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?

There are many ways to make a convenience store be responsive toward

customers follow on their need and what are their seeking for. There many different
ways that a convenience store supply chain can be responsive eventhough there are
some risks for each case.
Firstly, they are bringing products closer to the customers. What makes it
differences is customers can get the item or buys an item close-by compare than
ordering that must be waiting for a few days. Examples, when an increased demand
for close-by,convenience stores ,Seven Eleven felt that besides bringing stores to
new areas, it could also continue to open stores in densely populated urban areas such
as Tokyo,Nagoya and Osaka.But, the risk might be incurred between the variety of
demand that cannot be fulfilled altogether at the same time. The customers also
possibility change their mind toward the same thing to others.
Secondly, offering variety of services toward customers. The offers that Seven
Eleven list such as ski lift voucher pass, payment of mail order purchases, internet
shopping, a meal service delivery, automatic teller machines installation in each store,
pick up online services, electronic money service that allow customers to prepay and
use a card or cell phone to make payment. On the other side, the system might be
break down for some time due the weather or the system failure to play well.
Thirdly, offering a flexible system to the customers. For examples, Seven Eleven
have established of operating hours to some customers due their respective needs and
easy to use beside the close-by locations for their purchases. The risk is some of
customers may be can and cannot use an e-commerce well, it might be hard for them.
Then, the service are not fully utilized by the customers.
Fourthly, an establishment of e-commerce (7dream.com). The goal was to exploit
the existing distribution system and the fact that stores were easily accessible to most
Japanese population.It is cause there is no extra charge for customers while their make
an order through the web provided.The customers also can pick up their online
purchases at the local convenience store. The problem might occurred when time of
delivery is over the date stated, the trust of customers become an issue. There might
be fraud of system that involved the person in charge in the chain.

Lastly, information and communication that were represent to the customers.

Acknowledge the information well about the demand trends for customers in a
particular area and addressing them. Beside, check on availability of stock to store
owners to enable them make any further process at the ease. For examples, each store
in Seven Eleven case carried about 3,000 SKUs on average,depending on local
customer demand and emphasized regional merchandising to cater precisely to local
preferences. On the other hand, it might be some problem within the time, weather
and others that cannot be avoid and the item cannot be reach by customer on time. It
cause some costs if the customers cancle the order to return back the parcel on the
store.

2. Seven-Elevens 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?
There are many risks for Seven-Elevens supply chain strategy in attempting to
micro-match supply and demand using rapid replenishment. But the main risk or the
biggest risk that would happen is the potentially high cost of transportation and
receiving at Seven-Eleven stores. It is a fact that when rapid replenishment happened,
it would finish off all inventory in stock. For this reasons the inventory need to be
deliver frequently, maybe several times a day. These deliveries would increase the
transportation cost by a lot. There is another reason for the increase of the
transportation cost which is the location of the stores. The suppliers and factories are
centrally located but the Seven-Eleven stores are scattered all across the city. The
effort that Seven-Eleven took to supply inventories several times a day to all the
stores would definitely increase the cost of transportation.
It is also possible for the increase of customers dissatisfaction. This is because
when the inventory for the store need to be restock several times daily, it will reduce
the store efficiency. For example it would reduce the store services and frequent
disruptions would occur and thus increase the customers dissatisfaction.
The next risks of micro-match supply and demand for Seven-Eleven using rapid
replenishment are the dependence of information system is high. Although using
information technology would give a great advantage to the business but it would also
give great disadvantages. When a company relying too much on information
technology, they are risking having a break down if the system fails. Seven-Eleven
Japan attributed a significant part of its success to the Total Information System
installed in every outlet and linked to headquarters, suppliers and the distribution
centers. The hardware system that was used by the store include graphic order
terminal, scanner terminal, store computer, and POS register. This is a prove that
Seven-Eleven relying too much on its information system. Any sudden breakdown of
the information system would halt the entire system of the stores, the distribution
centre, and the suppliers. Information system is also used to forecast customer
demand. When system failure occur, the situation of mismatch of stocks and demand
are sure to happen where there will be a mismatch between the customer needs and
the goods supplied. This situation would result in too many inventory or less in the
case where customer needs are inconsistent.
When attempting to micro-match supply and demand using rapid replenishment,
it would cause the unmatched of supply and demand and this would cause the
excesses and shortages of inventory. It is a basic knowledge that forecasts are the
most accurate for aggregate products. Therefore, forecast accuracy is crucial to micromatch supply and demand. When the information ordering and replenishment systems
are able to respond quickly to changes the customer demand to account for forecast
errors, this will increase the risk of insufficient capacity, and cause the transportation
costs to increase.

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?
Seven-Eleven Japan has chosen to operate a highly responsive operation and has
chosen a supply chain design that supports this strategy. Seven-Elevan Japan
emphasized regional merchandising to cater precisely to local preferences. Each store
carried food item, beverages, magazine and customer items.
Their facility location choices are to saturate an area with stores, thereby making
it easy for customers to shop and their own delivery trucks to move from store to store
to replenish inventory.
For inventory management, they have dedicated manufacturing plants to produce
fast food, and classify inventory according to four separate categories to assist in
transportation. Although related to their information system, they manage inventory
through their graphic order terminal and receive inventory using the scanner terminal.
The system that transmits directly to the supplier and distribution centre, goods are
produced using a pull system to replace what has been sold during that delivery
period. Their POS register also tracks inventory at a very detailed level.
The transportation system is flexible to maximize responsiveness while also
achieving efficiency. The key to store delivery was what Seven- Eleven called the
combined delivery system. There were four categories of temperatures of truck,
frozen foods, chilled foods, room-temperature processed foods, and warm foods.
Warm and chilled foods were delivered three to seven times a week, depending on the
weather. Each truck made deliveries to multiple retail stores. All deliveries were made
during off-peak hours and were received using the scanner terminals.
The transportation system is flexible to maximize responsiveness while also
achieving efficiency. Seven- Eleven Japan attributed a significant part of its success to
the Total Information System installed in every outlet and linked to headquarters,
suppliers, and distribution centers. Seven-Eleven became the first company in Japan
to introduce a POS system Comprising, POS cash registers and terminal control
equipment. An integrated services digital network (ISDN) was installed. Linking more
than 5,000 stores, it became one of the worlds largest ISDN system at the time.
process and feedback POS data quick to get with the two-way, high speed online
communication capability of ISDN. Sales data gathered in each store by 11.00 p.m.
were processed and ready for analysis the next morning. Seven- Eleven also have
hardware system included 1. Graphic order terminal for placing orders were linked to
the store computer, 2. Scanner Terminal deliveries from the distribution center, 3.
Store Computer were linked to the ISDN network, and 4. POS register were linked to
the store computer. The information system allowed seven- eleven stores to better
match and supply with demand

4. Seven-Eleven does not allow direct store delivery in Japan but has
all products flow through its distribution center. What benefit does
Seven-Eleven derive from this policy? When is direct store delivery
more appropriate?
The benefits that Seven-Eleven derive from this policy are : Decreasing the number of vehicle used for transportation. It would directly
reduce the handling. It also reduced the holding cost, delivery cost and less
time is used for the company. The company can concentrate more time on
their core activities.
Total control of the system. If Seven-Eleven asked several suppliers to do
deliveries every day, it would detract the store managers ability to provide
customer service. Seven-Eleven also need to share their demand and
production data with the suppliers.
Direct Store delivery more appropriate when : A store places or customer who orders with high volume/ low volume, but
with high value. If a store place or customers makes large orders and covers a
profitable percentage of the companys monthly profit, then a direct store
delivery is a great way to deliver the order.
The delivered items dont need any bulk broken at a DC or it requires a special
handling.
The supplier has a consonant system. For example, a daily newspapers
delivery.

5. What do you think about the 7 dream concept for Seven-Eleven

Japan? From a supply chain perspective, is it likely to be more
successful in Japan or the United States? Why?

The concept of Seven Eleven Japan is allows e-commerce sites to use Seven
Eleven stores as drop-off and collection place for online items by e-commerce
customers. It has been success while the customers are satisfied with their product
being shipped to the local convenience store rather than walk in. So, the best option to
be use is 7dream.com. Refer on the recent survey revealed that 92 percent of the
customers of e-commerce company more preferred to have their item by this
way.According to logistics, online deliveries can be copy by using Seven Elevens
current distribution network in Japan as a role model .The online delivery helps
supplier sort the items more efficiently for the store. Doing so will increase the
utilization of transportation which gives Seven Eleven the opportunity to offer a lower
cost alternative to having a package carrier deliver the product in house.However, if
more demand of online purchased, Seven Eleven will use up storage space and require
the store to keep the items well before the time of collection by customers.
Its seems this concept more suitable for the citizen who are living in urban areas
in Japan. It is cause the main goal that has been set to exploit the existing distribution
system and the fact that stores were easily accessible to most Japanese.Moreover, the
frequency of visits by customers to Seven Elevens Japan more encouraged the
successful of the convenience store within online delivery links with existing network
provided.

6. Seven-Eleven is attempting to duplicate the supply chain structure

that has succeeded in Japan in the United States with the
introduction of CDCs. What are the pros and cons of this approach?
Keep in mind that stores are also replenished by wholesalers and
DSD by manufacturers.
The supply chain structure for United States will be not operates smoothly like on
Japan, there are pros and cons of this approach :
Pros :
Consolidation of deliveries because the distribution system was linked each
other and entire supply chain for all product categories. When a store placed
an order, it was immediately transmitted to the supplier as well as the
distributor center and when the supplier received orders from all Seven-Eleven
stores and started production to fill the orders.
Monitor and control for product and and supply chain which are at CDC
deliveries of product like from different suppliers such as milk and sandwiches
were directed into a single temperature-controlled truck. With practice this
CDC, the quality of the product supplied along the supply chain can be
verified and control from the single centers.
Can reduces the workload at the stores when the inventory is delivered only
once a day, this shall make life easy for staff as they shall have schedule time
to spend on inventory management, hence they can provide much of their
remaining time completely focusing on the customer need and customer
satisfaction. With this distribution system enabled Seven-Eleven to reduce the
number of vehicles required for daily delivery service to each store, even
though the delivery frequency of each item was quite high.
Cons :
Increasing the wages of staff by sorting to delivery to stores every night
because they need to deliveries request from the store manager were sent
to the nearest CDC and by the 10.00 p.m.
Difficulty to manage the new systems, introducing the new systems is not
easy to do because its need an adjustment, especially for middle manager
and employees who are familiar with the old distribution systems

Difficult to control effectively, even overall CDC is very effectively in

distributing the product but it was very hard to control effectively because
its depends on distributions center

7.The United States has food service distributors that also replenish
convenience stores. What are the pros and cons to having a
distributor replenish convenience stores versus a company like
Seven-Eleven managing its own distribution function?
The first pros in having a distributor replenish convenience the stores are related
to cost. When someone else is replenishing stores, it would cost less in transportation
and material handling. This is because the cost depended on how supply and
reordering operations are designed. It is possible that the distributors perform the
aggregation or demand smoothing function with minimal intervention compared by
the individual Seven-Eleven franchise. Having a distributor replenish the store also
means that they do not have to invest anything in distribution centres, fleet, personnel
or trucks to perform this task.
The second pros in having a distributor replenish convenience stores are it added
value. We could say that a distributor brings much more value to United States
compared to Japan because considering the lower density of stores, a distributor is
able to aggregate deliveries across numerous competing stores. This enables a
distributor to reach levels of aggregation that cannot be accomplish by a single chain
such as Seven-Eleven. Distributor replenish convenience stores are value added also
because they understand customer demands very well.
The third pros are it will help the company to focus on their core business.
Creating a company is hard but to develop it is harder. If the company hire a
distributor replenish convenience stores, they can push that problem aside and focus
more on how to make their company become stronger.
The cons of having a distributor replenish convenience stores are the lack of
control and responsiveness. This is because there is no direct link between the
company, the convenience stores and the customers. The level of service consistency
cannot be monitored or controlled fully by the company.
When operation control is lacking, it would decrease the direct relationship
between the company and the customer. This is because all the business between the
company and customers need a third person between them which is the distributor. It
would be better if the company able to communicate with their customers themselves
without any third party.
Other than that, the cons of having a distributor replenish convenience stores are
the inability to exploit having large number of stores. It is certain that getting the job
done through the distributors has Seven-Eleven subsidize deliveries because they are
competing with smaller chains that may also be using the same distributor.