7-Eleven Japan Case

7-Eleven Japan

A) A convenience store chain like 7-Eleven can be responsive to customers by stocking their inventory at each independent store so that they can respond to demand on site. There would be an extra need for space but this is a factor I assume they would be willing to take into account. When I go to a 7-Eleven I notice how they have many hot-cooked meals ready to go and various items that are cooked or prepared “on-site” thus I would see it making sense for them to have they stores employees prepare these foods rather than have the ready-made meals delivered to them. This would decrease costs and waiting-time. Something else they could do is add in-store payment where customers can pay their bills in-store due to the more convenient store hours than banks or other institutions. Adding ATM’s can be very popular with customers as well, allowing them to withdraw money at any time. As the case suggests other services that can be offered to be more responsive could be photocopying, ticket sales and being a pick-up location for parcel delivery companies. The store could also add online-shopping services so as to make the customers able to order within the comfort of their homes. Using the POS information system allows the store to immediately identify where customer demand is and thus allowing them to immediately order new supplies.

B) Some challenges and risks associated with this choice is that there would be very frequent outbound deliveries, which would be considered a great challenge. These deliveries would cost more money. The transportation costs would be very high. There would also be a significant risk of having obsolete inventory. Another risks would be the fact that many food trends are unpredictable thus causing the stores to speculate and may lead to higher inventory amounts. Another challenge is that since there would be significant speculation the stores would have many goods to order thus leading to higher costs in general and a possible loss in profits.

C) In regards to facility location in Japan the company has a total of 290 manufacturing plants and 293 distribution centers allowing for rapid delivery to each store. These D.C.’s are strategically located so as to lower costs and be more responsive. The company has a strategy of opening numerous stores in a certain geographical area, which helps to lower the costs of re-stocking but also helps to drive up sales and creates entry barriers for competitors leading to a monopoly of 7-Eleven in those areas. The company requires all suppliers to deliver to a D.C. where products are sorted by temperature thus reducing outbound costs. When it comes to inventory management 7-Eleven offers three time-a-day deliveries. The store manager

used a graphic order terminal to place an order. When a store placed an order, it was immediately transmitted

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