Welcome to our

presentation
Case study solution on
SEVEN-ELEVEN JAPAN CO.
 Company profile
 Company name : Seven-Eleven Japan Co. ltd.
 Chairman and CEO : Toshifumi Suzuki
 Date of establishment : November 20,1973
 Capital : 17,200 million yen
 Total Store Sale in Japan: 3,508,444 millions yen
 Revenue from operations: 617,559 millions yen
 Operating Income: 186,760 millions yen
 Ordinary Income: 194,104 millions yen
 Net Income: 112,446 millions yen
 Number of Stores in Japan: 15,072
Food Items Classification
 Chilled Temp. items
-Sandwiches,Sweets,Milk

 Warm Temp. items

-Lunch Box, Rice Balls, Fresh Bread

 Frozen items
-ice-cream, ice-cube etc.

 Room Temp. items

-Canned food, instant noodles
Convenience at the Store
 Payment of bills
-Electricity, Telephone, Gas, Insurance premium

 Payment of installments on behalf of credit companies

 Payments for internet shopping

 ATM’s at almost all the stores

 Ticket sales, photocopying

 Pick up location for parcel delivery

Facilities

• Less in number • More in number

• Served stores • Kept more in

in it’s cluster shelf

Distribution
Store
center
Inventory
Distribution Center
• No inventory
• Highly efficient
• Poor at responsiveness
Store
• Kept daily stocks
• Low inventory
• Efficient but not very responsive
Transportation
Transportation at 2 levels

 Vendor to DC ( Vendor derived)

 DC to Store (7eleven derived)

Mode of Transportation Road ( using Vans & Trucks )

Reasons behind
 Rapid replacement cycles
 High frequency
 Provided high responsiveness as opposed to
efficiency
Case Study
Solution
Q : 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?
 All choices made by Seven-Eleven are structured
to lower its transportation and receiving costs.
For example, its area dominance strategy of
opening at least 50-60 stores in an area helps
with marketing but also lowers the cost of
replenishment.

 All manufacturing facilities are centralized to get

the maximum benefit of capacity aggregation and
also lower the inbound transportation cost from
the manufacturer to the distribution center (DC).

 Seven-Eleven also requires all suppliers to deliver

to the DC where products are sorted by
temperature.
 This reduces the outbound transportation cost because
of aggregation of deliveries across multiple suppliers.

 It also lowers the receiving cost.

 The information infrastructure is set up to allow store

managers to place orders based on analysis of
consumption data.

 The information infrastructure also facilitates the

sorting of an order at the DC and receiving of the
order at the store.
Q.4 Seven-Eleven does not allow direct store
delivery in Japan but has all products flow through
its distribution center. What benefit does 7eleven
derive from this policy? When is direct store
delivery more appropriate?
Benefit of Distribution Channel
• Lowers inventory since products are stocked only at
stores, not at both stores and warehouses.

• Improves product availability.

• Reduces complexity and costs for vendors to

directly deliver at stores.

Appropriate Store Delivery

• Less product variation.

• Fewer delivery destinations.

• Full truckload orders.