CHAPTER THREE
Case Questions
1. A convenience store chain attempts to be responsive and provide customers with
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?
A convenience store can be more responsive by doing exactly what Seven-Eleven
Japan is doing; many locations, rapid replenishment, appropriate technology
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?
Micro-matching supply and demand using rapid replenishment can result in
stockouts if a large batch of demand arises. The tour bus phenomenon, where a
3. What has Seven-Eleven done in its choice of facility location, inventory
management, transportation, and information infrastructure to develop capabilities
that support its supply chain strategy in Japan?
Seven-Eleven Japan has chosen to operate a highly responsive operation and has
chosen a supply chain design that supports this strategy. Their facility location
4. Seven-Eleven does not allow direct store delivery in Japan but has all products
flow though its distribution center. What benefit does Seven-Eleven derive from
this policy? When is direct store delivery more appropriate?
The benefit of delivery through its own distribution center is total control of the
system, aggregation of demand and minimal disruption at the retail outlets. If
5. What do you think about the 7 dream 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?
The 7 dream concept allows e-commerce sites to use Seven-Eleven stores as drop-
off and collection points for Japanese e-commerce customers. It has been
extremely successful; a recent survey revealed that 92 percent of the customers of
6. Seven-Eleven is attempting to duplicate the supply chain structure that has
succeeded in Japan into 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.
The supply chain structure for the U.S. market can be close, but it can never be
exactly as it is in Japan, and will probably not operate as smoothly as in Japan.
7. The United States has food service distributors 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?
The advantage of someone else replenishing stores is primarily cost (if they can
aggregate deliveries to a greater extent); less transportation, material handling,
and labor costs for your own system. Depending on how supply and reordering