7-Eleven Japans strategic supply chain Essay Example | Topics and Well Written Essays - 1750 words

7-Eleven Japans strategic supply chain - Essay Example The success of 7-Eleven as a convenience store transformed it to become one of the world's largest operator, franchisor and licensor of convenience stores, with more than 27,900 units worldwide.In November 2005, 7-Eleven was taken private by Seven-Eleven Japan Company, a Japanese retailing chain. As the largest convenience store chain in the world, 7-Eleven convenience stores are open 24 hours a day. In Japan, the size of its stores was decreased in size that ranges from 125 to 150 square meters and each store stocks approximately 2,300 to 2,800 items. The company sells tobacco, beverages, beer, wine, candy snacks, fresh foods, dairy items and other general merchandise through its stores. In addition, 7-Eleven sells a number of private label products such as Slurpee semi-frozen carbonated beverages, Cafe Select coffee, Big Gulp fountain beverages and Big Bite hotdogs.Since its establishment in 1973, 7-Eleven Japan had taken on "Adapting to Change" as its business slogan, reflecting i ts focus on adapting to changing consumer trends. As such, its 7-Eleven convenience stores had earned the patronage of much of the population, far outstripping other companies in the convenience store sector as well as in the overall retail industry in terms of growth and profitability. In 2000, while Japan was in the midst of an economic downturn, 7-Eleven Japan opened an additional 423 stores and recorded the highest profits in the retail industry. Fact is that 7-Eleven Japan realized its phenomenal growth between the years of 1985 and 2003. During these period, the number of stores increased from 2,299 to 10,303; annual sales increased from 386 billion to 2,343 billion yen; and net income increased from 9 billion to 91.5 billion yen. Additionally, the company's return on equity (ROE) averaged around 14 percent between 2000 and 2004. In 2004, Seven-Eleven Japan represented Japan's largest retailer in terms of operating income and number of stores. Customer visits to 7-Eleven outle ts totaled 3.6 billion that year, averaging almost 30 visits to a 7-Eleven annually for every person in Japan. This impressive result and its rapid growth were due to its efforts at developing merchandise and services that met customers' needs and requirements. For example, it was the pioneer in providing ready-made meals such as sushi and spaghetti that had become popular among the Japanese population. In addition, the information and distribution systems played an especially large role in placing 7-Eleven Japan in a leading position. 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 Increasing supply chain responsiveness would mean the firm will also increase its ability to: Strategy in Increasing Supply Chain Responsiveness Risks Involved respond to wide ranges of quantities demanded meet short lead times handle a large variety of products build highly innovative products meet a very high service level Wider range of quantity implies greater variance in demand Less time to react to orders Demand per product becomes more disaggregated New products tend to have more uncertain demand Firm now has to handle unusual surges in demand Matching supply chain capabilities to customer's requirements means that a firm and their supply chain partners must be continually reassessing their performance with respect to these requirements. This reveals the importance of performance measures and their ability to relay information regarding the performance of each member within the supply chain, along with the performance of the supply chain vis--vis its end customers. Successful supply chains are those that can continue to deliver the right combination of cost, quality, and customer service as customer needs change. Weaknesses in any of these areas can mean loss of competitiveness and profits for all