Everything you Need to Know About Procurement from a Trip to 7-Eleven

Did you know you can learn everything you need to know about procurement from a simple trip to 7-Eleven? Case in point: A few weeks ago, while I was getting gas at my local 7-Eleven, I noticed an ad for a hot dog combo deal posted on the pump.

It got me thinking about the similarities between procurement and this convenience store. I even posted about these parallels on LinkedIn. And the more I thought about it, I realized that you could learn everything you need to know about procurement from a trip to 7-Eleven. 

Everything You Need to Know About Procurement

There are many layers to the entire procurement process: strategic sourcing, supplier relationships, comparing vendors, value evaluation, needs assessments, contracts, negotiations—the list goes on. Who knew you could find examples of these same processes at your local 7-Eleven and from a hot dog ad, no less. But it’s true!

7-Eleven’s hotdog selections, in particular, have more complexity than one might think. Far from your average Oscar Meyer Weiner with plain yellow mustard, you have far more going on at this quick stop.

Strategic sourcing, supplier relationships, comparing vendors, value evaluation, needs assessments, contracts, and negotiations are all baked into that simple decision of buying a hot dog for lunch. Let’s catch up on how this is far more than ketchup with these five lessons.

Lesson 1: Market Research – Know Your Options

 After seeing the ad, I knew I had a decision to make. And like any good procurement professional, before making any decision, market research is required. That means knowing my options and what else is available to me.

In this instance, I saw a Burger King across the street, and I also knew there were plenty of things I could buy for lunch besides a hot dog inside the 7-Eleven.

So, I can choose to eat here and opt for that specific hot dog ad, but there are other options. This is a perfect comparison to procurement because, in procurement, you always need to know how many vendor options you’re working with to make an informed decision. 

Lesson 2: Is the Price Point Accurate? Business Needs Assessment

Now that I have done my market research to determine my options, I have to do some value evaluation and figure out whether or not two hot dogs for 99 cents and free coffee actually seem valuable to me.

During this stage, ask yourself, is the price point accurate? Is it fitting my need (I’m hungry and need to eat something)? Why is it only 99 cents? In essence, you’re doing a business needs assessment right there on the spot. 

Lesson 3: Consolidate to One Vendor

After an initial price point value assessment, I realized that I could get everything here with the hot dog deal (all toppings plus a drink). To use procurement terminology, this vendor is giving me the package deal.

7-Eleven is bundling things up—giving me the hot dogs, throwing in mustard, ketchup, onions, sauerkraut, other fixins’, and coffee for free—as long as I pay for the hot dogs. By consolidating all my needs to one vendor (7-Eleven), I can get all I need in one place and take advantage of a package deal that gives me more for my dollar than I could get shopping around between several sellers.

Lesson 4: Assess Payment Terms

 Now, there is only one snag I ran into. It happened when I went through how to pay—another similarity to the procurement process where you must assess payment terms and conditions before purchasing. In this case, 7-Eleven wanted me to use my debit card, but I had a choice to use my Visa card and pay in 30 days. In corporations, we tend to prefer net 60 or even net 90 these days. COD might be a little too sudden…

Lesson 5: Risk Assessment

 Similar to procurement, there’s a risk assessment that you need to do, even when buying a hot dog at a local quick stop. In my mind, the process went a little like this: “Okay, Michael, there’s a Burger King across the street, and you’re about to buy a convenience store hot dog; what’s the risk factor on this?”

Naturally, I wondered, “How long have those dogs been rotating on that mini spit there?” Another thought popped up: “Has anyone ever died from one of these, like from salmonella poisoning?”

 Ultimately, I decided to go for it and snag that bundled hot dog deal. And I am happy to report that customer satisfaction was high, and no casualties ensued.

What do you think about this take on procurement processes in the real world? Join the Foundry for more interesting and thought-provoking discussions like this.