Assessment Activity Weel 4 - Essay Example

Seven – Eleven Japan(SEJ Seven- Eleven Japan is the largest retail company in Japan. SEJ’s leading market position and performance had been largely due to its pioneering innovation in rationalizing Japan’s convenience retail industry. SEJ’s innovation in supply chain management placed it far ahead from its competitors in both profitability and business process technology. Seven-Eleven had realized unique growth in the business sector as there was utilization of supply chain strategy of Seven-Eleven and certain performance drivers upon the balance nature business responsiveness and the awareness of certain risks involved. 1. The assumptions that are necessary when using customer driven analytics to make managerial decisions are: i.

Gathering of proper information about customers and store performance. ii. The detailed knowledge of its customer and sales patterns helps the firm to determine which items were selling well, or which items were most profitable to sell in the first place. iii. Keeping track of its purchase transactions and analyzing them to mass information about customer demand, pricing, and interest about new products. iv. Store assortments the increased productivity of inventories and store space within consumer interface v.

Replenishment upon optimizing time and cost in Seven-Eleven replenishment system vi. Efficient promotion in maximizing total system efficiency of trade and consumer promotion vii. Product introduction reflect effectiveness of new product development and introduction activities 2. The IT strategy for Seven Eleven influences other aspects of the business such as inventory, human resource and vendor relationships. i. Freshness: The SEJ’s retail strategy emphasized on the freshness not only on perishable products but also on all the merchandise items, by changing the products as per the customer preferences.

The SEJ used Scanner Terminal (ST) to check the freshness of the products by just scanning the barcode on the label. The freshness was taken care to such a great extent that the coffee had a shortest shelf life of 1 hour. ii. Stock: SEJ focused on only high volume products and discontinued the poor sellers. It’s store size was small and shelf spacing had a critical value in their retail format. SEJ’s information system helped to manage critically the stock keeping units in order to better utilization of shelf space. iii. Integrated Service Digital Network (ISDN): it’s a two way communication system enabled the franchisees to directly access the host computer and the central database containing the Point of Sale data and analyses.

The fiber-optic network between stores and SEJ’s Central Data Centre, plus in-store wireless network and also the location/trade area (LTA), enabled the stores to analyze the sales pattern based on the store’s characteristics. iv. Information collection and feedback loop: The proper analysis of the information collected from the stores will help the company to reach the pinnacle of success like the SEJ. In SEJ, store managers can obtain real time information through the Graphic Order Terminal on site, and hence allowing the manager to analyze the data effectively.

The various types of data that can be analyzed are hourly sales trend for individual items, scrap trend analysis, stock out ranking by individual items, sales trends for new products, hourly sales trends by customer profile. v. Operational Field Counselors (OFCs): OFCs are the employees who are in charge of 7 to 8 stores, who visit the stores twice a week to deliver the messages developed at corporate HQ and help implement the tactics recommended for the week. The OFCs also collect the information from stores and report to the district manager and then to the Zone manager.

This information feedback loop formed the basis of various decisions for SEJ’s corporate and store managers. Decisions included are daily ordering, store layout, merchandising, new product development and new store opening. vi. Ideally, several Japanese consumers’ passion for innovative products means that Seven-Eleven may stock proliferation of lines with little back-up inventory in store. The concept then places considerable strain on the logistical network as marketing channels can be highly fragmented within multi-layered system that includes manufacturers, wholesalers and retailers.

However, through successful logistical innovation in convenience stores sector as led by internationally acclaimed store, Seven-Eleven Japan determining that supply chain structure within the store has been streamlined in a unique way that suits the particular market environment in Japan. Thus, such role of wholesalers in Seven-Eleven’s distribution system would initially minimize such incremental trading power parallel to better quipped stores with successful supply chain domains. In reality, Seven-Eleven have found better ways of developing their distribution channel through information knowledge expertise and the augmentation of their business functions to deliver frequent product services of varied items and the engagement assurance given to the customers. 3. The important concepts of knowledge from the case study are: i.

Store Location: The retail stores must be located very near to the customers for their easy accessibility. ii. Importance to customer tastes and preferences: The retail stores must give much importance to the customer tastes and preferences so that the customers will be satisfied and will be eager to shop in the same store. iii. Effective utilization of information systems: The information about the customers will be very much necessary for the development of the customers. Hence it is required to collect the useful data and information systems can be used for better collection of data. iv. Collection of useful data and timely analysis: the information collected need to be analyzed for the decision making.

But it is required to analyze within the time frame for on time decision making. v. New Product development: As the company becomes innovative and develops more new products the customers will be more satisfied. The POS data can be used to analyze and determine the new product development. REFERENCES: 1. “Fun Facts,” 7- Eleven, http://corp.7-eleven.com/AboutUs/Fun Facts/ tabid/77/Default.aspx (May 13, 2010). 2. Bernstein, Jeffrey R., "7-Eleven in America and Japan," in Thomas K. McCraw, ed.

, Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions, Cambridge, Mass.: Harvard University Press, 1997, pp. 490–529. 3. Arntzen, B.C., Brown, G.G., Harrison, T.P., Trafton, L.L., "Global supply chain management at Digital Equipment Corporation", Interfaces, 21.5 (1995), pp.69-93 4. Doyle, S. and Broadbridge, M., "Strategic supplier segmentation: the next best practice in supply chain management", California Management Review, 40.2(1999), pp.57. 5.

Fernie, J., “International comparisons of supply chain management in grocery retailing", Service Industries Journal, 15.4(1994), pp.134-47 6. Kunitomo, R, "Seven-Eleven is revolutionizing grocery distribution in Japan", Long Range Planning, 30.6 (1997), pp.877-89. 7. Kurt Salmon Associates, Efficient Consumer Response: Enhancing Consumer Value in the Grocery Industry, Food Marketing Institute, Washington, DC, (1993). 8. Szymankiewicz, R., "How can service business survive and prosper?", Sloan Management Review, Vol. 27(1997) pp.21-32. 9.

Yahagi, I, "The convenience store system – case indications in Japan", European Retail Digest, (1994)pp.18-28 10. Yahagi, I, "The convenience store system – made in Japan", European Retail Digest, (1997) pp.18-28