Tanpin Kanri: Retail Practice at Seven-Eleven Japan

1. Briefly describe Tanpin Kanri.

Tanpin Kanri is a demand-chain management system that uses POS to identify which items are selling and which articles are shelf-warmers. It is used to replace the slow moving merchandise by different merchandises. Those new orders are predicted by employees’ hypothesis of what it is going to be sold in the future, rather than by orders of items that have been sold successfully in the past.

2. What would you do to improve it?

As the system was being improved and the problems were being resolved since it was created, there are not a lot of things that can be improved.

 One thing that can be improved is the relationship between the customers and the stores. It is necessary to use a system that collects more specific information from the customers. For example, information about products that customers would buy but the store does not offer and about things that could be changed inside the store in order to have a better buying experience.

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This information that comes from the opinion of the consumer can be combined with the information that the system already gather. This will provide a better insight of what is necessary to change in the stores, what products could be sell in the store, and what marketing strategies are necessary to implement to improve customer loyalty.

Furthermore, we suggest connecting the U.S. stores with the Japanese ones, since information sharing can always be useful. Japanese stores can learn from the U.S. stores and can also avoid problems that U.

S. stores already had.

Finally, we recommend making the system less employee-dependable. Classifying stores by similar customer demand and analyzing the information from each group of stores altogether could centralize decisions and make the system less employee-dependable. It is not recommendable to create a system where employees have to make a lot of decisions since most of the time they are not loyal to the company.

3. What are the risks associated with your suggested improvements?

Implementing improvements means spending money and also creating risks. The risk with the information collector, the first improvement, is that it could satisfy some customers while disappointing others who were satisficed before the change.

The risk with the information sharing system between Japan and the U.S., the second improvement, is that it could lead to make erroneous decisions if there is not a very deep and cautious analysis before.

Finally, the risk with the doing the system more centralized is that stores could lose their singular characteristics.