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?
The following strategies can improve responsiveness to the future uncertainty, especially fast consumption goods in seven-eleven stores:
Nearby inventory: Since 7-11 stores have many locations in Japan, to keep a safe storage near the store is important. It is necessary for seven-eleven convenient stores to store a certain and safe amount of goods, like processed foods, fast foods, daily goods which can allow for the centralization of cooking capacity.
Risk: The main risk of this approach is obviously that this way needs an extra place to store goods which will increase the storage expense. The inventory can be wasted because of the uncertainty of the demand. In high level of inventory there is very low margin of error in forecasting. So it will increase wasted and also increase the supply chain cost.
Rapid responsiveness: Convenient stores are different from those large supermarkets who own a large amount of inventories. Suppliers in convenient stores need to replenish products rapidly in case some of necessities are sold off. So the approach is to set up rapid replenishment and supply the stores with what they need when they need it.
Risk: When the products are quick replenished in different location, it increase the transportation cost and capacity also increase the holding cost. 7-11 offered a delivery system named combined delivery system. This system reduced the delivery time and the transportation cost. But in this system, each delivery truck made deliveries to multiple retail stores. So if one delivery truck has something wrong it will affect many stores.
Extensive use of information system: This can help predict the demands with great accuracy and also help the store decrease the associated...