known as the supply chain ability to respond within a proper timeframe towards
customer demand or changes in the market. There are several ways for
convenience store in order to show their responsiveness to customers as done by
Seven Eleven Japan as follow:
the number of distribution center, vendor, or stores in potential location in
order to expand the market and be able to fulfill more customer needs. Moreover,
more facilities would likely reduce the distance of customers into the stores
which will increase the visiting frequency of customers into the stores. High
cost investment and maintenance cost to build and maintain all the stores were
the risk for this decision.
rapid replenishment (delivery capacity) to meet more customer demands. Despite
the high cost for transport with larger capacity, there are others additional
cost for loading and docking. Another risk is the probability of uncertainty
will increase if the delivery products in huge capacity is kind of food or beverages
which need special treatment and easily going stale.
the number of inventory at desired Stock Keeping Unit so the products status
will always available. Even though this method is quite helpful to maintain the
products stocks but the inventory cost is quite high and it needs extra space
of warehouse which may also have a bad impact if the products were kept is a
seasonal products or customer will only seek these product on specific
integrated information system between stakeholders (vendor, distribution
center, store manager, customer) to make the information flow process become
faster and more efficient. Uncertainty will possibly occur if there is any
technical problem on the network or the user which lead to incompatibility of
demand and supplies.
supply and demand strategy using rapid replenishment that Seven Eleven Japan
attempt were done within a timeframe with the number of delivery that has been
set by default based on forecasting analysis conducted previously. The risk
occurs if there is a forecasting error and communication error which makes
demand and supplies are not matched. These problems will make inventory
excesses or shortages occur. For instance, if suddenly there is high demand occur
from a group of tourists on holiday season which possible to reduce the stores
stock drastically while the replenishment schedule is still need to wait at the
time, which result to the products availability for other customer.
problem arises if the shipping time were delayed which cause massive complaints
from customers as the effect of unsatisfied service and also the next shipping
schedule will be chaos.
Seven Eleven Japan choices will be
explained briefly below:
policy with market dominance strategy where Seven Eleven stores
around a cluster consist of 70 to 80 different stores supported by a
distribution center and able to fulfill huge number of customer surrounding.
The stores location that close to each other will make the shipping facility
(such as truck) easier to deliver each stores order.
Eleven has a rapid replenishment cycle since it is controlled by customers
demand or order. There are only few products stored in the warehouse. The rest
of products are foods and beverages which needs to be delivered immediately so
that the products will still fresh until customers receive the products. There
are also seasonal products that needs to deliver directly by suppliers into
Seven Eleven stores through distributor because if it stored in the warehouse
for too long, it will pass the specific season which makes the product will not
be salable anymore.
provides the products after receiving order from integrated store information
system. After going through manufacturing process, the products will be
delivered to distribution center based on the daily, weekly, or monthly
schedule that has been set by Seven Eleven manager in order to achieve
effective responsiveness with minimum cost.
Eleven use the Total Information System which connects the head of company,
stores, vendors, distribution center, and customers so the supply chain will be
more responsive and effective. This information system matches the supply and
demand data in order to achieve high responsiveness and lower production and
Distribution center has several important roles for
Seven Eleven such as reduce the store manager burden to check, count, and
manage the products transfer from factory to the store, especially when the
company deliver some small order packages in a rapid cycle that will cause
trouble for the manager if it is delivered for a couple of times. In this
situation, distribution center has a role to collect the product packages and
deliver the products to Seven Eleven retail stores so the manager will only
focus on maintaining and increasing services for customers. Moreover, the
manager is able to handover the Seven Eleven system to distribution center for
them to run the system based on Seven Eleven desired standard.
Direct Store Delivery more appropriate when the
delivery actually using the maximum capacity of shipping truck from the
manufacturing into the retail store so the transportation cost will be
minimized. It also able to be done if the products that were delivered is
guaranteed matched according to the number, standard, and safety system that
owned by Seven Eleven itself.
Using Seven-Eleven as a place of inventory of goods as
well as place of goods by customers as a drop off in the nearest area on online
delivery system is the concept that 7dream applies. This concept led to the
great success of 7dream because from the results of surveys conducted on
customers that collected from the case study, they prefer to take the goods
they buy in the Seven-Eleven area nearby and shipped with this way rather than
delivered directly to the home address. It also can push the cost delivery package with lower than it does,
yet there are also some consideration with this delivering system where the
possibility of customers not picking up the goods as soon as possible which is
lead to the using up the storage space in there and it needs necessity pretty
much place for the package that are not offset by Seven Eleven store capacity. In
terms of supply chain perspective, Japan is slightly more successful than in
Since Japan apply a
system or concept that use delivery network and frequency of Seven Eleven
visitors and it ensure that the bundles are not involving significant store
rack space for quite a while and frequent customer visits to Seven Eleven keep
the goods on the inventory quickly taken. Use of this existing network in
addition to reducing cost is also a point of 7dream success in Japan. This is
probably not happened in the United States of America due to the cultural differences
and traditions of society.
Implementation of Japan’s Seven-Eleven supply
chain structure to Seven Eleven America can be done but will not be exactly the
same as its supply chain structure because the supply chain structure of USA can
never be precise as Japan. There will be many handicaps encountered when
implementing the Japanese Seven-Eleven supply chain in America due to
differences in organizational culture in both regions and most likely supply
chain will not run normally. Other
than that, there is additionally a distinction amongst Japanese and American
tradition and Seven-Eleven is not just a company that dominates the American
region like Japan but there are still companies like Seven-Eleven which likewise
rule in the American zone. This is what affects the level of supply chain
success depends on many factors.
Yet, the implementation of Japan’s Seven-Eleven
system in America is also possible despite of the transportation level in
America and Japan is different but it has proven to be a real success in Japan.
Hybrid system can be done to adjust the system, which has been done in some
areas in America.
Pros: The advantage of having an outsourced distributor that replenish
the stores is at the cost. It decreased costs required for material or item
transportation and representative financing of labor cost for the distribution
system. This also greatly affects incredibly influences the plan of the
manufactured framework, since it enables the organization to quicken the stream
of items, operations, funds and the absence of any third party intervention.
Cons: The most troublesome first thing from
outsourced distributors is the loss of full control of the flow of products,
operations, and assets. And furthermore the troublesome of integration of
systems that have been built before by the company.