Supply Chain Strategy by Seven-Eleven

Competitive Strategy

Supply Chain Strategy

Efficiency

Supply Chain Structure

Effectiveness

Logistical Drivers

Facilities

Inventory

Transportation

Information

Sourcing

Pricing

Q3: Seven-Eleven have done the following:  Store assessment that increased productivity of inventories and store space within consumer interface  Optimized time and cost in with the help of Seven-Eleven replenishment system  Efficient promotion in maximizing total system efficiency of trade and consumer promotion  Product introduction reflect effectiveness of new product development and introduction activities

 SEJ is characterized as a major innovator in convenience store operations; however this is not toimply the company preformed radical business process reengineering This continuous improvement is referred to as Total Quality Management, but referred to as kaizen in Japanese These innovations were in fact a sequential series of small changes and improvements, an example ofTotal Quality Management, which have been sustained since development in the early 90s and have hadsignificant impact on the business processes  SEJ started using an Integrated Service Digital Network (ISDN) to link their retail stores with their headquarters. This integrated networkedallowed retail stories to directly access the host computer and central database containing all the collected data and analyses. This essential data is gathered during every single transaction throughoutthe day
Strengths:  DSD (Direct store delivery) and CDC (Combined distribution centre) makes seven eleven networking strong.  Combined distribution system saves time.  Seven Eleven effectively does Micro matching of demand and supply.  Seven Eleven have various Franchises which also help in stronger branding.  Implementation of IT like connecting through ISDN, wide screen graphic display helps in Smoothing of flow of information.  Seven Eleven have very effective store management and transportation system Q4: Distribution  SEJ created a Joint Delivery Program to reduce the average number of deliveries to each store from 70 per day in 1974 to less than 10 per day at the present time  Product groups that require the same temperature zone are cross-docked at a single distributor and delivered in groups by geographical region  Trucks follow a strict route schedule that allows only a 10-minute error of margin  The truck may not spend more than a minute and half at each store and is in constant communication to facilitate emergency situations between store and HQ managers  SEJ also created a time-distribution system to change the product mix  Store managers walk throughout their stores carrying a tracking device to check stock levels and sales trends in order to place orders via the ISDN to HQ  These orders are transferred to wholesalers, manufacturers, and for use inlogistics. Typical orders for fast and fresh food items are placed three times a day, magazines once a day, and processed food items three times a week  SEJ knows that consumers needs in the morning are completely different in the evening, and distributes the most appropriate items at the different times of the day The investment into such an in depth logisticssystem is imperative in order to take advantage of the data-rich decision processes of the company