Q1

 Real time information flow between suppliers, distributors and store

Strong supplier network
Risk -Server breakdown or hacking
 Good relationship maintenance with suppliers and distributors
Risk--Over-dependency on one supplier
o Risk due to natural calamities increase if all suppliers lie in
close proximity
 Analysis of day to day data for each store and each SKU will enable in
forecasting & reduction of replenishment time
Risk: Data congestion due to large volume of data from 3000 SKU ×
10000 stores
 Cross-docking is one of the ways to be responsive
Risk:Vehicle breakdown and natural calamity

 Inventory availability in stores

 Risks: Generates stock and waste products.

 Facilitate customers by location and increase in capacity

 Risk-Cannibalism among the stores.

 Rapid Replenishment
 Risk-Increase transport, replenishment and reception cost, inventory
cost, facility cost, demand uncertainty.

 Response to wide range of quantity demanded

 Meet short Lead times

  Handle a large variety of products

 Build highly innovative products

 Meet very high service level

 Effective information system
 Many locations

Q2-
Over-dependency on Information Systems
Any calamity on supplier end would lead to stock out situation in Seven-
Eleven because of absence of inventory in supply chain
No warehous
Market Dominance strategy
Clustering
Items classified by temperature
Information system
Graphic order terminal
Scanner terminal
Store Computer
POS Register

Distribution System-Monitor and Forecast the sale of items.

Benefits:
  Improve ordering efficiency
 Creates linkage between suppliers and Retailers.
 Decrease the number of Delivery vehicles.
Drawbacks
 Direct store delivery.
 Needs large capacity, storage space, Infrastructure, labor etc.
 Cost Impact
Q3-
Facilities were at 2 levels –
1. DistributionCentres (DCs) –
2. Stores

DCs
– less in number
– held no inventory,
– served stores in its cluster
– Increased Efficiency as opposed to Responsiveness
• Stores
– More in number
– kept inventory on shelf
– Located in abundance and dominated the market
– Were more responsive than efficient
Inventory
• @ DC – No inventory – Highly efficient – Poor at responsiveness
• @ Stores – Kept Daily Stocks – Low Inventory – Were efficient but not
very responsive
Transportation
• Transportation was at two levels – Vendor to DC (Vendor delivered) – DC
to Store (Seven-Eleven delivered)
• Transportation Network Design – Each truck would be stocked at the DC
– One truck would deliver supplies to more than one store.
• Mode of transportation – Road (Vans &Trucks were used)
• Rapid replenishment cycles
• High Frequency
• Provided High responsiveness as opposed to efficiency
Information
• Information System Components – Graphical Order Terminal (GOT) @
Stores – Scanner Terminals (ST) for inventory checking – Store computer
• Processed information from GOT , ST & POS
• Was connected to the network
• Tracked inventory levels, placed orders, maintained store equipment etc.
–
POS register
• Information about sale, customer details like age, sex, item of sale etc.
– Data was relayed to Suppliers, Distribution Centres and the
Headquarters automatically.
– Increased both efficiency and responsiveness

Sourcing
• Outsourced transportation – From DC to Stores to Transfleet Ltd.
• Risk of Fuel Price Fluctuation, Fleet Maintenance and Cost of Fleet staff
was transferred.
• The company increased profits and reduced risk.
Pricing
• Seven-Eleven offered reasonably priced products.
• Their market dominance allowed ease of access to the customers.
• Both these factors led to stable demand
• Thus, such pricing decision increased the efficiency of the supply chain.

Q4-
Benefits of DCs
 Reduces complexity at store level
 Organizes Store demand at DC
 Reduces complexity and costs for Vendors to directly deliver at the
stores
 Proper product assortment as per required temperature at DC thus
reducing perishability
 Reduction in number of vehicle required for daily delivery at each
store Reduction in delivery costs
 Rapid delivery of variety of fresh foods thus making the chain
responsive Rapid and reliable delivery to distribution trucks through
dedicated DC.
• When Direct Store Delivery?
 Demand from retailer is high enough to require FTL
 When lead time is critical
 Manufacturers and retailers in close proximity
 Variety of products is less
 Order size is more
 Delivery Destinations are few

Q5- Seven dream concept

 1. E-commerce platform
2. Utilize existing distribution network
3. Increased Responsiveness
4. Economical
5. High Density Network Distribution
Successful in Japan or US
Number of store in Japan = 10,615
 Number of stores in US = 5,798
 More convenient in Japan to pick delivery from any store because
of number of stores
 Transportation cost will increase in US as there is different
distribution structure and consumer prefer home delivery
 Store density area ratio is higher in Japan than in US, thus making it
inconvenient for US customers to pick up from stores
Q6
CDC
PROS:
 Reduced cost
 Improved aggregation
 Focus on Important tasks.
  Increase in responsiveness
 Increase in variety of fresh products
 Reduction in stock out
 Increase in distribution network and support to stores
 Reduction in lead time for Fresh products

CONS:
 Outsourcing cost
 Lack of control
 Delivery Fluctuations
 Product assortment will occur at store thus increase in time Increase
in Labour cost
 High coordination is required between DSD, Wholesalers and CDC
 Increase in cost for CD
Q7-
Self Distribution Centre:
PROS:
 Backward integration
 Scope for future expansion
 Control over SC
 Reduction in replenishment time
 Reduction in dependency

Cons
 Extra effort to build supplier network
 MIS maintenance
 High risk
Outsource
PROS:
  No effort to build supplier network
 No data maintenance
 Low cost
 Risk sharing
CONS:
 Increase in dependency
 No control over supply chain
 Increase in lead time
 Forward integration chances by outsourcing part
Recommendation:
 Faster Replenishment method
 Improve supply chain integration
 DSD is not always the best strategy
 7dream concept works better in Japan than in US
 Only employ CDC’S if store density is high enough
 Improve monitoring for outsourcing operations