Answer # 3

Following steps were taken by 7-Eleven to develop capabilities that supports its supply chain in Japan.

Facility location: 7-eleven had a single distribution center that supported its stores. These stores were
placed in clusters. These clusters gave 7-eleven Japan a high density market presence and allowed it to
operate an efficient distribution system.

Inventory management and Transportation: Food items at the 7-Eleven were classified into 4 distinct
categories.

1. Chilled temperature items that included sandwiches and deli products

2. Warm temperature items such as bread
3. Frozen items including ice-creams
4. Room temperature such as canned foods

This categorization helped in assisting transportation. 7-Eleven also had dedicated manufacturing plants
to produce fast food. They manage inventory through their graphic order terminal and receive inventory
using the scanner terminal. 7-Elevens POS register was used to track inventory at a detailed level. A
“combined delivery system” is used by 7-Eleven in which single temperature controlled truck deliveries
take place. In these types of deliveries one category of food is delivered to multiple stores. Scanner
terminals were also introduces to reduce delivery time.

Information:

The ISDN (integrated services digital network) linked more than 5000 stores. It consists of four major
components:

1. Graphic order terminal:- Not only track and analyze POS data and place orders with vendors, but
is also used to determine when to convert shelf space from slow moving to fast moving items
2. Scanner terminal: - improves the delivery processes efficiency.
3. Store computer:- Used to keep track of inventory, sales, orders etc.
4. POS register:- keeps information on customer sales and demographic information.

Answer # 4:-

Benefits derived from this policy are as follows

1. Responsiveness
2. Coordination
3. Flexibility
4. Reduction in the number of vehicles required for daily delivery service to each store
5. Reduction in delivery costs as each truck made deliveries to multiple retail stores and none of
the distribution centers carried any inventory; they merely transferred inventory from supplier
trucks to 7-Eleven distribution trucks.