International School of Management Studies

Pune – Maharashtra - India

STRATEGIC SUPPLY CHAIN MANAGEMENT AND LOGISTICS

LEARNING OUTCOME 1-5

Mr. ABHIMANYU BALKRISHNA KADAM

(MBA INTERNATIONAL)

Statement of Authenticity

I certify that the work submitted in regard to this assignment is my own and wherever the works of others have been
used to support my work, the credit has been duly acknowledged.

Student Email: abhimanyu.isms@gmail.com Date: 25/1/2020

 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

TABLE OF CONTENTS

Serial No Particulars Page no

1 Executive Summary 3

2 Task 1 4

3 Task 2 6

4 Task 3 7

5 Task 4 8

6 Task 5 9

7 Task 6 10

8 Conclusion 11

9 Bibliography 12

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Executive summary

Supply chain is the management of the flow of products and services and consists of all strategies that transform raw
substances into very last products. It includes the energetic streamlining of a business's supply-side activities to maximize
customer value and benefit with competitive advantage within the marketplace. Information is one amongst the
important drivers of supply chain. Through the sleek flow of knowledge company can track its sales and inventory that
helps to predict demand within the market supported the demand predicted by the corporate, it can use just in time (JIT)
method to accumulate raw materials and deliver finished product to the customer.
This assignment is about an enterprise named Seven-Eleven Japan which was established in 1973 by Masatoshi Ito.
Seven-Eleven may be a shop which has approximately 52,175 shops everywhere the globe and its core energy has been
its statistics device and also the channel which enabled them to grow to be extra responsive.
In this assignment, distinct ways wherein a shop chain will be responsive has been discussed. This venture also explains
the way to deliver effectively and meet the demand by using speedy replenishment. In following assignment different
distribution systems that were adopted by Seven Eleven to make sure its growth in Japan has been discussed.
Also, different distribution strategy that was implemented by Seven-Eleven in US has been discussed together with the
pros and cons of the Combined Distribution Centers that were introduced by the corporate to draw in the market of us.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 1

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.C 1.1, A.C 1.2, A.C 1.3)

In today’s world convenience store is more important in day to day lives of people. In today’s busy lives retailers have
made it easy and more convenient for customer in shopping. As the supply plays an important role to meet their needs.
The supply chain makes it easier for the manufacture to deliver the product to the customer in the right location, at right
time and to right person. Due to the fact that managers realize that bringing goods to customers quicker than the
opposition would boost the competitive position of a company, supply chain plays a vital role in supplying the items to
patron. To remain successful, company needs to search for new strategies to major supply chain management problems
such as chain management implementation, load preparation and group design for distribution. Companies have to face
industry problems that affect supply chain management like outsourcing. When the organization wishes to know what
their client needs the shop supply chain would helpful. The shops helped the consumer find the types of items they would
like to purchase. They pay special attention to customer demand and their needs because each client is very important to
them. Inventory management can be a complex process particularly for large organization but the fundamentals are a
similar given the duration or size of the organization. In this process items in the form of raw material or additives are
carried into the receiving vicinity of a warehouse and placed in inventory areas. Inventory allows the business to grow
further within the industry and make it smooth with the aid of IT. They don’t supply the items directly to the customer
they move it to the warehouse and then they carry the carry the goods to the retail stores. Through dealer they handle
retail shops and they don’t hold huge material in the business area. Business makes a distinct method to offer the goods
to the seller without delay so that the customer will not have to look forward to longer period of time. Therefore
convenience stores uses offer quick and effective chain management to keep the goods at the right time and place.

Supply chain management is the aggressive management of supply chain activities is at optimizing customer satisfaction
and achieving the strategic sustainability advantage. The supply chain is linked by physical movements and movements of
information together. Information flows because their long-term plans to be disrupted by a variety of supply chain
partners. Supply chain management focuses primarily on the product advancement advantages and fantastic.
Here are the different ways associated with Seven-Eleven deliver chain management to increase the responsiveness of
the company –
1) To develop a system of market-dominance that is input into a new marketplace centered on cluster of 50 to 60
stores assisted by a distribution center. This strategy has many benefits such as being able to improve delivery
and gadget performance preventing the entry of rivals into the occupied position and so on. This could add to the
distribution chains responsiveness from the short term aspect but it can improve the network benefit as the
management costs.
2) Emphasize regional sales to match neighborhood choices specifically and boom the quality of the most
convenient consumable items available in their shops. This method will fulfill the requirement of sensitivity from
product attitude. However it can be difficult for stores to predict the options exactly can result in unnecessary
confusion and would usually require the assistance of facts systems.
3) Extend services types with the help of which consumers may rejoice in a high provider standard such as various
price forms, invoice payment offering (gas, coverage premiums and telephone) or being a picking up station for
parcel transport. Nonetheless this manner can boom employees burden which will sooner or later bring about
the boom of the labour price.
4) Create an e-commerce employer without time, place and product variety restrictions but it does require a
significant amount of money to develop and maintain the website.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

5) Create an integrated recording system for each store is linked to headquarters, suppliers and distribution centers
to allow shops to better meet demand boom sales and increase stock turnover. The gadget is composed basically
of a graphic order terminal, scanner terminal, a computer shop and a POS register. Sharing knowledge within the
supply chain however could potentially result in tread secrets leaking out. In the meantime turning off records
turn would usually trigger communication problem between various levels.
6) Build a hybrid shipping network that is versatile enough to control shipping schedules based on the purchaser’s
demand and can significantly reduce inventory and shipping expense, allowing quick shipping of fresh food types.
However if anything goes wrong with the transport, inventory, or conversation with third-birthday logistics then
the entire supply chain can introduce high uncertainty threat.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 2
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? (A.C 5.3)

Seven-Eleven makes use of sophisticated knowledge and delivery system to replenish the inventory three times a day to
balance client demands and supplies. Seven-Eleven distribution chain adopted a twice afternoon approach to satisfy the
demand and distribution of regular goods such as bread and other healthy meals. The generation that facilitates quick
transportation for the form of clean and fast food items is by placing an order using the picture order terminal via the
store manager.
The Integrated Holding Information System of the entire Seven-Eleven Japan streamlined its operation by installing every
outlet connected to the headquarters, suppliers and the Seven –Eleven distribution centers. Seven-Eleven addresses the
order very easily with the store manager placing replenishment orders but 12 hours before they are shipped. This
practice makes the chain very receptive to delivery. Nevertheless the option of using speedy replenishment has some
risks involved.
Risk on facilities - Store facilities and hold different items such as frozen food, immediate noodles and seasoning for room
temperature. The danger associated with this carrier is that there may be an alternative in the attitude and action of
consumers that could decrease product sales. Additionally fluctuating demand can be another important factor in this
case. Because all the products are perishable they need to consume them as early as possible, lack of revenue may result
in merchandise. They have chilled temperature store for items such as sandwiches, delicatessen goods and milk and
frozen shop for goods such as ice cream, frozen ingredients and ice cubes. They have got heat temperature for things like
box lunches, rice balls and clean breads.
Risk on system – rapid replenishment wishes to exchange data across the distribution chain which would like the support
of automated record systems. Obviously setting up, running and maintaining the system requires cash and skilled
manpower, so the costs should rise. Besides if the program has a few bugs the secrets of progress will quickly leak.
Risk on management - rapid replenishment involves strong painting skills from a team of workers and adapting for
example vehicles and related team of workers are expected to be on standby at any movement to deliver the product
quickly and reliably to the specified locations. Without a doubt the administration costs, transportation charges and
labour charges will greatly increase.
Risk on out of stock – many factors like natural disasters, avenue congestion and so on, may have an impact on the
replenishing cycle. Without rapid and reasonable care it can cause a shortage of products then harm the corporate image
or even lead to consumer loss.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 3
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? (A.C 3.1, A.C 3.2, A.C
3.3)
In phrases of responsiveness and quality, facilities are a crucial force of overall success in the supply chain. They are the
places the stock is being shipped to or from. When a commodity is organic or store in the best location, businesses may
achieve economies of scale. It can develop efficiency but it comes at the reactivity expense. However, having facilities
close to customer’s boom the variety of facilities needed and decreases productivity as a result.

Facility location – Convenience is a basic goal of Seven-Eleven so they place centers close to customers however they
take various shops locations is based on the fundamental network expansion policy centered on market strategy which is
developed by clustering 50 to 60 stores by a specific distribution center. Such initiatives will help Seven-Eleven set up an
excessive-density target market and then the investment. So Seven-Eleven can control its stores more effectively because
of the consistency and stability of business growth.
Inventory control – the inventory management network of Seven-Eleven is composed of 3 degrees; the distribution or
vendors the middle supply and the shops. The manufacturers or suppliers receive orders from the shops for products and
supply them by distribution. The Seven-Eleven Distribution Center no longer carries any inventory as it serves the
simplest way in cross-docking, moving stock from provider vehicles to delivery vehicles which then serve the stores.
Inventory control at the store level includes using barcode scanners to record inventory collected from the center of the
shipment that is useful in monitoring all items within the stock and directing next orders to replace sold goods. All these
ranges are helpful in the replenishment approach of the chain through the tracking of inventory from manufacturer to
shop and the provision of useful records through the contact interlink to all parties within the chain. This is very
significant in enhancing productivity as the parities work together to facilitate rapid production of goods to meet shop
demand.
Transportation – action of commodity in the supply chain between various stages. Transportation has a major influence
on both responsiveness and performance as do numerous drivers. A company’s method of transportation also impacts
the product and facility position within the supply chain. Seven-Eleven has 4 types of temperature- controlled vehicles
and each truck makes deliveries from a fulfillment center to a few retail stores. This distribution system helps Seven-
Eleven to minimize the number of cars needed for a shop’s regular transport service even if the frequency of delivery of
each item is very high. This lowers the production costs in addition to the inventory keeping rates.
Information – Deeply affects each part of the supply chain and affects each rider. Data can be used as a main driver to
provide greater sensitivity and boost performance. The integrated digital services networks two-way, high-speed, online
communication interface helps Seven-Eleven to easily collect, process and inputs points-of-sales statistics. Records of
sales obtained in each hold are processed and prepared for review on the morning following. So the information system
allows Seven-Eleven stores to better balance demand with supply.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 4
4. Seven-Eleven does not allow direct store delivery in Japan but has all products flow through its distribution center.
What benefit does Seven-Eleven derive from this policy? When is direct store delivery more appropriate? A.C. (2.1, 2.3,
4.1)
Distribution center (DC) is an intermediate layer between manufactures and buyers. Through holding inventory or acting
as a transfer site DCs may help a supply chain achieve economies of scale for inbound transportation to some degree near
the very last destination as each dealer sends a large shipment to the distribution center that carries the commodity for
every place it serves. Its early existence, up to 70 trucks from suppliers visited each store daily, but with the distribution
center system it reduces to 11 trucks. No stock needs to be carried by cross-docking in DCs and merchandise flows
quicker throughout the supply chain. Cross-docking also saves on quality handling as inventory does not want to be
transferred out of storage. This does however require a tremendous degree of communication and synchronization
between incoming and outgoing shipments. Typical Seven-Eleven shops are small but it offers 3000 types of necessities
every day. As we can see it is impossible for shops to have empty spaces for vast stocks meaning that all items have to be
replenished periodically through the distribution center. Benefits of this policy is as follows-

First thinking of Seven-Eleven’s plan to display products in its stores to meet consumers need because they differ by
geographical area or time of day it has to replenish its stores many times a day. Based on the required temperature,
merchandise from specific suppliers is aggregated on trucks to help achieve very regular deliveries at a fair cost.

Second by using the distribution center transport and receiving costs are minimized while ensuring that product quality
closely suits customers’ demands.

Third joint distribution will greatly reduce delivery vehicles and save the surrounding environment. In addition it lowers
shipping costs and enables the quick distribution of many healthy foods.

Unlike transportation with the use of distribution center direct shop shipping ensures all products arrive from every
vendor to every customer location without delay. The delivery of each cargo is aimed in an instant freight network and
the supply chain manager needs to decide the quantity to be transported and the mode of transport to be used. The key
advantage of this function is the absence of intermediate warehouse and its ease of operation and coordination.
Nonetheless it is better justified if calling at the consumer’s location is enormous enough that the most advantageous
replenishment lot sizes are similar and dealer’s most load capacity in each region. With little buyer’s spot it appears to be
excessive fees. They need to produce in large quantities from the mindset of the carriers which contribute to unnecessary
supply chain stock.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 5
5. What do you think about the 7dream concept for Seven- Eleven Japan? From a supply chain perspective, is it likely to
be more successful in Japan or the United States? Why? (A.C 2.2, A.C 4.2, A.C 4.3, A.C 5.2, A.C 5.3)

7dream concept was created in February 2000. The aim was to exploit the cutting-edge delivery system to make it easy
for the rest of the Japanese stores to access them and it proved successful as 92 percent of their customers decided to
buy their goods from the local convenience store. It will be known as Japanese consumers frequently visit their local
convenience store. 7dream wanted to gain the productivity of the existing distribution system because the company
needed a reliable supply chain to adapt to the needs and instances of the online customers. The 7dream edition in line
with the supply chain is likely to be more common in Japan than in the USA. The rationalization is that the Japanese
demand is a smaller relative to the USA. There were 12,071 stores in Japan in 2008 with about twice as many as 6,262
stores in the USA. The retail level in Japan has also risen due to the fact that Japan’s surface area is much smaller than in
USA and because if the fact that Seven-Eleven shops are easily accessible in Japan as Japan has stronger customer
services. Following are the reason for 7dream concept suitable in Japan.

First Japanese stores are much larger than in the US meaning that Seven-Eleven convenience stores are commonly known
in Japan. Considering customer satisfaction it is common for people to seek advice after their purchase online. Meanwhile
they will prefer to pay their bills inside the shops for the sake of convenience. So with high density and broad distribution
within residential areas Japan is extra suitable for embracing the concept of 7dreams.

Secondly all products are delivered via Japanese distribution facility. In addition online shopping is usually characterized
with the aid of high volume and small batch so different vendors can ship merchandise in large portions to fulfillment
centers and then they can deliver merchandise in accordance with the orders to different shops. This delivery will
increase the productivity of the chain minimize shipping time reduce costs and meet the needs of the customer higher.
Although in the US delivery system means 7dream isn’t always practical there.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 6
6. Seven-Eleven is attempting to duplicate the supply chain structure that has succeeded in Japan and 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. (A.C 5.1, A.C 5.2, A.C 5.3)

CDCs suggest hybrid fulfillment center as well as direct store delivery in DSD fashion. The pros are with the development
of CDCs.
(1) The CDC and supply chain system has been working efficiently in Japan thus helping to effectively conduct
medical management and improve buyer sensitivity and creating full size benefits on the way to offering the CDC
functional option to the United States. Therefore the feasibility is high.
(2) In the US wholesalers and manufacturers use DSD to top up.
I. Using DSD can meet the requirement of specific replenishment and usually it is for large quantities of
orders. This reduces distribution costs and increase responsiveness.
II. CDC is more applicable to small batch orders and provides specialized services with the aid of product
classification. As a result the mixture of DSD and CDC could be more successful as a result of shortage of
phrases of responsiveness and mal losses.
(3) With the advent of the supply chain form of Japan and the CDC America organization can get all data including
income and inventory on time and as should be. In addition they will create medical predications about demand
for you in the future to provide rapid reaction and a high level of provider.

Some cons are as follows –

1) With the implementation of CDCs in America organization need to personalize or lease a few infrastructures they
may want to decide how to deliver goods whether by them or by using outsourcing in addition to a few relevant
neighborhood design and planning activities. In fact they would have a record management system installed.
Through spending a lot of money and assets the operating price for companies will grow significantly.
2) If both DSD and CDC are used for replenishment tension will increase. After an order has arrived companies want
to choose between DSD and CDC. Clearly companies can just expand the usage of the DSD replenishment to dock
with graphic order terminal, scanner terminal, transfer computer and POS register to the current data unit. In the
meantime a set of strict criteria for choosing the correct method of replenishment should be made.
3) All risks and charges in DSD shall be borne by manufacturers and at the same time as in CDC only a portion of
these shall be borne by manufacturers. Thus the implementation of CDC would raise the dangers and charges for
the companies to some degree.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Conclusion

This assignment has helped me to establish a link between the various supply chain frameworks which could be possibly
used by organizations to fulfill business objectives. This link can be used to find the right balance between the
organization’s efficiency and responsiveness which could ideally maintain customer’s satisfaction. Additionally, this link
may also help in effective cost-reduction.
This assignment also gives a brief description about the utility benefits of information technology to transmit information
at the store level to the supplier whenever an order is placed as per the contextual analysis of the case study given about
Seven Eleven. Therefore, this integrated information technology helps bridging gaps between the supplier and the
organization.
The forgoing statement also helps accomplishing effectiveness by the utilization of information technology in supply
chain management. All the players in line receive information about the products and their sale in the store,
transportation and the inventory. Hence, reducing the chances of miscommunication or loss of information.
Supply chain management also necessitates the importance of critically evaluating various procurement techniques and
logistics. Whereby, logistics is the conveyance of products across the supplier till it reaches the customer, while
procurement serves as the vital beginning of the supply chain network.
Finally, this assignment has given me the opportunity to formulate strategies to improve supply chain management in an
organization and breaking any risks involved or barriers that may form. Therefore, assessment of the strategy proposed
to improve the supply chain management is largely considered crucial as it may have a major effect on the organization.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Bibliography

Supply chain –
Investopedia. (2019). Supply Chain. [Online] Available at:

https://www.investopedia.com/terms/s/supplychain.asp.[Assessed on 28/1/2020]

Five supply chain drivers –

mhugos (2014). Five Supply Chain Drivers. [Online] SCM Globe. Available at: https://www.scmglobe.com/five-supply-
chain-drivers/. [Assessed on 22/3/2020]

Direct store delivery and combined distribution center –

www.coursehero.com. (n.d.). DSD Direct store delivery and CDC Combined distribution centre makes seven. [Online]
Available at: https://www.coursehero.com/file/p1k3rhu/DSD-Direct-store-delivery-and-CDC-Combined-distribution-
centre-makes-seven/ [Accessed 22 Mar. 2020].

Product and process –

writepass (2016). The WritePass Journal. [Online] The WritePass Journal. Available at:
https://writepass.com/journal/2016/11/products-and-processes/ [Accessed 22 Mar. 2020].

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