Costco Logistics and Physical Distribution Management

This report explores how Costco manages its logistics and physical distribution activities, including transportation and warehouse management. It also discusses the impact of COVID-19 on Costco's distribution management and strategies for managing product leftovers.

EBU 609
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INTRODUCTION...........................................................................................................................3
Part I: General background..............................................................................................................3
Part II: How does Costco manage its logistics and physical distribution activities?.......................4
Part III: How does the COVID-19 pandemic influence the Costco’s logistics and physical
distribution management?................................................................................................................5
Distribution Management:...............................................................................................................5
Part IV: How does Costco manage the logistics and physical distribution activities of its product
leftovers?..........................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
Logistics and Physical Distribution Management is an essential aspect that allows company to
manage distribution and storing of its products and services (Froio and Bezerra, 2021). Present
report has been conducted on Costco which is a multination corporation. Present report is inclusive
of the manner in which company is managing their logistics and distribution activities along with
the impact of covid-19 pandemic on organisation distribution management. Furthermore, report
includes the way in which company manages there logistic and physical distribution activities of
their product leftovers.
Part I: General background
Costco Wholesale which is also known as Costco is performing their business operation as a
multinational corporation which is operating in the mode of membership only and big box retail
stores. This organisation is expanding their range of products gradually in which they are now
selling different type of product categories that include perishable items, electronics, furniture,
clothing, buying and more (Golpîra, Khan and Safaeipour, 2021). In this company frequently
changing inventory system is being adopted that offers them to have a good Logistic and
physical distribution management.
Part II: How does Costco manage its logistics and physical distribution
activities?
Logistic and physical distribution activities are mainly concerned with transportation of raw
material, merchandise or by products. This process also includes consumer service transportation
and logistics, order processing inventory control and more. With the help of this process
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organisation effectively engage in the activity related to storing, handling and movement of
goods within organisation and in their shipment to consumers. With the help of proper
management of logistic and physical distribution activities organisation can fulfil its objectives in
a well defined and effective manner. Mentioned below the manner in which Costco manage their
logistic and physical distribution activities is being determined:
Transportation Management:
Transportation management is an essential aspect with the help of which Costco manages
their physical and Logistic distribution activities. In this company with the help of taking use of
efficient transportation management system uses technology in order to conduct business plan
execution and optimisation of physical movement of goods. Transportation management system
displaying important role for respective organisation, as it provide users with real time tracking
and order information. It helps company to improve their consumer service by providing
visibility across supply chain.
Warehousing Management:
Warehouse management is mainly associated to oversight of operations in a warehouse it mainly
include activities related to receiving tracking and storing of inventory and providing training to
staff while managing workload planning, shaping and monitoring of movements of goods
(Kurbanova and Ashyrmyradova, 2021). Warehouse management help Costco to enhance their
inventory management by reducing inventory level and allow them to improve their order
fulfilment while making reduction in order cycle time. It has been underlined that warehouse
management make inventory management much easier faster and efficient. In order to conduct
this process efficiently company arranged their warehouse appropriately and with adaptability
organisation offer training to staff in effective manner. With the help of this, Warehouse
manages their logistics and distribution activities in effective manner. Thus according to the
above mentioned analysis it has been identified that with the help of efficient transportation and
warehouse management Warehouse manage their logistics as well as physical distribution
activities. Both of these aspects provide company to transport and store their perishable items
through which company enhance effectiveness of its physical and logistic distribution
management.
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Part III: How does the COVID-19 pandemic influence the Costco’s logistics
and physical distribution management?
It has been evaluated that do the emergence of covid-19 pandemic organisations operating
their services in Logistic and physical distribution activities get affected in number of ways
which have negative impact upon their sales and profitability. Mentioned below there are some
aspects of Costco that are been influenced because of covid-19 pandemic.
Health management of staff members and consumers:
A critical concern shared by all food associations is ensuring the delegate's prosperity and
the plan of satisfactory workforce on account of the people who might not really like to fill in
because of turmoil or Covid fear. Guarantee and keep up the strength of people working in the
food creation network during this period of crisis. In any case, keeping the scattering chain alive
by the reserve the leader’s methods is furthermore basic to fulfil the buyer needs. Keeping up the
movement of food and things all through the store network should be ensured with the
responsibility, taking everything into account. Ensuring the sureness of customers is furthermore
key objective for sterilization and security. During this period of crisis, food security is
connected with consumers permission to food instead of food openness.
Distribution Management:
It has been identified that due to the outbreak of covid-19 government put restrictions upon
movements of goods and services in order to break the chain of coronavirus. This affected pause
on Logistic and physical distribution management in an adverse manner. It has been identified
that distribution management of Costco get affected in which supply chain has been impacted.
Furthermore it has been underlined that emergence of covid-19 waves is causing regions to
randomly go into lockdown. This is creating problems in the process of transportation of goods
and services. Costco distribution management is affected due to the import of lockdown in which
company is restricted to distribute their services and products on continuous basis.
Thus, according to the above mentioned analysis it has been identified that covid-19
pandemic have negative influence upon Costco logistic and physical distribution management.
This makes company implement significant changes in their inventory management system as to
make sure that there is no wastage of their perishable items. However it has been stated that
covid-19 affected company logistic and physical distribution activities in negative ways that have
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affected organisation sales. Thus in order to overcome all the negative influences it is essential
for company to emphasize upon significant measures and strategies in order to minimise the
extent of loss that has been caused due to the emergence of covid-19.
Part IV: How does Costco manage the logistics and physical distribution
activities of its product leftovers?
There are some effective measures that have been undertaken by Costco in order to manage
their logistic and physical distribution activities of its product leftovers. It has been identified
that respective organisation has gradually expanded their range of products and services and now
selling number of products which is inclusive of various categories such as perishable items,
home electronics and more. These products are required to be hold for a limited time period
before discontinuing as seasonal product. In this company have undertaken significant measures
which have been underline below:
Reverse logistics:
Reverse logistic is characterized as an interaction in which merchandise are essentially
moved from their last objective to another area to recover esteem or for definite removal. In this
the item may get returned on the grounds that it does not fit to the necessities and requests of
customers or it has arrived at the finish of its administration life (Shahbari and Othman, 2021).
This process helps in improving satisfaction and loyalty of consumers while paying more
attention to faulty products and repairing of merchandise. Furthermore, it has been underlined
that Costco undertake this process by taking feedback in order to make significant improvement
by understanding the reason of product return. It has been evaluated that reverse logistics
network effectively create value by providing organisation a clear path to have understanding of
their networking and improving them before things crash. This will help company to generate
some final incomes or saving. With the help of taking advantage of reverse logistic Costco
manages their logistic and physical distribution activities of their product leftovers.
Food leftover sharing:
It has been identified that many food products such as fruits, fresh vegetables are required
to be properly handle. It has been identified that organisation effectively handle product left over.
In this with the help of food leftover sharing platform offer Costco to create value from them.
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This is one of the most important platforms which are beneficial for organisation that benefit
company supply chain economically. With the help of this process company also aim towards
improving network and enhancing their social welfare. In this company undertake advantage of
various suppliers and sponsors to conduct the process of food leftover sharing. In this Costco
share their food leftovers with the help of food left over sharing logistic networks in which they
offer fruits vegetables and other perishable items.
Thus according to the above mentioned analysis it has been identified that cross-border take
advantage of different type of measures such as reverse logistic, food left over sharing in order to
make sure that they create value from them (Zhang and Li, 2021). It not only helps company in
emphasising upon social welfare but also help them to increase their brand value and loyalty of
consumers and suppliers and market.
CONCLUSION
According to the above invention report it has been concluded that Logistic and physical
distribution activities is an essential aspect that requires management of inventory transportation
warehouse and more in effective manner however it has been identified from this report that
covid-19 had negative impact upon this operation but with the help of significant strategies such
as food left over sharing logistic and proper distribution management loss due to this pandemic
can be mitigated.
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REFERENCES
Books and Journals
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