SUNIL CHOPRA
Teaching Note: Seven-Eleven Japan Co.
The goal of this case is to illustrate how a firm can be successful by structuring its supply chain to
support its supply chain strategy. Once Seven-Eleven Japan decided to provide responsiveness by
rapid replenishment, it then structured its facilities, inventory, information, and distribution to support
this choice. The case also brings up the question of whether the same approach can work in the United
States, especially given the greater distances and lower store density.
Questions
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?
As responsiveness increases, the convenience store chain is exposed to greater uncertainty. A
convenience store chain can improve responsiveness to this uncertainty using one of the following
strategies, especially for fresh and fast foods:
2. Seven–Eleven‘s supply chain strategy in Japan can be described as attempting to micro –
match supply and demand using rapid replenishment. What are some risks associated with
this choice?
3. What has Seven–Eleven done in its choice of facility location, inventory mana gement,
transportation, and information infrastructure to develop capabilities that support its supply
chain strategy in Japan?
All choices made by Seven-Eleven are structured to lower its transportation and receiving costs.
For example, its area dominance strategy of opening at least 50–60 stores in an area helps with
4. Seven–Eleven does not allow direct store delivery in Japan, with a ll products flowing
through its distribution center. What benefit does Seven –Eleven derive from this policy?
When is direct store delivery more appropriate?
Direct store delivery (DSD) would lower the utilization of the outbound trucks from the Seven–
5. What do you think about the 7 dream concept for Seven –Eleven Japan? From a supply
chain perspective is it likely to be more successful in Japan or the United States? Why?
7 dream makes sense given that Japanese customers are happy to receive their shipments at the
local convenience store. From a logistics perspective, online deliveries can piggy back on Seven–
Eleven’s existing distribution network in Japan. Deliveries from the online supplier can be
6. Seven–Eleven is attempting to duplicate their successful Japanese supply chain structure
in the United States with the introduction of CDCS. What are the pros and cons of th is
approach? Keep in mind that stores are also replenished by wholesalers and DSD by
manufacturers .
The difficulty of duplicating the Japan supply chain structure in the United States follows
primarily from the much lower density of U.S. Seven-Eleven stores. This is compounded by the
7. The United States has food service distribu tors like McLane that also replenish
convenience stores. What are the pros and cons to having a distributor replenish
convenience stores versus a company like Seven –Eleven managing its own distribution
function?
One can contend that a distributor brings much more value to the table in the United States
relative to Japan. Given the lower density of stores, a distributor is able to aggregate deliveries across