Seven-Eleven Japan: Case Analysis

Seven-Eleven Japan: Case Analysis

How would you categorize SEJ’s supply chain?

            SEJ has a centralized distribution system. SEJ requires that manufacturers and wholesalers who distribute a particular product or related products delivered the items to a supplier’s distribution center (SDC). SEJ then utilized trucks in delivering the items in the same product category to appropriate stores (Stanford, 2006). SEJ later implemented a temperature-based joint delivery system that required SDCs to handle products groups in a specific temperature zone. SEJ outsourced transportation service to third-party companies. Trucks were the main mode of transportation but later diversified to ships, helicopters, and motorcycles. Transportation is meticulously scheduled to ensure that delivery was done on time and stores spend very little time at each destination.

Key SCM decisions that explain SEJ’s success

            Several decisions have helped SEJ to increase the effectiveness of the supply chain and hence build a more successful company. The first decision involved assigning service delivery centers where manufacturers and wholesalers delivered items for later transportation to stores. The products in one category where then transported by one truck to various stores. This strategy helped to cut costs by significantly reducing the number of deliveries to stores (Stanford, 2006). The second decision was creating a timetable for deliveries. The timetable was followed ardently with a very small margin of error allowed.  Drivers arrived at the store on time and left after a very short interval. This timetable ensured that products were delivered on time and that the company optimized the available time. Another decision that helped SEJ was outsourcing transportation to third parties. This decision helped the company to reduce transportation cost, eliminate risks and increase efficiency by hiring companies that specialized in shipping.

Why SEJ established the policy of no direct store delivery

            SEJ established a policy against direct store delivery (DSD) in order to increase the efficiency of the delivery system. Eliminating DSD allowed the company to sort products according to type and temperature before delivering them to stores (Stanford, 2006). SEJ utilized a more centralized system involving service distribution centers in order to reduce the number of trips that trucks made to each store thereby reducing costs. Eliminating a DSD system enabled the company to reduce the number of suppliers for a particular range of products. The system was also abolished in order to enable SEJ to have a more optimized inventory in the stores by distributing products according to temperature zones (MWPVL, 2015) as a complement of the convenience store business in Japan

             7Dream is an effective complement of the convenient store business in Japan. 7Dream compliments the business by helping to reduce the inventory available in the stores because products are only made available when customers order and pay for them. 7Dream helps companies to tap into the expanding online shopping network (Stanford, 2006). 7Dream would help convenience stores to reduce transportation costs by aggregating customer orders with other product categories. 7Dream would be cost-effective because it utilized the already existing distribution networks of the convenience stores. 7Dream would also help SEJ to liaise with several companies to offer a wider range of products.

Would SEJ SCM approaches and policies work in Seven-Eleven USA?

            Although the two counties have different business cultures, the SCM practices of SEJ would be ineffective in the US. The convenience stores in the US employ direct        store deliveries in their operations unlike SEJ which used a more centralized system. The SCM approaches would not work because US stores try to reduce operating costs by eliminating the need for distribution centers. In the US, suppliers try to be in close proximity to convenience stores unlike in Japan therefore most of the policies would be ineffective.

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