Logistics and Supply chain management

RUNNING HEAD: COSTCO
Logistics and Supply chain management

COSTCO 1
Executive summary
The research report focuses on the value chain of COSTCO. It includes a brief history of the
company. The next section provides information about the characteristics of supply chain and its
relation with COSTCO. It suggests that COSTCO aligns with some of the characteristics of a
good supply chain. It includes the various sustainable practices adopted the company in respect
of its supply chain process. Additionally, it comprises of elements of supply chain and the
approaches taken by COSTCO for its effectiveness. It also focuses on the practices and
initiatives taken by COSTCO in respect to its suppliers to retain satisfied customers. The last
section provides practical recommendations to generate more sustainable practices.

COSTCO 2
Contents
Introduction......................................................................................................................................3
Brief history.....................................................................................................................................3
Supply chain....................................................................................................................................3
Sustainable practices........................................................................................................................4
Supply chain elements.....................................................................................................................5
Collaboration with suppliers/manufacturers....................................................................................6
Conclusion.......................................................................................................................................6
Recommendations............................................................................................................................6
Bibliography....................................................................................................................................8
Appendices....................................................................................................................................10

COSTCO 3
Introduction
The report is prepared on the title ‘Logistics and Supply chain management’. It is a process
involving the usage of various resources and activities to distribute products to the ultimate
customer (Christopher, 2016). The key purpose of the report is to pour light on the important
aspect of supply chain. Additionally, it provides an opportunity to upgrade the knowledge by
practically applying the managerial concept to real-life companies.
Brief history
COSTCO is an American multinational company founded in the year 1983. It is a public sector
enterprise founded by James Sinegal (Successstory, 2019). It is a fashion and retail industry
and operates in the form of discount stores (Lewis , 2019). It offers multiple variety products
including electronics, jewelry and groceries (COSTCO , 2019). It has its stores in ten countries
including Australia, Spain and Mexico.
It is assessed that COSTCO has a great market in these countries as it provides the customers
with quality products at a fine price (Farfan , 2019). It is evaluated that COSTCO has nine
stores in Australian market (Real Commercial , 2018). Additionally, it is analyzed that
COSTCO has achieved a successful position in the Australian market due to a rise in customer
demand (RetailWorld , 2019). Thus, it is analyzed that high scope in Australia as it is planning
to open more stores (Hatch , 2019).
Supply chain
Following are the characteristics of a good supply chain and its relation with COSTCO supply
chain:
1. A supply chain should be flexible to meet the need of the customers. The COSTCO
supply chain follows High-volume-low-margin strategy. It deals with selling mechanized
at a high quantity at a competitive price to gain customer satisfaction.
2. A good supply chain should be of the lowest cost (Inbound Logistics , 2016). It is
assessed that COSTCO has the advantage of low labor costs. This is because it provides
self-service option to its customers. Thus, it reduces the manual requirement within the