02 - 7 eleven Japan - ISC

Background on 7 eleven.

• 83000 stores
  • 21000 japan

Founded in the 70s

Opened its first store in Tokyo.

They outsell McDonalds and rank second in ??? sales.

Key advantages

• centralized distribution and cost effective deliveries
• ???

Logistics

Store manager, places order through a graphic order terminal.

It takes 2-3 h for the order to reach vendor.

Order is delivered to the store and the store manager scans everything and the information goes back to the central company. Also sale information is sent back.

Order are based on real time data and on local needs. Orders can be adjusted everyday.

Logistics and delivery

Daily life of a driver

• Check bills
• sort systems at SDC
• Delivery is planned to which rout at what time
• Following the timetable
• All delivery activities are logged

Pros

• data driven decision making
• automated and streamlined ordering process
• Dynamic per day/per store orders to local needs
• ???

Cons

• Unpredictable traffic
• ????
• ???

Pros and Cons of 7-eleven Japan

Pros:

• Strong supplier relationships
  • Stady product supply at a good price
• Efficient product development collaboration
  • Customer demand alignment through supplier innovation

Cons:

• Pressure on suppliers
  • Supplkier strain and potential quality issues
• Limited sourcing flexibility

Production

Pros: Do deliveries multiple times a day.

Cons: High risk of wastes

warehousing, transport and logistics

PROS:

• Efficient logistic network
• Temperature based joint delivery systems

CONS:

• Complex Delivery management
• Limited flexibility for urgent needs

Demand and supply planning

PROS:

• Real time POS data
• Fast product turnover

CONS:

• Dependence on Historical Data

Customer Service

PROS:

• High focus on freshness and costumer satisfaction
• Localized merchandising

CONS:

• Rapid product changes

Broad product range

Fresh is good!!!

TOTAL SUPPLY CHAIN OVERSIGHT
7 eleven does so well because they have strong relationships with suippliers.

Cold chain shipment

temperature is control all the way.

Frequent delivery

Coffee is changed every single hour.

Tanpin Kanri

management by single product.

The managers look also at the weather to predict what will be sold.

Information system

Helps maximize profits

they have little shelf space.

Multilevel review

• Temporal
  • hour
  • day
  • week
• Spatial
  • Store
  • zone

  ---

02 - 7 eleven Japan - ISC

Refine decision making

Big Data + (local + non local factors) = accurate predictions

Success in the US

7 eleven has success in japan but not in the US.

In the US they look like gas station stores.

This is partially because in the US the competition of convenience store is bigger.

In Japan people rely on very rapid urban lifestyle.

There's is a big layout difference between US and Japan.

In the US they are reliant on cars. This makes logistic and transportation more expensive than in Japan.

Technology and efficiency:

How to make it a true success in the USA

3 areas strategy:

• First
  • Perception
  • Enhance assortment
  • Change client perception towards high quality fresh food at a good price
  • Technology-driven customer engagement
  • Sustainability initiatives
• Supply chain
  • Decentralized distribution model
  • Dense urban areas
  • New partnerships with fresh food suppliers
  • Enhance information systems
  • Online convenience stores
• Relationships
  • Strengthen the relations across SE worldwide groups

Americans go to 7/11 to buy packaged food. They should instead enhance the fresh food concept.