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Name Instractor Course Date Effects Of Costco’s Supply Chain And Logistics In The Company Abstract This paper considers the supply chain practices and strategies that lead to the supply chain responsiveness of Costo. The analysis also contributed to the existing literature on the use of supply chain strategies, such as leanness and agility in the real industry , Costco’s practices, and the relationship between supply chain responsiveness and efficient supply chain performance. In terms of global retail market share, Costco ranks third, behind only Walmart and Amazon. However, there is something quite peculiar about the massive retailer. Compared to other retailer, Costco makes a lot less money from each product that is sold. In 2022, the business’s average gross profit was barely 12%. That is far less than the typical retailer’s gross margin, which for department stores runs from 20% to 50%. For instance, Walmart had a 24.4% average margin in 2022. In fact, just on their $5 roasted chickens, Costco loses roughly $40 million annually. Additionally, it has fewer stores than other major retailers but does better than all of them but Walmart.

Introduction Supply chain is the network of all the people, businesses, resources, tasks, and technological advancements involved in production and distribution of goods while logistics is the thorough preparation and execution of a complex activity. The history of Costco can be traced back to 1976 in San Diego, California when a businessman Sol Prince unveiled a revolutionary retail idea. Prince Club was the first membership warehouse club in the world, providing members with unparalleled savings through effective purchasing and operational methods. Background Costco’s supply chain and logistics have played a significant role in the company’s success. Here is the evidences in which supply chain and logistics have contributed to its success. Maintain cost low and distribute savings to members. The idea was well received by the public which led to Costco’s astonishing growth. Costco had 200000 members by the end of 1984, and it quickly became the first business to go from $0 to $3 billion in sales in less than six years after its founding. In 1983, the first Costco location in seattle charged a $25 yearly membership fee. A membership today starts at $60, which, after accounting for inflation, is roughly the same as it was in 1983. The literature study supporting how Costco’s supply chain and logistics has affected the company’s success is, through the introduction of a club ware house. The origin of Costco maybe traced back to Sol Prince and his son Robert Prince, who established Prince Club in 1976. A retail warehouse club was a brand -new idea that the store unveiled. You have to be a member in order to shop there. Prince Club initially only allowed company members, who could buy a variety of supplies and wholesale goods. However , after some time, it permitted workers from nearby corporations, non-profit groups, and the public sector to join. Costco , the first membership club that welcomed non-business members, revolutionized the retail industry.

Thesis Statement The Costco Wholesale corporation, also known as Costco, started operating in Seattle, Washington, in 1983( Costco Wholesale Canada, 2020). Worldwide, Cosstco runs distribution centers in 12 nations, including Canada, the United States, Mexico, and Japan. Costco operates as a membership-based warehouse, and in order to enter and shop there, members must pay an annual membership fee .Consumer packaged goods(foods, nonfoods, and small miscellaneous items), fresh foods, warehouse ancillary(gas, pharmacy, optical, food court, hearing aids, and tire installation), and other business(e-commerce, business centers, travel, and other) make up Costco’s main product categories. The paper is guided by the provided and discussed research aims and related research issues. They contribute to a better comprehension of the connection between Costco’s supply chain strategy and supply chain responsiveness, or the capacity to effectively meet customers requests. Costco uses a number of strategies to manage their inventories. Among these are JIT and storing a small number of stockkeeping units(SKUS) in its warehouses. By using these techniques, Costco may demonstrate that it has the ability to manage its inventory well. The components of Costco’s corporate strategy increase both its complexity and competitive advantage. For the organization to work cohesively as a whole, the supply chain strategy must be in line with the corporate plan. One of the knowledge gap is that, every organization needs a contingency plan for potential risk that can not be anticipated. The most frequent risk in the wholesale industry include delivery issues, availability, supplier equity, and turnaround times. Costco also loses a supply chain when unanticipated events disrupt the flow of supply, such as the cross-relationship between suppliers.

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