International Supply Chain Management and Seven Eleven supply chain strategy

 Sveen Eleven supply chain strategy

7-Eleven competitive strategy

The competitive strategy means having long term plan especially for the company in order to gain competitive advantage. Seven eleven competitive strategy is the market dominance strategy with high distribution efficiency, system efficiency and franchise support services. The competitive strategy of 7-eleven can be characterized by high availability of quality and reasonable products at a convenient price and location. Seven eleven has ensured a differentiated strategy for merchandise, managed distribution, retail information system, provided a convenient shopping environment and a franchise model that is unique (Chopra, 2017 p.8). This has enabled the competitive strategy of the company to remain responsive. Considerably, companies have enhanced their efficiency and responsiveness through good management of the six drivers of the supply chain performance.

Six drivers of supply chain performance

The six drivers of the supply chain performance include inventory, facilities, transportation, sourcing, pricing and information (Jacobs, Chase, and Lummus, 2014). Seven eleven has set up their supply chain strategy within the framework of supply chain performance drivers. They have an inclusive store with information systems that have been installed in all their outlets and connected to both the seven eleven suppliers and distribution systems.

The supply chain management engages a strategy that illustrates and identifies facilitates, transportation, inventory, sourcing, information and pricing as the key drivers in order to enable companies create a competitive advantage (Chopra and Meindl, 2016 p. 214). The company has had a distribution system that has enabled them to reduce the number of trucks and vehicles that are being used for transportation and frequent delivery to each of their store (Croom, Romano, and Giannakis, 2000 p.65). They have facilities such as scanner terminals that are used to receive the supplies. They have a dedicated ISDN that has been installed to ensure speedy online communication that enables Seven Eleven to process, collect and feedback the point of sale data accurately. The data is then gathered and put ready for analysis. They have various hardware such as the Graphic order terminals that are used for placing orders, a store computer that has been connected to the ISDN and the POS registers that have been linked to the store. For each customer, the cashier is able to push a button that is used for the approximate cash register and the type of product that has been sold at that period to ensure that the supply chain is responsive and offers the type of product that is needed. They source information through the management information system which controls the distribution system the transaction processing and the property management. They transport their products to convenient stores through trucks and vans. For instance, they have one truck that is used for the distribution among stores and near a certain distribution center. Seven eleven has provided reasonably priced food items and their market dominance has enabled easy access for their customers. Such a pricing strategy has increased the responsiveness and efficiency of their supply chain (Chopra, 2017 p.268). The competitive strategy as well as the six drivers of supply chain have created a great competitive advantage for the company which has facilitated improved performance as well as efficiency and responsiveness of their operations.

Competitor

Taco Bell has been able to adopt the health Trans-fat free formula which has been a major competitive advantage over its competitors who have not yet moved to healthier recipe. Taco Bell has also relied on the drivers of supply chain performance for the supply chain management. This includes the management information systems that have been installed in all their store outlets to maintain the flow of information between the production subsystems and the customers. They have had an inventory control system that has been used for the overall operational strategy for the fast food automation within their operations (Mann, Kumar, and Mann, 2010 p.4). They have an electronic point of sale system for the cash register. This has been used to perform speedy service rather than the manual communicated process of order. They have facilities such as chilling and freezing equipment within the store system that has been used for maintaining the freshness of the food ingredients being offered. However, the six drivers of supply chain performance of Seven eleven have been considered more efficient and responsive as compared to Taco Bells.

Seven eleven	Taco Bell
Competitive strategy: Market dominance strategy	Competitive strategy: Health Trans-fat free strategy
Six drivers of supply chain performance – Inventory-Inventory management system – Facilities – Scanner terminals, ISDN, POS registers, Graphic order terminals -Transportation –Truck and vans -Sourcing- Multi-sourcing -Pricing-Affordable pricing -Information- Management information systems	Six drivers of supply chain performance – Inventory- Fast food automation – Facilities – chilling and freezing equipment within the store system -Transportation -Van -Information- Management information systems

 

Responsive and efficient supply chain

The difference between an efficient and responsive supply chain comes down to the capability of meeting the undefined demand (Peck, 2005 p.216). An efficient supply chain can hold its suppliers, manufacturers and retailers to accomplish the processing and orders and meet a predictable and stable demand at a lesser cost (Nel and Badenhorst-Weiss, 2010 p. 210). On the other hand, a responsive supply revolves around collaboration between the stakeholders to acquire and exchange information in a feedback loop to ensure that they have produced the right product to satisfy the uncertain demand (Wang, Wallace, Shen and Choi, 2015 p.687).  Seven eleven has incorporated a supply chain with various systems that have enabled efficient and responsiveness of their supply chain. They have a supply chain that has enabled them to be responsive through short lead times and improved internal processes and effective market supply in accordance with the demand of the customers (Seuring, Sarkis, Müller, and Rao, 2008 p.1548). They have a long life cycle and predictable demand.  On the other hand, their supply chain has been responsive through a proficient distribution system, an integrated information system that maintains information flow and a market dominance facility such as product development and effective inventory management.

 

 

Effective practices within the six drivers of Seven Eleven’s supply chain

The 7-eleven company has been able to set up a sophisticated distribution and preparation system that has been designed to reduce the number of distributions in the stores daily as of the numerous suppliers (Beske, Land and Seuring, 2014 p.133). Their distribution strategy is more effective as compared to their competitors Taco Bells with locations that are convenient. For instance, the company has distribution centers that are not present in Taco Bells. The company has several centers of distribution (DC) that are used for the delivery of quality and fresh products thus less lead time and reducing the logistics and inventory costs to the whole supply chain.  The company has utilized the DC system which has shortened the cycle and thus granting time to ensure that fresh and superior products and services have been delivered to the customers.

The company has integrated and efficient management information system that allow short replenishment cycle periods (Stadtler, 2008 p.32). Additionally, they have a franchise model that is more responsive as compared to Taco Bell which has enabled them to grow new profits and revenue center.  It has also enabled the flexibility of altering the delivery schedule depending on the demands and desires of the customers (Anderson, Britt, and Favre, 2007 p.43). For instance, for efficient distribution, there is a single truck that visits the different stores within the same geographical region. 7-eleven has an integrated information system that has been used to share information such as the changing consumer demands and the adjustment in the supply stores depending on the consumer demands.  Its capabilities have boosted the business agility and fulfillment of customer demands in the various stores as compared to their competitor’s stores which have not yet made changes for their business strategy.

Transportation Strategy

Seven eleven owns the largest logistic system which has enabled the company to distribute and replenish their products efficiently within their markets (Rushton, Croucher and Baker, 2014, P.132). Transportation within Seven Eleven occurs at two levels which is a vendor to the distribution center and then the distribution center to the store. The company relies more on trucks and vans for transportation.  Seven eleven has utilized a distribution support system that is able to operate at all temperature levels offering convenient services. The company has four different categories of temperature controlled trucks that are able to visit their distribution centers and make deliveries to the retail stores. This has enabled efficient transportation and distribution system that has made Seven Eleven more competitive in the market. This has enabled the company to offer the same services through the efficient transportation system. The trucks move from the distribution centers taking the products to their final destinations within the same geographical regions. Through the distribution centers, they have been able to reduce the distribution cycle thus maintaining the freshness of their products. For instance, there is a single truck that visits the distribution centers within the same geographical area. This has supported the movement and storage of products.

Intermodal transportation involves transportation using multiple modes of transportation to lower cargo handling, reduce loss and damage and enable products to be transported faster (Carter and Liane Easton, 2011 p.42). The use of different integrated transport carriers such as rail transport, barge services, and trucking services will effectively lower the cost of relying on one means of transportation. Due to the fact that there are various characteristics and types of terminals for the different modes of transportation, extensive interconnections will be very efficient due to the fact that they enable easy handling in various modal systems Anderson, D.L., Britt, F.F. and Favre, D.J., 2007. This will also permit low cost, quality of service as well as consistent capacity. For instance, the use of train and truck will lower the fuel cost and add value for the overall supply chain and lead to a significant saving on the transportation expenditure for the company. Intermodal transportation more so the rail and truck offers reliable capacity and is more resourceful than other modes of transportation due to the quality of services (Ashby, Leat, and Hudson-Smith, 2012 p.504)

Efficient logistics management has been the foundation of a responsive supply chain within seven eleven (Carter and Rogers, 2008 p.372). With a responsive transportation network, seven eleven has been able to lower the costs of supply chain flow and increased their customer levels due to the little disruption within the supply chain (Tsipoulanidis and Schönberger, 2017 p.82) For instance, seven eleven has established a responsive network of transportation that begins with the combined distribution center and the direct store delivery. They have an effective transportation strategy. Their distribution system has had a combined delivery system that has been flexible enough to enable change the delivery schedules depending on the customer demands and has reduced the transportation and inventory cost (Seuring and Muller, 2008 p.458). For instance, they have enabled delivery of fresh food products by the use of the advanced distribution system whereby they replenish their store thrice a day. They have relied on inventory to achieve a greater level of responsiveness and maximize their surplus this being efficient (Gattorna, 2017 p.18). Through faster transportation, they have been able to compete effectively with their competitors such as Taco Bells. The company has four varying categories of temperature controlled trucks whereby each truck makes a number of deliveries to the stores from the company’s DC. This type of distribution system has enabled the company to lower the number of vehicles that are being used in transportation and daily delivery services.

Facility Management

Seven eleven has done its choice on facility location based on the market demands. This includes the development of infrastructure with capabilities that support their supply chain strategy through a timely, efficient, dependable and cost-effective strategy (Croxton, Garcia-Dastugue, Lambert, and Rogers, 2001 p. 22). They have had strategic facility management whereby they have partnered with FM to ensure that the maintenance program is being utilized to handle all the stores. Seven eleven has convenient store outlets with a combined delivery and distribution system that has increased efficiency of their services (Rushton, Croucher and Baker, 2014 p.134). They have combined the delivery system thus contain the frozen, room temperature, chilled food, and hot foods within the distribution centers. They have had a terminal scanner and a point of sale that enables track the sales records. Goods have been received quicker through the routine of a scanner. They have had many channels at various convenient places through which their customers are able to walk (Choon Tan, Lyman, and Wisner, 2002 p.628). However, there is limited space for storage in the distribution centers thus small and frequent deliveries to the distribution centers and the retail stores.

Seven eleven has based their supply chain decision on the market dominance strategy in their specific target areas.  Seven eleven has made outlets at various convenient locations whereby the customers are able to access their services and products within the markets. The retail outlets in the small geographical areas have been held in position by the distribution centers that have allowed an effective distribution system (Storey, Emberson, Godsell, and Harrison, 2006 p.764) Convenient locations have enabled timeliness in the delivery of products and services by ensuring that the company is able to act purposefully within the right time scale to the demands of the customer thus increasingly responsive (Seuring, and Müller, 2008 p. 1702). On the other hand, the location of the stores has lowered the cost of transportation and delivery thus more efficient in utilization of resources.

Seven eleven has utilized the distribution systems and distribution centers as well as an efficient information system for effective flow of the operations (Xu, and Gursoy, 2015 p.230). The distribution centers have enabled maintenance of the product’s freshness and management of deliveries for efficient product cycle (Chopra and Meindl, 2007 p. 87). Ideally, the information systems have ensured effective distribution, the flow of information and feedback from the stakeholders for strategic operations (Bozarth, and Handfield, 2008 p.42). The information and distribution systems have been linked to the inventory system that allows transmission of information directly to the distribution center and the supplier using a pull system that is able to replace what is already sold within the delivery period (Ritchie and Brindley, 2007 p.310)

Information Systems

Seven eleven has utilized the management information systems to acquire competitive advantage that not only allows them to decide on which products to offer to their customers but also to allow them to determine how they are going to deliver the services and products a crucial and competent way to sustain and gain competitive advantage. The management information system of Seven eleven has enabled them to capture crucial data related to their customer and has also enabled them to provide customers with services and products that they want or need
(Hugos,2018 p.133). Additionally, they have been able to monitor the products and use the refined inventory structure to offer accurately what the consumer wants and at the period they needed it. Their inventory system has been refined to ensure that they are more accurate on restocking and ordering (Genovese, Acquaye,  Figueroa, and Koh, 2017 p.346). They have also developed a streamlined supply value chain where they have been able to electronically transmit orders and keep the product turnover as high as possible.  Seven eleven information system includes the Management information systems, just jit inventory system, Electronic ordering system, DDS for quality control, the point of sale system, a computerized system for control, automated storage, purchase control system and workforce planning system.

The information system has enabled Seven Eleven to well match their supply and demand with the merchandise mix and development of new products appropriately (Hugos, 2018 p.136). The information system contains a point of sale system that is used to capture data and analyze the customer preference and the demand and sales trends within the market. Forecast accuracy has been facilitated by a fine line of tracking the demand through the use of the information system which is important for responding to the demand signals more efficiently. The management information system has enabled reduced replenishment cycle thus a great impact on the level of service (Stadtler, 2005 p.578). For instance, the system enables notification on the POS on sales transactions and then updates on the inventory position at the end of the day.

Seven eleven information system strategy is not very good at forecasting thus leading to an increased rate of missed opportunities within the market as compared to their competitors (Ivanov, Tsipoulanidis and Schönberger, 2017). Responsiveness has increased and the convenience of the store chain has been exposed to greater uncertainty.  There is a need for extra space in the stores due to the need for local inventory thus leading to the risk of obsolete inventory as well as the need for increased space to ensure effective inventory management.

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