Slide 1: Supply Chain Management Introduction
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Slide 2: Outline
What is supply chain management? A supply chain strategy framework Components of a SCM Major obstacles and common problems Seven Eleven Japan
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Slide 3: Traditional View: Supply Chains in the Economy (1990, 1996)
Freight Transportation
$352, $455 B
– Transportation manager in charge – Transportation software
Inventory Expense
– Inventory manager in charge – Inventory software
$221, $311 B
Transportation and inventory managers
Administrative Expense Logistics related activity
$27, $31 B
11%, 10.5% of GNP
$898 B spent domestically for SC activities in 1998. $1,160 B of inventory in the US economy in the early 2000s.
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Slide 4: Traditional View: Cost breakdown of a manufactured good
Profit Supply Chain Cost Marketing Cost Manufacturing Cost
10% 20% 25% 45%
Profit Supply Chain Cost Marketing Cost
Manufacturing Cost
Effort spent for supply chain activities are invisible to the customers.
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Slide 5: What can Supply Chain Management do?
Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies
– A typical box of cereal spends 104 days from factory to sale – A typical car spends 15 days from factory to dealership – Faster turnaround of the goods is better?
Laura Ashley (retailer of women and children clothes) turns its inventory 10 times a year five times faster than 3 years ago
– inventory is emptied 10 times a year, or an item spends about 12/10 months in the inventory. – To be responsive, it relocated its main warehouse next to FedEx hub in Memphis, TE.
National Semiconductor used air transportation and closed 6 warehouses, 34% increase in sales and 47% decrease in delivery lead time.
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Slide 6: Magnitude of Supply Chain Management
Compaq estimates it lost $0.5 B to $1 B in sales in 1995 because laptops were not available when and where needed P&G (Proctor&Gamble) estimates it saved retail customers $65 M (in 18 months) by collaboration resulting in a better match of supply and demand When the 1 gig processor was introduced by AMD (Advanced Micro Devices), the price of the 800 meg processor dropped by 30%
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Slide 7: Importance of SCM understood by some
AMR Research:
– "The biggest issue enterprises face today is intelligent visibility of their supply chains-both upstream and down"
Forrester Research:
– "Companies need to sense and proactively respond to unanticipated variations in supply and demand by adopting emerging technologies such as intelligent agents. To boost their operational agility, firms need to transform their static supply chains into adaptive supply networks”
Gartner Group:
– “By 2004, 90% of enterprises that fail to apply supply-chain management technology and processes to increase their agility will lose their status as preferred suppliers”
» Open ended statement. Agility can be increased continuously.
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Slide 8: Top 25 Supply Chains
AMR research http://www.amrresearch.com publishes reports on supply chains and other issues. The Top 25 supply chains report comes out in Novembers. The table on the right-hand side is from The Second Annual Supply Chain Top 25 prepared by Kevin Riley and Released in November 2005.
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Slide 9: SCM Generated Value
Minimizing supply chain costs while keeping a reasonable service level
customer satisfaction/quality/on time delivery, etc.
This is how SCM contributes to the bottom line SCM is not strictly a cost reduction paradigm!
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Slide 10: A picture is better than 1000 words! How many words would be better than 3 pictures?
- A supply chain consists of
Supplier Manufacturer Distributor Retailer Customer
Upstream
Downstream
- aims to Match Supply and Demand, profitably for products and services - achieves
SUPPLY SIDE DEMAND SIDE
The right
Product
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+++++
The right The right The right The right
The right
Price
Store
Quantity
Customer
Time
=
Higher
Profits
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Slide 11: Detergent supply chain:
P&G or other manufacturer Third party DC Albertson’s Supermarket Customer wants detergent
Plastic cup Producer
Tenneco Packaging
Chemical manufacturer (e.g. Oil Company)
Chemical manufacturer (e.g. Oil Company)
Paper Manufacturer
Timber Industry
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Slide 12: Flows in a Supply Chain
Material
Supplier
Information Funds
Customer
The flows resemble a chain reaction.
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Slide 13: SCM in a Supply Network
Supply Chain Management (SCM) is concerned with the management and control of the flows of material, information, and finances in supply chains.
Cash Products and Services Information
THAILAND INDIA N-Tier Suppliers Suppliers MEXICO Logistics TEXAS Distributors US Retailers
Supply Side
OEM
Demand Side
Demand Supply
The task of SCM is to design, plan, and execute the activities at the different stages so as to provide the desired levels of service to supply chain customers profitably
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Slide 14: Importance of Supply Chain Management
In 2000, the US companies spent $1 trillion (10% of GNP) on supply-related activities (movement, storage, and control of products across supply chains).
Source: State of Logistics Report
Frequent Supply shortages
Inefficient logistics
Low order fill rates
Tier 1 Supplier
Manufacturer
Distributor
Retailer
Customer
High stockouts
Glitch-Wrong Material, Machine is Down – effect snowballs
High inventories through the chain
Ineffective promotions
High landed costs to the shelf
Eliminating inefficiencies in supply chains can save millions of $.
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Slide 15: A Generic Supply Chain
Sources: plants vendors ports Regional Warehouses: stocking points Field Warehouses: stocking points Customers, demand centers sinks
Supply
Inventory Purchase Transportation
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Inventory
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Slide 16: Cycle View of Supply Chains
Customer
Customer Order Cycle
Retailer Distributor
Replenishment Cycle
Manufacturing Cycle
Any cycle 0. Customer arrival 1. Customer triggers an order 2. Supplier fulfils the order 3. Customer receives the order
Manufacturer
Procurement Cycle
Supplier
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Slide 17: Push vs Pull System
What instigates the movement of the work in the system? In Push systems, work release is based on downstream demand forecasts
– Keeps inventory to meet actual demand – Acts proactively
» e.g. Making generic job application resumes today (e.g.: exempli gratia)
In Pull systems, work release is based on actual demand or the actual status of the downstream customers
– May cause long delivery lead times – Acts reactively
» e.g. Making a specific resume for a company after talking to the recruiter
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Slide 18: Push/Pull View of Supply Chains
Procurement, Manufacturing and Replenishment cycles
Customer Order Cycle
PUSH PROCESSES
PULL PROCESSES
Customer Order Arrives Push-Pull boundary
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Slide 19: Examples of Supply Chains
Dell / Compaq
– Dell buys some components for a product from its suppliers after that product is purchased by a customer. Extreme case of a pull process
Zara, Spain’s answer to Italy’s Benetton
– Sells apparel with a short design-to-sale cycle, avoids markdowns.
Toyota / GM / Volkswagen, in the course notes McMaster Carr / W.W. Grainger, sell auto parts Amazon / Barnes and Noble Frozen food industry/Fast food industry/5 star restaurants Internet shopping: Webvan / Peapod
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Slide 20: SCM Strategy
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Slide 21: Mission-Strategy-Tactics-Decisions
Mission, Mission statement
– The reason for existence of an organization
Strategy
– A plan for achieving organizational goals
Tactics
– The actions taken to accomplish strategies
Operational decisions
– Day to day decisions to support tactics
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Slide 22: Life Strategy for Ted
Ted is an undergrad. He would like to have a career in business, have a good job, and earn enough income to live comfortably
Mission: Goal: Strategy: Tactics: Operations:
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Live a good life
Successful career, good income Obtain a master’s degree Select a college and a concentration Register, buy books, take courses, study, graduate, get a job
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Slide 23: Linking SC and Business Strategy
Competitive (Business) Strategy
Product Development Strategy Marketing Strategy -Portfolio of products -Frequent discounts -Timing of product introductions
-Coupons
Supply Chain Strategy
New Product Development
Marketing and Sales
Operations Distribution Service
Finance, Accounting, Information Technology, Human Resources
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Slide 24: Strategies: Product Development
It relates to Technologies for future operations (via patents) and Set of products/services Be the technology leader
IBM workstations
Offer many products
Dell computers
Offer products for locals
Tata’s Nano at $2500=100000 rupees
Production at Singur, West Bengal, India; l x w x h=3.1 x 1.5 x 1.6 meters; Top speed: 105km/hr; Engine volume 623 cc; Mileage 50 miles/gallon; Annual sales target 200,000.
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Slide 25: Strategies
Marketing and sales strategy relates to positioning, pricing and promotion of products/services
– e.g. Never offer more than 40% discount – e.g. EDLP = every day low price
» At Wal-Mart
– e.g. Demand smoothing via coupons
» BestBuy
Supply chain management strategy relates to procurement, transportation, storage and delivery
– e.g. Never use more than 1 supplier for every input – e.g. Never expedite orders just because they are late – e.g. Always use domestic suppliers within the sales season not in advance.
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Slide 26: Fitting the SC to the customer or vice versa?
Understand the customer Wishes Understand the Capabilities of your SC Match the Wishes with the Capabilities Challenge: How to meet extensive Wishes with limited Capabilities?
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Slide 27: Achieving Strategic Fit: Consistent SCM and Competitive strategies
Fit SC to the customer Understanding the Customer
– – – – – – – Range of demand, pizza hut stable Production lot size, seasonal products Response time, organ transplantation Service level, product availability Product variety Innovation Accommodating
Implied (Demand) Uncertainty for SC Implied trouble for SC
poor quality
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Slide 28: Contributors to Implied Demand Uncertainty
Commodities Detergent Long lead time steel
Price Low
Customized products High Fashion Clothing Emergency steel,
for maintenance/replacement
Customer Need Implied Demand Uncertainty
Responsiveness High
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Short lead times, product variety, distribution channel variety, high rate of innovation and high customer service levels all increase the Implied Demand Uncertainty
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Slide 29: Understanding the Supply Chain: Cost-Responsiveness Tradeoff
Responsiveness (in time, high service level and product variety)
High
Efficiency frontier
Inefficient Impossible
Fix responsiveness
Inefficiency Region
Low
High
Low
Cost in $
Why decreasing slope (concave) for the efficiency frontier?
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Slide 30: Achieving Strategic Fit: Wishes vs. Capabilities
Responsive (high cost) supply chain
f e o F it n Zo egic t tra S
Lunch buffet <Low margin>
Gourmet dinner <High margin>
Responsivenes spectrum
Efficient (low cost) supply chain
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Certain demand
Implied uncertainty spectrum
Uncertain demand
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Slide 31: Loosing the strategic fit: Webvan
Webvan started a merger with HomeGrocer in Sept 2000 and completed in May 2001. Declared bankruptcy in July 2001. Why?
– “Webvan was so behemoth that could deliver anything to anyone anywhere that it lost sight of a more mundane task: pleasing grocery customers day after day”. – Short to midterm cash mismanagement. Venture capital of $1.2 B run out. – Merger costs: duplicated work force, integration of technology, realignment of facilities.
Peapod has the same business model but more focused in terms of service and locations. It actually survives with its parent company Royal Ahold’s (Dutch Retailer) cash.
– Delivers now at a fee of $6.95 within a day.
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Slide 32: Top 10 Retailers Reported in 2008 – First 4
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Source www.deloitte.com/dtt/cda/doc/content/dtt_2008globalpowersofretailing.pdf
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Slide 33: Top 10 Retailers Reported in 2008 – First 5-10
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Slide 34: Big retailers’ Strategy
Wal-Mart: Efficiency Target: More quality and service Carrefour: International, ambiance K-Mart: Confused.
– Squeezed between Target and Wal-Mart – Reliance on coupon sales – Do coupons stabilize or destabilize a Supply chain?
K-Mart and Sears merged in November 2004. Now called Sears Holdings.
» K-Mart gets cash » Sears gets presence outside malls
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Slide 35: Other Factors
Multiple products in a SC. Multiple customers for a given product
– Separate supply chains or Tailored supply chains
» e.g. Barnes and Noble: Retailing and/or e-tailing
– Product and/or customer classes
» e.g. UTD library loans books for 6 months (2 weeks) to faculty (students) » Customer segmentation by pricing
Competitors: more, faster and global
» UTD online programs compete globally
Product life cycle (shortening)
– SCM strategy moves toward efficiency and low implied uncertainty as products age
» e.g. Air travel is becoming more efficient
e.g. Southwest airlines lead the drive for efficiency e.g. Airbus announced A380 accommodating 555-800 people on Jan 17, 2005.
» e.g. Flat screen TV producer of AU Optronics of Taiwan was looking for ways to make its SC more efficient in June 2004.
– Replacement sales
» Selling to replace broken units.
e.g. AC replacement is about 50% of the market.
– Macroeconomic factors for visibility
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» Forecasting Home Depot sales from S&P 500 price index.
Positive correlation is detected.
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Slide 36: Achieving Strategic Fit over a Lifecycle
Responsive (high cost) supply chain
f e o F it n Zo egic t tra S
Efficient (low cost) supply chain
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Certain demand
Uncertain demand
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Slide 37: Integration
Integration is the central theme in SCM Building synergies by integrating business functions, departments and companies
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Slide 38: Strategic Scope
Suppliers Manufacturer Distributor Competitive Strategy Product Dev. Strategy Supply Chain Strategy Marketing Strategy Retailer Customer
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Slide 39: Supply Chain Drivers and Obstacles
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Slide 40: Drivers of Supply Chain Performance
How to achieve Efficiency Responsiveness Supply chain structure
Inventory
Transportation
Facilities
Logistical Drivers
Information
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Sourcing
Pricing
CrossFunctional Drivers
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Slide 41: 1. Inventory
Convenience: Cycle inventory
– No customer buys eggs one by one
Unstable demand: Seasonal inventory
– Bathing suits – Xmas toys and computer sales
Randomness: Safety inventory
– 20% more syllabi than the class size were available in the first class – Compaq’s loss in 95
Pipeline inventory
– Work in process or transit
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Slide 42: Little’s law
Long run averages = Expected values I=R.T I=Pipeline inventory; R=output per time=throughput; T=delay time=flow time
10/minute Spend 1 minute
Flow time? Thruput? Pipeline (work in process) Inventory?
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Slide 43: 2. Transportation
Air Truck Rail Ship Pipeline Electronic
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Slide 44: 3. Facilities
Production
– Flexible vs. Dedicated – Flexibility costs
» Production: Remember BMW: “a sports car disguised as a sedan” » Service: Can your instructor teach music as well as SCM? » Sports: A playmaker who shoots well is rare.
Inventory-like operations: Receiving, Prepackaging, Storing, Picking, Packaging, Sorting, Accumulating, Shipping
– Job Lot Storage: Need more space. Reticle storage in fabs. – Crossdocking: Wal-Mart
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Slide 45: 4. Information
Role in the supply chain
– The connection between the various stages in the supply chain – Crucial to daily operation of each stage in a supply chain
» E.g., production scheduling, inventory levels
Role in the competitive strategy
– Allows supply chain to become more efficient and more responsive at the same time (reduces the need for a trade-off) – Information technology
» Andersen Windows
Wood window manufacturer, whose customers can choose from a library of 50,000 designs or create their own. Customer orders automatically sent to the factory.
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Slide 46: Characteristics of the Good Information
Information Global Scope Coordinated Decisions Supply Chain Success
Strategy
Information Accurate? Accessible? Up-to-date? In the Correct form?
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Analytical Models
$$$
» If not, database restricted ability. How difficult is it to import data into SAP?
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Slide 47: Quality of Information
Information drives the decisions:
– Good information means good decisions
IT helps: MRP, ERP, SAP, EDI Relevant information? How to use information?
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Slide 48: Information Technology in a Supply Chain: Legacy Systems
Strategic
Planning
Operational
Supplier
Manufacturer
Distributor
Retailer
Customer
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Slide 49: Information Technology in a Supply Chain: ERP Systems
Strategic
Planning
Operational
Potential
ERP
ERP
Potential
ERP
Supplier
Manufacturer
Distributor
Retailer
Customer
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Slide 50: Information Technology in a Supply Chain: Analytical Applications
Strategic
SCM
Planning
Supplier Apps
APS
Transport & Inventory Planning Transport execution & WMS
Dem Plan
Operational
MES
CRM/SFA
Supplier
Manufacturer
Distributor
Retailer
Customer
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Slide 51: ERP Systems
Wider focus Push (MRP) versus Pull (demand information transmitted quickly throughout the supply chain) Real-time information Coordination and Information sharing Transactional IT Expensive and difficult to implement
– About 25% of ERP installations are cancelled within a year – About 70% of ERP installations go over the budget
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Slide 52: IT Push
500 400 300 200 100 0 1965 1973 1981 1989 1997
IT investment($B)
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Slide 53: Supply Chain Software Push See Top 100 under /articles.html
Source Kanakamedala, Ramsdell, Srivatsan (2003). McKinsey Quarterly, No 1.
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Slide 54: 5. Sourcing
Role in the supply chain
– Set of processes required to purchase goods and services in a supply chain – Supplier selection, single vs. multiple suppliers, contract negotiation
Role in the competitive strategy
– Sourcing is crucial. It affects efficiency and responsiveness in a supply chain – In-house vs. outsource decisions- improving efficiency and responsiveness
» TI: More than half of the revenue spent for sourcing. » Cisco sources: Low-end products (e.g. home routers) from China.
Components of sourcing decisions
– In-house versus outsource decisions – Supplier evaluation and selection – Procurement process:
» Every department of a firm buy from suppliers independently, or all together.
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EDS to reduce the number of officers with purchasing authorization.
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Slide 55: 6. Pricing
Role in the supply chain
– Pricing determines the amount to charge customers in a supply chain – Pricing strategies can be used to match demand and supply
» Price elasticity: Do you know yours?
Role in the competitive strategy
– Use pricing strategies to improve efficiency and responsiveness – Low price and low product availability; vary prices by response times
» Amazon: Faster delivery is more expensive
Components of pricing decisions
– Pricing and economies of scale – Everyday low pricing versus high-low pricing – Fixed price versus menu pricing, depending on the product and services
» Packaging, delivery location, time, customer pick up » utdallas.edu/~metin Bundling products; products and services
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Slide 56: Considerations for Supply Chain Drivers
Driver Inventory Transportation Facilities Information Sourcing Pricing
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Efficiency Cost of holding Consolidation Consolidation / Dedicated Low cost/slow/no duplication Low cost sources Constant price
Responsiveness Availability Speed Proximity / Flexibility High cost/ streamlined/reliable Responsive sources Low-high price
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Slide 57: Major Obstacles to Achieving Fit
SC is big:
– Variety of products/services – Spoiled customer – Multiple owners (Procurement, Production, Inventory, Marketing) / multiple objectives – Globalization
Local optimization and lack of global fit
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Slide 58: Major Obstacles to Achieving Fit
Dealing with Multiple Owners / Local Optimization
– Information Coordination
» Information sharing / Shyness / Legal and ethical issues
– Contractual Coordination
» Mechanisms to align local objectives with global ones
– Coordination with (real) options
» Rare in the practice
– Without coordination, misleading reliance on metrics:
» Average safety inventory, Average incoming shipment size, Average purchase price of raw materials, Revenue
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Slide 59: Major obstacles to achieving fit
Instability and Randomness:
– – – – Increasing product variety Shrinking product life cycles Customer fragmentation: Push for customization, segmentation Fragmentation of Supply Chain ownership: Globalization
Increasing implied uncertainty
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Slide 60: Common problems
Lack of relevant SCM metrics: How to measure responsiveness?
» How to measure efficiency, costs, worker performance, etc?
Poor inventory status information
» Theft: Major problem for furniture retailers. » Transaction errors: Retailers with inaccurate inventory records
for 65% of SKUs
» » » » » Information delays, dated information, incompatible info. systems Misplaced inventory: 16% of items cannot be found at a major retailer Spoilage: active ingredients in the products are losing their properties Product quality and yield Lack of visibility in SCs
Do you know the inventory your distribution centers hold? Do you know the inventory your fellow retailer holds?
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Slide 61: Common problems
Poor delivery status information
» Not knowing the order status
Poor IT design
» Unreliable, duplicate data » Security problems: too much or too little
Ignoring uncertainties
– “The flight from uncertainty and ambiguity is so motivated that we often create pseudocertainty.”
– Nitin Nohra, HBR February 2006 issue, p.40.
Internal customer discrimination
» Giving lower priority to internal customers than external customers
Poor integration Elusive inventory costs
» Accounting systems do not capture opportunity costs
SC-insensitive product design
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Slide 62: Summary
Supply Chain Introduction Competitiveness / Business strategy / SCM strategy Components
» Inventory, Transportation, Facilities, Information, Sourcing, Pricing
Challenges
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Slide 63: Seven Eleven Japan (SEJ)
A Case Study
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Slide 64: Factual Information on Seven Eleven Japan (SEJ)
Largest convenience store in Japan with market value of $95 B. The third largest retail company in the world after Wal-Mart and Home Depot. Established in 1974. In 2000, total sales $18,000 M, profit $620 M. Average inventory turnover time 7-8.5 days. Stock value increased by 3000 times from 1974 to 2000. In 1985, there were 2000 stores in Japan, increasing by 400-500 per year. Return on equity 14% over 2000-2004. A SEJ store is about the half the size of a US 7-eleven store, that is about 110 m2. Sales:
– Products
» 32.9% Processed food: drinks, noodles, bread and snacks » 31.6% Fast food: rice ball, box lunch and hamburgers » 12.0% Fresh food: diary products » 25.3% Non-food: magazines, ladies stockings and batteries. – Services: Utility bill paying, installment payments for credit companies, ATMs, photocopying
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Slide 65: More on SEJ
More factual info: Average sales about twice of an average US store SKU’s offered in store: Over 3,000 (change by time of day, day of week, season) Virtually no storage space No food cooking at the stores Japanese Images of Seven Eleven:
Convenient Cheerful and lively stores Many ready made dinner items I buy Famous for its great boxed lunch and dinner - On weekends, when I was single, I went to buy lunch and dinner
SC strategy:
Micro matching of supply and demand (by location, time of day, day of week, season)
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Slide 66: Seven Eleven - Number of Stores
6000 5000 4000 3000 2000 1000 0 85
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1999: 8,027 2004: 10,356
Number of Stores
86
87
88
89
90
91
92
93
94
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Slide 67: Seven Eleven - Net Sales (B Yen) Sales 1,963 B Yen in 2000
1400 1200 1000 800 600 400 200 0 85
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Net Sales
86
87
88
89
90
91
92
93
94
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Slide 68: Seven Eleven - Pre tax Profit (B Yen)
100 90 80 70 60 50 40 30 20 10 0 85
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Profit
86
87
88
89
90
91
92
93
94
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Slide 69: Seven Eleven - Inventory turnover (days)
14 12 10 8 6 4 2 0 85
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Inventory
86
87
88
89
90
91
92
93
94
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Slide 70: Information Strategy
Quick access to up to date information (as opposed to data): In 1991, SEJ implemented Integrated Service Digital Network to link stores, headquarter, DCs and suppliers
Customer checkout process
– Clerk records the customer’s gender, (estimated) age and purchased items. These Point of Sales (POS) data are transmitted to database at the headquarters. » Store hardware: Store computer, POS registers linked to store computer, Graphic Order Terminals, Scanner terminals for receiving
Daily use of the data
– Headquarters aggregate the data by region, products and time and pass to suppliers and stores by next morning. Store managers deduce trend information.
Weekly use of the data
– Monday morning, the CEO chairs a weekly strategy formulation meeting attended by 100 corporate managers. – Tuesday morning, strategies are communicated to Operation Field Counselors who arrive in Tokyo on Monday night. – Tuesday afternoon, regional elements (e.g. weather, sport events) are factored into the strategy. Tuesday nights, field counselors return back to their regions.
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Slide 72: Information Analysis of POS Data
Analysis of
– – – – Sales for product categories over time SKU (stock keeping unit) Waste or disposal 10 day (or week) sales trend by SKU
Sales trends for new product – In the early 1990s, half-prepared fresh noodle sales were going up, new fresh noodle products were quickly developed Sales trend by time and day
– Different sales patterns for different sizes of milk at different times of the day results in rearrangement of the milks in the fridge. Extreme store micromanagement.
» Let us speculate: Flavored milks are put in front of the pure milks in the evening (or the morning?).
List of slow moving items – About half of 3000 SKUs are replaced by new ones every year
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Slide 73: Facilities Strategy
Limited storage space at stores which have only 125-150 m2 space – Frequent and small deliveries to stores Deliveries arrive from over 200 plants. Products are grouped by the cooling needs
– Combined delivery system: frozen foods, chilled foods, room temperature and hot foods. – Such product groups are cross-docked at distribution centers (DC). Food DCs store no
inventory.
– A single truck brings a group of products and visits several stores within a geographical region – Aggregation: No supplier (not even coke!) delivers direct
The number of truck deliveries per day is reduced by a factor of 7 from 1974 to 2000. Still, at least 3 fresh food deliveries per day. Goods are received faster with the use of scanners. Have many outlets, at convenient locations, close to where customers can walk Focus on some territories, not all: When they locate in a place they blanket (a.k.a. clustering) the area with stores; stores open in clusters with corresponding DC’s.
– 844 stores in the Tokyo region; Seven Eleven had stores in 32 out of 47 prefectures in 2004. No stores in Kobe. – Success rate of franchise application <= 1/100
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Slide 74: The Present and the Future
Is food preparation a good idea at 7-eleven locations?
– e.g. Compare microwave heating vs. salad preparation.
Why SEJ does not allow direct delivery from suppliers to retailers? Point out which of the following strategies can also be used in US (or Taiwan)
– Information strategy – Facilities strategy
Discuss the differences between the Japanese and US (or Taiwanese) consumers with regard to
– Frequency and amount of grocery purchase – Use of credit cards vs. cash for purchase – 7-eleven inventory turnover rate is 50 in Japan and 19 in the USA.
7-eleven growing rapidly in the US so it aims to be a web depot in both the US and Japan. Does this make sense from a supply chain perspective? – Cost vs. Responsiveness – Business strategy What is the risk of micro-matching strategy? No direct deliveries to SEJ, what is the potential risk of this strategy if used in the USA?
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Slide 75: Deloitte 2008 Global Retailers Survey
Excerpts from
www.deloitte.com/dtt/cda/doc/content/dtt_2008globalpowersofretailing.pdf Downloaded on Jan 30, 2008.
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