7-ELEVEN - An SCM Success Story


The convenience store chain has redefined the industry with its innovative approach in the last four decades since Seven-Eleven Japan (SEJ) opened its first outlet. Seven-Eleven was the largest network of convenience stores in Japan. Most of the success story has rich experience but Toshifumi Suzuki, Founder, and CEO of Seven-Eleven Says that “It’s not your background, or how much experience you have, but it’s all down to understanding and knowing what your consumers want, that will be the driving factor towards success”. From his statement, it is clear that Seven Eleven supply chain strategies are framed as per the customer’s demand and expectation.

As of now the declining growth in the industry reflects that the domestic convenience store market has reached its saturation point. But SEJ said the drop was only temporary. The deliberate past success stories would never allow anyone to undervalue the power of resilience factor in SEJ. It may be exciting to know that a retail store resumes its operation immediately after a few hours of Earthquake in 1995. Due to the after-effects of earthquake relief trucks were crawling on the highways, at the same time SEJ was using its helicopters and motorcycles to deliver rice balls to the city. Do you think that the supply chain efficiency factor of SEJ made this happen? Certainly, not! When all other companies were focussing on maximizing speed and minimizing supply costs SEJ adopted a different framework which is designed to promptly respond to the quick changes in demand. Even before the Internet era began, SEJ understood the trivial role of data exchange and invested in real-time systems like satellite connections and ISDN lines to connect with its suppliers, distribution centers and logistics providers and also tracks the Customer demands. When all other companies provided incentives to enhance the growth and relationship with the partners SEJ’s message to its partners was little unmelodious. It was a win-win situation if they make SEJ successful on the other hand if they fail to deliver on time, the carrier has to pay a penalty which equals the gross margin of the products carried to the distribution stores.

A calm and fresh attitude including these qualities such as agility, adaptability, and alignment are constantly necessary for the supply chain team towards changing customer demands. Supply chain agility is one of the most desirable traits among the organizations to sustain and thrive competitions in an unexpected future event. It entails the ability of an organization to move quickly and calmly over the external disruptions like sudden fluctuations in customer demand, sudden implementation of new acts by the government or a natural calamity. Some of the key elements to be considered while designing an agile supply chain are quick acknowledgment, exchange of information without delays and a back-up plan on account of a future possible event. Markets are evolving consistently and are often prone to changes. This happens majorly due to the shifts or increase in demand, supply or both. Organizations have no other choice but to adapt to the changes in the market. Adaptable supply chains include strategies, products, and technologies that are designed to meet the structural shifts in the market. And finally, it’s the supply chain alignment which is considered as the critical success factor for complex supply chains. Different firms that come under the same supply chain may have different interests, therefore, companies are more conscious about aligning their own interests with all the firms that come under their supply chain. It is enlightening to know that SEJ incorporated all three aspects in a very effective way to build their SCM success story.

Written by Malathi Dileepan

Malathi Dileepan is a B.Tech. in Information Technology and has been working as Manager [Certifications and Consulting] since 2012. She has led several business analysis projects and has tremendous knowledge in all the 20+ certifications offered by Fhyzics.

Leave a Reply

    Related Post

    Growth Is Just One Click Away

    Don't feel like calling? Just share some details about your SOP Requirements & Fhyzics representative will get in touch with you. Schedule A Meeting with our Manager [Consulting & Certifications]