating under Seven-Eleven Japan Co. Ltd, which in turn is owned by Seven & I Holdings Co. of Japan. Eleven, primarily operating as a franchise, is the world's largest operator, franchisor and licensor of convenience stores, with more than 46,000 outlets. Timeline 1973: York Seven Co., Ltd., established 1974: First store opened (Toyosu Store, Koto-ku and Tokyo) 1975: 24-hour operations (Toramaru Store, Koriyama, Fukushima Prefecture) begun 1976: Total number of stores reached 100. Integration of suppliers and joint delivery started. 1978: Corporate name changed to Seven-Eleven Japan Co., Ltd 1980: Total number of stores reaches 1000 1982: POS and EOB ordering systems introduced. 1985: Introduction of interactive registers capable of transmitting information to and from the headquarters and stores. 1997: Introduction of fifth generation Total Information System 2000: Establishment of e-commerce Company, 7dream.com 2001: Establishment of IYBank Co., Ltd., through joint investment with Ito- Yokado Co., Ltd. Installation of IYBank ATMs in stores. 2004: Establishment of SEVEN-ELEVEN (BEIJING) CO., LTD as a joint venture. Competitive strategy: The strategy followed by 7-11 was to provide high-availability of a variety of reasonable quality products at reasonable prices. Strategy of 7-Eleven Japan Market Dominance was the main objective of 7-11. This was......

Words: 715 - Pages: 3

Chuukan Kanriroku Tonegawa Episode 21 | 6.8 Love Under the Stars (2015) | Vestibular