Seven-Eleven does not allow direct store
delivery in Japan but has all products flow through its distribution center.
What benefit does Seven-Eleven derive from this policy? When is direct store
delivery more appropriate? The Seven
Eleven store is the convenience store that responsive and focus of what costumer
wants and needs. They know the segmentation of the product and knows which
product that costumer wants and what time they want to buy the product. Seven eleven
has a very efficient system. That’s why they know costumer needs. (Raiser, 2014) Seven
Eleven are not looking to open the outlet everywhere but the location of Seven
Eleven store is based on the demand of the costumer. For example, in the A
region, most of costumer buy snacks. So, in the A region they will sell more snacks.
They optimized the space where the product located. Each store has different stock.
It depends on local costumer demand. Seven
Eleven has many store locations. So, receiving product from a distribution center
is very beneficial. Transportation cost will be increase if Seven Eleven using
Direct Store Delivery. It increased because the store will receive multiple
trucks from various supplier and most of them will be deliver with not full
trucks loads. Seven Eleven using Distribution Center because it will receive the
order from the supplier with similar category products in the same truck and then
it will be send to the stores. It reduced the transportation cost. Seven Eleven
does not allow direct store delivery in Japan but has all product flow through
distribution center. Distribution Center does not have to keep in a huge amount
of goods that they don’t want to sell. For some years they know what is sold in
which store, so it’s easy for them to know which items each store needs. Direct
Store Delivery will be more appropriate if the stores want the product really
quickly. Because the costumer doesn’t need to wait too much when they really
want to buy something. It also will be more appropriate when the store sell the
product in the short period of Time. Seven Eleven is known as the store that
sell and have almost everything that costumer need. So, it will be better not
to let the shelves empty. The trade reputation of the store will be bad if people
can see empty space in the store. 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? Implementation of Seven Eleven Japan’s
supply chain structure to Seven eleven America can be done but will not exactly
match its supply chain structure. There will be many obstacles faced when
implementing the system of Seven Eleven Japan supply chain in America. One of
them is due to differences in organizational culture in both regions and most
likely supply chain will not run normally Seven Elven is not just a company
that dominates in the region of America like Seven Eleven in Japan but there
are still another companies like Seven Eleven which also dominate in the
American region. This is what affects the level of supply chain success depends
on many factors The 7dream concept was conceptualized by
Seven Eleven Japan to exploit the existing distribution and high store density
capabilities of Seven Eleven Japan. A recent survey by Yahoo Japan said that
92% of the costumers preferred to pick up their online purchases at the local
convenience store (Wolfraat, 2005). From a supply chain perspective, it is
more likely successful in Japan. Below is the following reasons:1.
High density store location in particular geography. The
costumer will be enable having their items and delivered to their home at an
easily accessible store. 2.
The location of Seven Eleven Japan is in Urban area
which are have a high population density. The costumer would be more
enthusiastic about online purchase hence the concept more likely to the work in
case of Japan. In America, it can be seen that Walmart is mostly located in
suburbs. There store will be generally have larger format compared to the Japanese
Most of Seven Eleven Store in United State is using
Direct Distribution Center. therefor a single costumer order fulfillment will
have to be ensured and packed by the store retailer. On the other hand, the material
for Seven Eleven Japan is coming through the Distribution Center therefor the
retailer is not involved in the packing and only has to handover the materials.4.
Integration with IT enable the Seven Eleven Japan to
easily track the order. So, from the
supply chain perspective, is it likely ore successful the Seven Eleven in Japan
compared to the Seven Eleven in America. Because Seven Eleven is not the one
and only company that dominates in America Regions but there is also another
company like Walmart. 6.
Seven-Eleven is attempting to duplicate the
supply chain structure that has succeeded in Japan in the United States with
the introduction of CDCs. What are the pros and cons of this approach? Keep in
mind that stores are also replenished by wholesalers and DSD by manufacturers. Seven Eleven has
introduced the Combined Distribution Center for the fresh food items. Fresh
food items have to be delivered frequently to the store at least once a day but
the volume do not justify Direct Selling Delivery by the manufacturers. Therefore,
Seven Eleven Japan has introduced the concept of Combined Distribution Center (Wolfraat,
The pros of
Combined Distribution Center:1.
Combined Distribution Center (CDC) provides Seven
Eleven Japan to deliver fresh food every day, the volume of the Fresh food
delivery might justify Direct Selling Distribution (DSD).The cons of
Combined Distribution Center: 1.
There are only 23 Combined Distribution supporting around
5000 stores in the entire North America. This might be increased the transportation
Seven Eleven Japan have to make huge investment in the
CDC for the fresh food than forms less than 5% of the total sales. 3.
Seven Eleven have to make huge investment in Combine
Distribution Center Infrastructure for the fresh food segment.
References Raiser, C. (2014). 7-Eleven and Exel Deliver Fresh
Food Daily. Logistic View Point, 3. Wolfraat, M. (2005). Direct Store Delivery Versus
Centralized Distribution. Leadership in Global Supply Chain and Logistics