Development and Status Analysis of the Seven—Eleven Supply Chain

1 Seven-Eleven Company Background

Seven-Eleven Japan （SEJ），formerly named Yoke Seven Corporation，was established by Ito Yokado，one of largest chain companies in Japan，at the end of 1973.In December 1992，the company became an international chain network company with 13.59 million chain stores in 22 countries and regions around the world.By the end of 2016，SEJ had 61，554 stores in 17 countries and regions around the world，making it the worlds largest chain of convenience store groups.The success of SEJ company is mainly due to its high-quality supply chain design and management.

2 SEJ Supply Chain Features

2.1 Focus on stores in specific areas

The characteristics of the SEJ convenience store can be summarized as “not cheap，but convenient”.SEJs target customers are mainly focus on those who works morning to evening，loves convenience，and have a certain economic base.The principle of SEJs shop opening can be roughly summed up as follows：①The plot covers an area of ??about 100 square meters with a corner or strip shape；②The transportation is convenient，and the main consumer group can arrive within 10 minutes on foot；③There is no SEJ convenience store within 100 meters around and ensure that there are 1～2 SEJ convenience stores within 300 meters of the surrounding area；④Each convenience store must have a clear target population.“High-density and concentrated shops in specific regions” can ensure centralized distribution of stores in one area.The increased number of stores in a specific area can shorten the distance and time for distribution，generate economies of scale，reduce logistics costs，improve service capabilities and distribution efficiency，increase awareness in this area，effectively carry out advertising and increase customers agreement of the brand.

2.2 The logistics and distribution strategy

Convenience chain stores are not large in scale，but there are many types of products，and ordinary SEJ chain stores need to arrange about 3，000 kinds of food.Most of these products come from different suppliers，and the storage and transportation requirements are different.At the same time，the variety of goods needs to be adjusted according to the different needs of customers.This places high demands on logistics and distribution.

According to different regions and commodity groups，manufacturers and wholesalers make full use of idle land resources or low-utilization equipment，and jointly invest with SEJ to jointly manage distribution centers.The location of the distribution center is generally distributed in the central city business district 35 km，non-central city business district is 60 km.The joint distribution center conducts a unified goods collection and then distributes it to each store.The construction of joint distribution center become high-frequency sub-variety and small-batch distribution.

[Wholesaler] [Wholesaler] [Wholesaler] [Joint distribution center][Store] [Store] [Store]

Figure 1 Joint distribution

2.3 Appropriate quality control

With the increase in the number of SEJ stores and the increase in the types of goods，it is objectively required to implement differentiated logistics and distribution based on different product characteristics，then ensuring the freshness of products and timely delivery.

SEJ divides its products into four categories： frozen，refrigerated，room temperature，and warm.Freezing products such as ice cubes and ice cream are stored at -20°C and distributed 3～7 times a week.Refrigerated products such as sandwiches，dairy products，lettuce，and milk are stored at a temperature of 5°C and distributed three times a day.Normal temperature products such as instant noodles，beverages，miscellaneous goods，etc.，are stored at a temperature of 10°C and delivered seven times a week； warm food such as lunches and toasts are stored at 20°C and distributed three times a day.For different types of foods，they use insulated cars and refrigerated trucks for distribution.Multi-frequency，multi-variety and small-batch distribution can not only ensure the timely supply of goods，but also reduce logistics costs and improve distribution efficiency.

2.4 Advanced Information Management System

The huge number of suppliers and stores in the chain of convenience stores，the variety of products and the characteristics of delivering goods punctuality and preservation，determine that SEJ has a high degree of reliance on information management systems.SEJs joint distribution center is based on an advanced information management system.The information system receives regular inventory reports and demand information from convenience stores and analyzes these information and orders from different suppliers.After receiving the suppliers supply，the joint distribution center supplies the goods to each supplier according to the needs of each store in the area.To ensure timely delivery，distribution centers generally maintain a safety inventory of about 4 days.

SEJs information system collects point-of-sale data and transmits it to SEJ headquarters for data processing.Advanced information technology is the basic guarantee for strategies such as opening stores intensively in specific regions and distribution networks for joint distribution centers，and is also an important condition for SEJ chain operations.

3 Status of SEJ： building a competitive advantage for omni-channel retail

After entering 2010，SEJ faced the competitive threat of online shopping.In 2014，CEO Suzuki Minwen put forward the “omni-channel retail” strategy.The parent company integrates its various business models，invests heavily in building an inventory information integration system，accepts all store orders，integrates online and offline sales，and distributes goods in a unified manner，thereby creating a seamless shopping model that is not limited by time and space.On January 1，2015，SEJ officially launched the Omni7，a dedicated omni-channel service network.It integrates about 18，000 convenience stores，with 6 million PB products，and an online logistics center.In the distribution network，customers can purchase goods from the Internet and pick up goods at the convenience store or distribute them to their homes.It collects customer needs online，acquires customer resources，launches targeted promotional strategies，and guides customers to stores，which realize the online and offline mutual drainage.The online shopping competition has caused convenience stores to gradually lose their “convenient” competitive advantage.

SEJ integrate group resources，provide customers with a seamless shopping experience，furthering the convenience of convenience stores and eventually builds a new competitive advantage in the context of online and offline integration.

4 Establishment of SEJ Competitive Advantage

With the continuous upgrading of market strategy，SEJ continuously innovates and improves the basic business processes of sales，procurement，and distribution，ensuring the thorough implementation of market strategies.

In the process of business process reform，the companys store operation capabilities，efficient distribution capabilities，merchandise procurement and development capabilities，and supplier collaboration capabilities were cultivated.SEJ further promoted the business by continuously integrating internal and external core capabilities and modifying existing capabilities.SEJs business reform are not built overnight，but are constantly matched by the changes in market strategy and the improvement of core competencies.By continuously providing services to customers and satisfying changes in customer convenience requirements，the company has improved its ability to gain insights into market changes and provided the basis and guarantee for formulating the next stage of the market strategy.The result of the dynamic linkage of market strategy，business processes，and core capabilities is to provide customers with unique value，achieve better performance than their competitors，and continuously update SEJs competitive advantage.

References

[1]Jia，L.，Shen，Z.Analysis of logistics distribution management mode in chain convenience stores——taking 7-ELEVEn as an example[J].Journal of Anyang Institute of Technology，2017，16（03）：39-41.

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[3]Li，H.，Liu，X.Analysis and Enlightenment of Chain Business Model of “7-11” Convenience Store[J].Commercial Economy，2013，08：64-65+117.

[4]Wei，X.Construction of retail supply chain based on online and offline combination mode[D].Jinan University，2015.

[5]Zheng，B.The Establishment of Long-Term Competitive Advantage of Japanese 7-Eleven Convenience Stores[J].Commercial Economics Research，2018，3：133-136.

作者簡介

祁榮珊（1996—），性別：女；民族：回；籍貫：安徽；學(xué)歷：碩士；單位：中國海洋大學(xué)；單位所在省市：山東青島；研究方向：企業(yè)運(yùn)作與管理。