7 Eleven

4. Seven-Eleven does not allow direct store delivery in Japan but has all products flow through its distribution center to reduce the number of vehicles required for daily delivery service to each store, even though the delivery frequency of each item was quite high. At the distribution center, delivery of like products from different suppliers was directed into a single temperature controlled truck. Each truck made deliveries to multiple retail stores. None of the distribution centers carried any inventory; they merely transferred inventory from supplier trucks to Seven-Eleven distribution trucks. This dramatically reduced delivery costs and enabled rapid deliver of a variety of fresh foods.

Direct store delivery is more appropriate when the store only purchases from a few manufacturers/suppliers, and when the items are high-value and low demand. (For instance, when the suppliers carry a variety of items that the store demands, and these items account for a significant portion of the store’s total requirement.) In addition, when warehousing space is limited in the supply chain, direct store delivery can eliminate the need for distribution centers

5. The 7dream concept is not a good idea because the store will be acting as a post-office pick up store, and will have carry many products that require large storage area. The store will need to have a totally separate and independent information tracking system for this service in order to coordinate between the customers’ information, the parcel delivery companies’ information, and the ordered items. The store will also be responsible for any lost items and mistakes made during the process.

The concept is likely to be more successful in Japan than the United States because Seven-Eleven Japan has far more customers and stores than that in the United Stated. In 2004, Seven-Eleven Japan represented Japan’s largest retailer in terms of operating income and number of stores, and customer visits to Seven-Eleven outlets totaled 3.6 billion. In addition, Japan is a much smaller and densely packed country compare to the United States. Besides in large cities, customers in the United States generally do not have the habit of visiting convenient stores other than to get gas.