SCM ASSIGNMENT 7-ELEVEN CASE STUDY

Drivers of 7-Eleven supply chain:To measure the performance of 7-eleven in term of responsiveness and performance, it become necessary to examine the logistical and cost functional drivers of supply chain which are following1) Facility:In any supply chain, the actual physical location where the product is manufactured, assembled or stored plays an important role. Decision regarding the role, locations, capacity and flexibility at facilities have a significant impact on the supply chains performance. In this 7-Eleven case, to ensure efficiency, the 7-Eleven Japan network included both company owned stores and third party owned franchisee. 7-Eleven offered its stores a choice from a set of 5000 SKU(Stock keeping unit). Each store carried on average about 3000 SKU depending on local customer demand. 2) Inventory:It encompasses all raw material, work in progress and finished goods within a supply chain, changing inventories policy can dramatically alter the supply chains efficiency and responsiveness. The 7-Eleven company has to keep low inventory because the goods at their convenience store have almost predictable demand. 3) Transportation:It entails inventory from point to point in the supply chain. Transportation can take the form of many combinations of modes and routes, each with its own performance characteristics. It has a large impact on supply chain responsiveness and efficiency. The distribution system at 7-Eleven was flexible enough to alter delivery schedules depending on customer demand. At the distribution centre, delivery at like products from different suppliers was directed into a single temperature controlled trucks. 4) Information:It consists of data and analysis concerning facilities, inventories, transportation, cost price and customer throughout the supply chain. 7-Eleven attributed a significant part of its success to the total information system installed in every outlet and linked to head quarters, suppliers and the 7-Eleven distribution centers. In 1982 7-Eleven started using POS System comprising POS cash registers and terminal control equipment. later on the company included the hardware system like graphic order terminal, scanner terminal, store computer,POS register. 5) SourcingIt is the choice of who will perform a particular supply chain activity.7 eleven distribution system tightly linked in entire supply chain. the major objective is to have a good distribution system and information centers to track sales of items and offer short

replenishment cycle time like in this 7 eleven case study the transportation was provided by Transfleet ltd. A company setup by Mitsui and co. for the exclusive use of 7 eleven Japan. 6) PricingIt determines how much a firm will charge for goods and services that it means available in the supply chain. Pricing affects the customers behavior of the goods or services.