1. A convenience store chain attempts to be responsive and provide customers what they need, when they need it, where they need it. What are some different ways that a convenience store supply chain can be responsive? What are some risks in each case?
Convenience store supply chains can be responsive by doing several things right. Strategic locations for stores, rapid replenishment, technology deployment, buying trend research, responsive suppliers, and vertical integration are some key areas convenience stores can focus on.
In Seven-Eleven’s case, they are not trying to fill the entire map with stores. Rather, they seek out additional demand in proximity of where other stores already exist. By clustering their locations together, they can distribute products more efficiently, aiding in rapid replenishment. Having a better understanding of customers buying trends allows each store to stock the appropriate SKU’s. Keeping track of buying ...view middle of the document...
With demand fluctuation, it can be difficult to accurately gauge which products will need to be replenished on a daily basis. Demand can fluctuate daily based on the store’s location or even what types of events are happening nearby. If the store is located near offices for example, that location will likely sell more breakfast and lunch items. If a large group of customers come in and purchase similar items that typically don’t sell as often, the distribution centers may incorrectly factor these purchases into demand for their ordering and stocking of the product. Another risk of micro-matching supply and demand would be the risk of increased transportation and labor costs. Since no inventory is kept at the store locations, extra deliveries may be needed when stores run out of product and raise transportation and labor costs as a result.
5. What do you think about the 7dream concept for Seven-Eleven in Japan? From a supply chain perspective, is it likely to be more successful in Japan or the United States? Why?
7dream allows businesses to ship packages to 7-eleven stores that then serve as a pickup site for customers. Customers in Japan love this service, and 7-11 enjoys the benefit of potential customers walking through their doors. With nearly thirteen thousand stores in Japan, customers are no doubt fairly close to a location. When a package needs to be signed for, this service would be much more convenient then heading down to the shipping company’s distribution center. Suburban customers in the US would find this service to be quite inconvienent. This concept would be more successful in Japan due to 7-11’s existing distribution network there and the frequency of customer visits as compared to the US. The packages will piggy-back on 7-11’s distribution network. The high frequency of customer visits ensures that packages will not be left for long and take up valuable space at a particular 7-11 location. The marginal transportation or opportunity cost to the customer for picking up a package at 7-11 would be a lot smaller than for a customer in the US. This is largely due to the condensed network of store locations as well as higher rates of customer visits.