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Seven Eleven Case Study

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  1.          The convenience store chain can be responsive in below ways by reducing lead time

  • Analysis of daily data for every retail store and each SKU enabling forecasting and turnover rate to reduce replenishment time
  • Real-time data flow at POS, suppliers, and distributors
  • Stronger supplier base and relationship with the suppliers

Risks associated:

  • Data congestion due to the large volume and incorrect usage of data
  • Server breakdown and data manipulation by hackers
  • Risk due to natural calamities if suppliers are in the same compound

  1.          Risks due to Seven Eleven’s supply chain strategy

  • Depending too much on information systems
  • Absence of warehouse
  • Calamity or labor unrest at the supplier would lead to stock out the situation in stores
  1. Facility location
  • Market presence in high-density areas
  • 1 distribution center catering around 60 stores

Inventory management

  • The absence of inventory due to cross-docking
  • Micro matching between supply and demand helping increased responsiveness


  • Delivery during off-peak hours
  • The dedicated vehicle for each category
  • Delivery using scanner terminals
  • Store allotment per truck dependent on sales volume

Information infrastructure

  • Scanner and graphics terminals
  • POS linked to store computer
  • Store computer linked to ISDN

  1. Advantages of the current system
  • Products assorted as per required temperature at distribution center reducing perishability
  • Reduced number of vehicles for daily delivery from 70 to 11
  • Reduced delivery costs
  • Reliable and rapid delivery of fresh foods making chain responsive

Appropriate direct store delivery

  • Manufacturers and retailers are very close
  • Lead time critical
  • Demand from a retailer is high enough to require FTL

  1. 7Dream.com concept

[pic 1]

The US vs Japan

  • Stores in Japan - 10615
  • Stores in US - 5798
  • Japan will be more convenient depending on proximity and number of stores
  • Transportation cost in the US will be more as the distribution center is different and consumers prefer home delivery
  • Store density area ratio is more in Japan than in the US, making it inconvenient for US customers to pick up from stores




Increase in responsiveness

Product assortment will occur at the store thus increase in time

Increase in variety of fresh products

Increase in labor cost

Reduction in stock out

Increase in cost for CDC

Increase in the distribution network and support to stores

High coordination required between distribution center, wholesalers

Reduction in lead time for fresh products



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