Prepared by: BySusheel

INTRODUCTION

Leading Convenience Store in Japan.No of Stores - 12000Annual Profit - $30 BillionChairman & CEO - Toshifumi Suzuki

Positioning : “That Responds to Change”

US & Japanese Convenience Stores

Cultural Views

Japan Stores – Konbini Integral part of their daily life

US – Simple Mini Marts Late Night Visits & Saves time while filling gas.

SEJ Success Mantra• Integration among Partners

• Share Information through highly evolved Data rich SCM

Important Aspect of Japanese Business Model is ability to gather data about their Consumers & transform it into Information.

Data Rich SCM

Solid Information System (Trends in Market Demands)

Helps in Product Replenishment & CreationPioneered a highly Efficient Logistics systems

Replenished Products to the very small shelf space (Japan)

Major Innovator in convenience store Operations.

Implemented TQM – (Kaizen-Japan)

Achieved Success in Suffering Economy ( Due to Consumer focused orientation based upon Analysis of Information Technology)

In 1991 SEJ Invested $200 Million 4th Gen IT System.

ISDN Links their Retail Store with their Headquarters.

Data is gathered during every single transaction.

Store Manager & HQ Manager Analyze the Data.

HQ Manager Aggregates the Data & send it to the Store Manager & Suppliers.

Store managers Review Information Hourly.

Weekly Cycle Information Gathering

Quality control data is analyzed by computerized decision support(“what if” & “goal seeking”)

Started using ISDN (Integrated Service Digital Network)

Daily and weekly cycles Macro & micro decision making which leads to reduce

risk(SCM)

Adopted 5th generation IT system in 1998

SEJ introduced new system to combine store level product tracking by using satellite and internet

communication

Adopted JIT approach to reduce cost of keeping inventory and spoilage

Introduced Joint Delivery program.(Reduced Delivery Time)

Information System provides Sales Trend ,purchase patterns , Customer Profile and Store characteristics

Distribution according to Geographical Region.

Constant Communication between store and HQ

Value Proposition

Approach Strategy

Cluster of 50-60 stores in a geographical area supported by DC

Market Dominance

Approach Tactics

Combination of own and franchisee stores

Store size: 150 sqm.

Average inventory: 3000 SKU and 5000 SKU(max)

Emphasis on regional merchandise

Schematic Representation of Supply Chain

Supplier(Frozen)

Supplier(Warm)

Supplier(RoomTemp)

Supplier(Cold)

Stores Stores Stores Stores

Stores Stores Stores Stores

DistributionCentre

Supply Chain Decision-Making Framework

Competitive Strategy

Supply ChainStrategy

Supply Chain Structure

Facilities Inventory Transportation

Information Sourcing Pricing

Cross Functional Drivers

Efficiency Responsiveness

Logistical Drivers

Financials

Total sales

Market Share

36.5

20.317.1

10.94

11.1

Sales

7 Eleven JapanLawsonFamily MartSunkusMinistockOthers

Conclusion

Average Inventory Turnover Time Reduced 25.5 to 8.4 days.

1977-2000 Sales improved $3660 to $6810.

Effective Supply Chain management and inventory management.

Data Rich SCM is the most suitable approach for efficiency and customer Value.

Gross Margin increased from 24% to 30%.