Supply Chain Drivers

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Sourcing:

a) Use of various suppliers: They generally depended on number of suppliers for a single item like Milk or Sandwiches and were placed in a common thermal room for achieving uniformity of quality and taste.

b) Outsourcing: The transportation was outsourced to Transfleet Ltd., a company set up by Mitsui & Co.

Pricing:

a) Competitive: Competitive strategy of Seven Eleven Japan was to provide high-availability of a variety of reasonable quality products at reasonable price. Convenience and ease of shopping and availing various other services at one place attracted customers.

Facility

- Facilities were at 2 levels

- Distribution Centres (DCs)

- Stores

- DCs

- less in number

- held no inventory,

- served stores in its cluster

- Increased Efficiency as opposed to Responsiveness

- Stores

- More in number

- kept inventory on shelf

- Located in abundance and dominated the market

- Were more responsive than efficient

Inventory

- @ DC

- No inventory

- Highly efficient

- Poor at responsiveness

- @ Stores

- Kept Daily Stocks

- Low Inventory

- Were efficient but not very responsive

Transportation

- Transportation was at two levels

- Vendor to DC (Vendor delivered)

- DC to Store (Seven-Eleven delivered)

- Transportation Network Design

- Each truck would be stocked at the DC

- One truck would deliver supplies to more than one store.

- Mode of transportation

- Road (Vans &Trucks were used)

- Rapid replenishment cycles

- High Frequency

- Provided High responsiveness as opposed to efficiency

Information

- Information System Components

- Graphical Order Terminal (GOT) @ Stores

- Scanner Terminals (ST) for inventory checking

- Store computer

- Processed information from GOT , ST & POS

- Was connected to the network

- Tracked inventory levels, placed orders, maintained store equipment etc.

- POS register

- Information about sale, customer details like age, sex, item of sale etc.

- Data was relayed to Suppliers, Distribution Centres and the Headquarters automatically.

- Increased both efficiency and responsiveness

Sourcing

- Outsourced transportation

- From DC to Stores to Transfleet Ltd.

- Risk of Fuel Price Fluctuation, Fleet Maintenance and Cost of Fleet staff was transferred.

- The company increased profits and reduced risk.

Pricing

- Seven-Eleven offered reasonably priced products.

- Their market dominance allowed ease of access to the customers.

- Both these factors