This case study discusses the meteorological rise of a convenience store chain, seven-eleven Japan in the Japanese retail store business. We will analyze the factors responsible for the phenomenal success of the company in the retail business, with a supply chain perspective. The main aim of this analysis is to identify the supply chain strategy of the company and underlying combination of its performance drivers which have led to the best balance of efficiency/responsiveness trade-off for the company.
About Company:
Established in 1973, Seven-Eleven Japan set up its first store in Koto-ku, Tokyo, in may 1974. In 2004 it was owned by the Ito-yokado group, which also managed a chain of super markets in japan and owned a majority share in southland, the company managing seven-eleven in the united states.Seven-Eleven japan realized a phenomenal growth between the years of 1985 to 2003. During this period, the number of stores increased from 2299 to 10303. Seven Eleven Japan represented Japan's largest retailer in terms of operating income and number of stores. In 2004, Seven Eleven accounted for 60 percent of the total net increase in the number of stores among the top 10 convenience store chains in japan . This growth had been very carefully planned , exploiting the core strengths that seven-eleven japan had developed in the areas of information systems and distribution systems.
...of the following strategies, especially for fresh and fast foods:
Local Capacity. The convenience store chain can provide local cooking capacity at the stores and assemble foods almost on demand. Inventory would be stored as raw material. This is seen at the U.S. fast-food restaurant franchise Subway where dinner and lunch sandwiches are assembled on demand. The main risk with this approach is that capacity is decentralized, leading to poorer utilization.
Local Inventory. Another approach is to have all inventory available at the store at all times. This allows for the...