Tuesday, September 10, 2013

Who orders goods and fresh foods at a 7-Eleven store in Japan?

Store manager? Headquarters officer? A part time sales associate does. This is reason why 7-Eleven of Japan is the number one in Japan. Today’s story is about procurement at a convenience store.

Seven Eleven Japan (SEJ), a convenience store company that operates 15,831 stores in Japan, has many advantages such as three times daily delivery to a store, 9 times daily freshness control, and POS. The most difference from competitors is said that a part time sales associate is in charge of procurement. Actually, sale of a store of SEJ is $1,000 a day more than that of competitors that adopt an automatic ordering system and of which a headquarters orders [1].

SEJ values a hypothesis testing approach about procurement of each goods at each store. To do exactly the approach three times a day corresponding to three times daily delivery, due to workforce limitations, a part time sales associate is needed to be responsible for procurement. SEJ delivers information about a weather forecast, events near a store, and a campaign of a product to a Graphic Order Terminal (GOT) of a store so that anyone can hypothesize customer’s needs based on the various information and can order. By POS, those who make order can also test sales ordered goods and fresh foods.

A part time sales associate has a sense of responsibility for selling ordered things because she or he orders. The sense creates a virtuous cycle that makes people expect to order salable things. I think that a positive IT investment of SEJ such as GOT and POS creates an environment that people at a store deeply focuses on hypothesizing customer’s needs of each good. However, SEJ does not intentionally build automatic ordering system even it technically can do. This fact illustrates that SEJ think that people at a store loose their sense of responsibility for selling ordered things and happiness when a hypothesis succeeds.

Graphic Order Terminal (GOT) [4]

The relationship between an order by people and IT seems like “automation with a human touch” concept, automation that allows human to supervise, of Toyota Production System. Additionally I think that an idea that a part time sales associate is in charge of procurement is similar to a multi skilled worker in Toyota.

Indeed, SEJ started its convenience store business in 1974 by cooperation with Southland, a company of 7-Eleven in the United States. However, Mr. Suzuki, a founder of SEJ, said that eventually he only  brought the logo and an accounting system from Southland. He also said that other system was built to suit a Japanese market [2]. In 1991, when Southland went bankrupt, SEJ purchased trade rights. So currently SEJ runs 8,144 stores in the United States [3].

This situation is quite similar to that between GM and Toyota in 1970’s. Nowadays SEJ imports the improved operation about a convenience store from Japan to the United States [5]. I wish to have an affordable, fresh Bento box in the United States, but working culture and population density of the United States are very different from Japan.

[1] Seven & i Holdings Co., Ltd. (May, 2009). Challenge of Seven & i. Retrieved from http://www.7andi.com/company/challenge/103/1.html
[2] Matsuura, D. (July, 2013 23). Why does Seven Eleven continue to grow?. Retrieved from http://toyokeizai.net/articles/-/15985
[3] Seven Eleven Japan. (August, 2013). The number of stores. Retrieved from http://www.sej.co.jp/company/tenpo.html
[4] Seven Eleven Japan. (n.d.). Photo gallery. Retrieved from http://www.sej.co.jp/owner/about/photogallery/approach005.html
[5] Sterngold, J. (May, 1991 9). New Japanese lesson: Running a 7-11. Retrieved from http://www.nytimes.com/1991/05/09/business/new-japanese-lesson-running-a-7-11.html?pagewanted=all&src=pm

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