Efficient supply chain management in Japanese convenience stores.

Walkthrough Konbini stores in Japan.

Although I have never been to an eastern country yet, there are many details and facts that I have heard about them that motivate me to save money in order to go someday to tour, party, and even study that far from home. People are incredibly caring and kind-hearted; their unique culture, art, manga, traditional architecture, technology infrastructure, delicious food, beautiful landscapes, and something that I have strongly needed since I arrived in Valencia to study for the Master in Business, Product, and Service Management: Accessible 24-7 stores to get goods when craving for something: anything, anytime, anywhere.

Convenience stores, or Konbini “コンビニ” as are known by the locals, are based on U.S. convenience stores like 7-Eleven (a company that also operates in Japan), but in combination with the Japanese concept of Kaizen “改善” (continuous improvement). ¹ To satisfy most of the needs of the Japanese, Konbini stores like 7-Eleven Japan rely upon proper synchronization, organization, and clock-like precision to keep their giant network of stores working properly. This paper aims to provide an overview of the supply chain management of 7-Eleven Japan.

Japan is a fast-moving country that greatly values convenience ² and Japanese Konbini take the convenience factor to a whole new level. They typically offer a variety of services. Bill payments, atm machines, money transfers, parcel shipping, clean and free restrooms, tickets for events, medicine, xuxes, seasonal & limited-time offer goods, tobacco, soft drinks, alcoholic beverages, and even clothing items specifically selected for assisting those who find themselves in a pinch, such as an office worker who spilled sauce on his work shirt, or the high school student who stepped in a puddle and would rather wear dry, fresh socks throughout the day.

Display of Bento (弁当) boxes of Traditional Japanese Food In a Konbini Store.

The success of Konbini stores in Japan has everything to do with its distribution network, store (warehouse) layout, just-in
time inventory and replenishment policy, and state-of-the-art information systems. For the distribution network, 7-Eleven Japan seeks to obtain a micro-balance between supply and demand through regional, seasonal, and daily products. Also, 7-Eleven Japan Konbini tends to open many stores in a concentrated manner, conquering the market. Close-to-each-other stores enable to reduce transportations costs.

Secondly, 7-Eleven Japan tries to keep inventory expenditures proximate to zero. They count on a vast fleet of small and medium-sized refrigerated vans that are constantly on the move in order to keep every store fully stocked. Stores are replenished at least three times a day. (Abdurakhmonov, 2018). For this, the use of information systems and data helps to maintain better the supply and demand of the stores.

Thirdly, another critical factor for the success of Konbini, like 7-Eleven in Japan, is the speed and efficiency that the supply chain flows. When a store places an order, it is transmitted straight away to the supplier and the D.C. Suppliers base their forecast on the actual customer data provided by Information Systems. Then, orders then are sent by truck to D.C.s in what they call a ‘combined distribution system’. Which categorizes by product type and temperature in each area. (Abdurakhmonov, 2018).

Apparently, Konbinis in Japan are awesome and have a well-structured supply chain coordination, which is aimed toward maximizing the overall supply chain surplus and the convenience of the Japanese people.

¹ – https://ebrary.net/1074/political_science/convenience_stores_shelf_life_logistics_behind_loss.

² – Statista (December 14, 2021). FMCG in Japan – statistics & facts. Taken from https://www.statista.com/topics/7734/fmcg-market-in-japan/#topicHeader__wrapper.

³ – Abdurakhmonov, A (December 18, 2018). Supply chain analysis of Seven-Eleven Japan. Taken from https://www.researchgate.net/publication/332864174_Supply_chain_analysis_of_Seven-Eleven_Japan.

Logistics behind the most valuable whiskey in the whole west: Jack Daniel’s.

Jack Daniel’s Old No. 7 Whiskey bottle on a barrel.

-‘Sip… Sip… Ahhhhhhhhhhhh! That’s a fine taste!’ In terms of brand value in millions of dollars, Jack Daniel’s had the most valuable spirits brand in the western world in 2021, only overcome by Chinese super giant producers of baijiu spirits, like Kweichow Moutai or 宜宾五粮液股份有限公司. ¹

Jack Daniel’s was founded in 1875 in Lynchburg, Tennessee, and it is still produced over there. Every single drop of Jack Daniel’s Tennessee Whiskey sold in the 160 countries where is present, comes from that small city in Tennessee. Ironically, Lynchburg is a dry city, meaning that no alcoholic beverages can legally be sold. But, how does Jack Daniel’s do to be present in many countries with only one production plant in the world?

Part of the success is because Jack Daniel’s has persistently marketed its whiskey through advertisements, tours in the distillery, sauces, and even a line of Jack Daniel’s clothes produced by Wrangler. They aim to employ images of the rural and the Lynchburg locals in order to explore a romanticized past. The focus on a slower pace, social coherence, and community values correspond to an agrarian ‘south’ that served as an exponent of anti-modernity. ² Jack Daniel’s, and Lynchburg have become an international tourist destination, and the brand is more iconic than ever, just like their square bottles that reduce space-waste when transporting it.

Did you know that you can purchase a barrel of Jack Daniel’s full of whiskey, which includes 52 gallons (200 liters or 250 bottles of the Old No. 7), an engravement, and a lovely customizable silver medallion? It’s just $10,000 USD ³

Its international success is also due to Proper Logistics! Crown holdings Inc. once designed a special packaging for Jack Daniel’s. Since the size was custom-tailored to the shape of the bottle, the new footprint helped maximize production efficiency on the packaging lines, while significantly reducing cycle time. ⁴

Finally, Jack Daniel’s success has lots to thank for Globalization. The supply side of the market has witnessed the emergence of global brands from every corner of the developed and developing world. For instance, the American brand Jack Daniel‘s success in China and Europe has helped the company to sell more whiskey abroad than in the United States. ⁵

I recommend you this video, and an Old-Fashioned whisky with 100% Jack No. 7 😉

¹ – Statista (2021). Most valuable spirits brands worldwide in 2021, based on brand value (in million U.S. dollars). Taken from https://www.statista.com/study/23157/spirits-brands-jack-daniels-dossier/

² – Larsen, T. (2010). The Jack Daniel’s Experience: Communal Performances and the Marketing of Place. Taken from https://www.webofscience.com/wos/woscc/full-record/WOS:000284295200004

³ – Jack Daniel’s Properties, Inc. (2022). Single Barrel Personal Collection. Taken from https://www.jackdaniels.com/en-us/whiskey/single-barrel/personal-collection/inquiry-form

⁴ – Canadian Packaging (2004). Hit the road Jack! Taken from https://www.scopus.com/record/display.uri?eid=2-s2.0-2542472490&origin=inward&txGid=d1b78ddf2746b02f13492b4064d3ea51&featureToggles=FEATURE_NEW_DOC_DETAILS_EXPORT:1

⁵ – Torelli, C. & Cheng, S. (2015). Globalization, culture, and consumer behavior. Taken from https://www.scopus.com/record/display.uri?eid=2-s2.0-84954211826&doi=10.1017%2fCBO9781107706552.027&origin=inward&txGid=325b808cdd3cc279e6a29f20a882099b&featureToggles=FEATURE_NEW_DOC_DETAILS_EXPORT:1

Globalization of commerce driven by metal boxes

Did you know that steel boxes around the sea carry approximately 80% of all goods? ¹ Or that more than $4 Trillion worth of products were sent over the oceans in 2017? The video below is really interesting.

People have been transporting cargo by the sea since the beginning of time. The Arabian Sea was the first significant trade route. ² Back then, and during an extended period of time, the goods traveled in sacks, wood crates, and barrels of many different sizes; workers had to manually load and unload the cargo from the ships while paying the physical consequences.

Ancient Temple of Edfu with depictions of Egyptians and boats.

However, everything changed in 1956, when the former North American truck driver Malcolm Mclean revolutionized the cargo game by stacking 58 metal boxes on a ship that sailed from New Jersey to Houston. The standardized intermodal shipping container was born. Later in 1968, the International Standards Organisation (ISO) standardized this invention and from then on, ships started getting completely re-designed around the dimensions of Mclean’s boxes! ³

The beautiful ‘Ever Ace’, world’s biggest container ship with a capacity for 23,992 standard containers.

Containerization (Containers + Standardization + Globalization) has become the most cost-effective way of transporting consumer goods and commodities cargo over vast distances. Nowadays is more accessible, cheaper, and faster for large companies to manufacture their products on the other side of the world, like Colombia or Bangladesh, because shipping has become so cheap. The global supply chain has lots to thank to Mr. Mclean. According to the Economist, “the shipping container has been more of a driver of globalization than all trade agreements in the past 50 years together.”⁴

In Bogotá, for example, we can get ready to date someone by using a French perfume and wearing a great-looking Italian suit. Arrive in a German manufactured car to go to a pure Mexican food restaurant, drink ‘gringo’ whisky there, and use Chinese cellphones to order a reefer container full of Spain’s olives; we can also track the olive’s movement using RFID codes and pay via digital transactions. Containers are even artistic and are incrusted in structures as ‘art performances and pieces’.

Art Piece ‘Incrustation’ in Bogotá, created by Colombian Artist Alejandro Sanchez.

• ¹ – Statista (2022). Container shipping – statistics & facts​. Taken from https://www.statista.com/topics/1367/container-shipping/#topicHeader__wrapper
• ² – North American Marine Environment Protection Association (2018). The History of Maritime Industry. Taken from https://namepa.net/wp-content/uploads/2018/08/Lesson-3-The-History-of-the-Maritime-Industry.pdf
• ³ – IncoDocs (2018). The History of the Shipping Container created in 1956. Taken from https://incodocs.com/blog/history-of-shipping-container-1956-world-trade/#:~:text=The%20intermodal%20shipping%20container%20was,quickly%20and%20efficiently%20as%20possible.
• ⁴ – The Economist (2013). The humble hero. Taken from https://www.economist.com/finance-and-economics/2013/05/18/the-humble-hero

What is behind the Valencian Falles?

It has been a week since many people at Valencia, and its surroundings, saw incredible fireworks while the streets of the city were getting ‘completely’ burned. La Cremà, the last scheduled event for this Valencian traditional celebration called The Falles, consists of setting on fire multiple monuments across Valencia crafted with wood, cardboard, wax, and other flammable materials.

Many sculptors, artists, artisans, and painters spend countless days building these grand monuments, or Ninots, and giving them color and life. The Ninots are placed in many popular streets and then on that one last day, after a lot of planning and hard work, they are burned down. It is emotional and fantastic; undoubtedly the most epic bonfires I’ve ever seen.

For more than two weeks, the cultural exhibition and a party atmosphere take on people’s frame of mind (and streets). Loud firecrackers are exploited everywhere from the first day until the last. Crowds gather to admire Falleras and the Falleros, the floral offerings, the musical and gastronomical experience, and of course the monuments and their fire.

Even while raining, bonfires, firecrackers, and fireworks caused a lot of spectacle and joy to visitors at The Falles 2022, but they also caused a lot of mess and trash, as expected. So how does a city plan and prepare to receive millions of mortals while keeping the streets clean and the mess in control during the celebration? Proper Logistics. 

The Plaza del Ayuntamiento of València, a day of ‘Mascletà‘. 2019. FERNANDO BUSTAMANTE.

Fireworks and Firecrackers: Distribution, Supply, and Control. 

The pyrotechnic culture is very rooted in Valencia. The passion for fire is evident. Children from 8 years up can purchase and explode many products. Fireworks, firecrackers, and ‘Tracas’ have always been an essential factor at the Valencian Falles, in all of its acts. The Nit del Foc, one of the most exciting events of this traditional celebration, displayed non-stopping pyrotechnics that lasted 20 minutes for the 2022 year and involved 1.500 kg of gunpowder.

La Mascletà, another important show of the Valencian Falles, takes place every day from the opening to the closing of the Falles. From 2 pm at the Plaza Del Ayuntamiento, very noisy and rhythmic compositions are shot for the festive reasons. For each Mascletà of 2022, 120 kg of gunpowder were exploited. There were 20 this year.

Who supplies all of this gunpowder to the public and the private? Who pays? Where are gunpowder products manufactured? How is the actual international situation affecting Fallas and the fireworks distribution? This video of Luis Oria Domenech, a UPV professor can give you a great overview of the pyrotechnics in Valencia.

Cleaning:

Crowds of people gathering for a traditional celebration usually implies having fun and leaving ‘horde tracks.’ A comeback after a pandemic calls for a party. And when people are partying, usually there is euphoria and ecstasy. How is the city cleaned every day and prepared for the next round?

A history-record budget could help. Good planning, organization, and deployment of a cleaning program is extremely helpful as well. A little rain, as we experienced during Falles 2022, is just as favorable.

Security: Police officers and firemen

The firemen are extremely vital when a place (or a Ninot) is in fire. Just like the police officers when there are multitudes drinking alcohol and throwing fireworks around. This article explains the result of the 2022 challenge in these topics.