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UMAMAHESWARA RAO MPE100417 7 drivers of SCM for 7-Eleven in comparison with Wal-mart
7-ELEVEN Facilities: Facilities were at 2 levels Distribution Centres (DCs) Stores DCs less in number held no inventory, served stores in its cluster Increased Efficiency as opposed to Responsiveness Stores More in number kept inventory on shelf Located in abundance and dominated the market Were more responsive than efficient. Inventory: @ DC No inventory Highly efficient Poor at responsiveness @ Stores Kept Daily Stocks Low Inventory Were efficient but not very responsive Transportation: Transportation was at two levels Vendor to DC (Vendor delivered) DC to Store (Seven-Eleven delivered) Transportation Network Design Each truck would be stocked at the DC One truck would deliver supplies to more than one store. Mode of transportation Road (Vans &Trucks were used) Rapid replenishment cycles High Frequency Provided High responsiveness as opposed to efficiency Information Technology: Information System Components Graphical Order Terminal (GOT) @ Stores WAL- MART Central DCs within a network of stores leading to aggregation of benefits. Retail stores @ steady and large demands. Retails stores fed by a single centrally located DC.

The primary purpose to buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of their value, their efficient management is critical in supply chain operations. Lower inventories Higher productivity Greater agility Fleet of 3500 self owned trucks Complete ownership of Transportation systems Moving forward, Walmart is going to even recruit drivers who will drive the trucks All trucks equipped with latest tracking equipment's and are tracked via satellite.

Around 2% of all lost sales are due to the simple fact a store has run out of an item, but 41% of lost sales are due to inventory problems

Scanner Terminals (ST) for inventory checking Store computer Processed information from GOT , ST & POS Was connected to the network Tracked inventory levels, placed orders, maintained store equipment etc. POS register Information about sale, customer details like age, sex, item of sale etc. Data was relayed to Suppliers, Distribution Centres and the Headquarters automatically. Increased both efficiency and responsiveness Sourcing: Outsourced transportation From DC to Stores to Transfleet Ltd. Risk of Fuel Price Fluctuation, Fleet Maintenance and Cost of Fleet staff was transferred. The company increased profits and reduced risk.

Gain $287 million per year by avoiding 10% lost sales Improved performance of stores by 63% Was the one who pioneered bar codes in 1984 Out-of-stock items are replenished 3 times faster than before, The out-of-stock items that have to be manually filled has been cut by 10 percent.

Pricing: Seven-Eleven offered reasonably priced products. Their market dominance allowed ease of access to the customers. Both these factors led to stable demand Thus, such pricing decision increased the efficiency of the supply chain.

Supplier scoring and assessment Process used to rate suppliers Supplier selection Choose the appropriate supplier(s) Design collaboration Work together with supplier when designing components for the final product Procurement Process placing orders and receiving orders from supplier(s) Sourcing planning and analysis Analyze spending across various suppliers, identify opportunities for decreasing cost. Procurement of goods bypassing all intermediaries Vendors selected only if they provide goods at lowest prices Significant amount of time spent in meeting vendors and understanding their cost structures Least shipping costs because of cross docking and other optimization