Costco Wholesale

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University of Liverpool (OHE) – Supply Chain Operations Management Module

COSTCO WHOLESALE CORPORATION

Presented by:Temitope O. Fagade

Project proposal and scope:
A review of Costco Wholesale Corporation key parameters in supply chain operations with a view to suggesting improvements and operational predictions for better economic impact.

28 February 2012.

TABLE OF CONTENTS

LIST OF ABBREVIATIONS AND GLOSSARY OF TERMS…………………………………………………..3

1. EXECUTIVE SUMMARY……………………………………………………………………………………………4

2. INTRODUCTION………………………………………………………………………………………………………5

3. PURPOSE & MAIN AREAS OF RESEARCH…………………………………………………………………6

4. DESCRIPTION OF THE SEPARATE AREAS………………………………………………………………….9

4.1 SC OPERATIONS PERFORMANCE & IMPROVEMENT………………………………………………..9

4.2 ISSUES AFFECTING SC & POSSIBLE SOLUTIONS……………………………………………………….9

4.3 ANALYZING THE CONTRIBUTION OF SCOM TO COMPETITIVE BUSINESS PERFORMANCE……………………………………………………………………………………………………..10

5. CONCLUSION…………………………………………………………………………………………………………..11

6. REFERENCES………………………………………………………………………………………………………………12

APPENDICES……………………………………………………………………………………………………………….14

APPENDIX 1: SWOT ANALYSIS…………………………………………………………………………………….14

APPENDIX 2: PORTER’S FIVE FORCES FRAMEWORK…………………………………………………….16

LIST OF ABBREVIATIONS AND GLOSSARY OF TERMS

|Abbreviation or term |Detailed description | |SC |Supply Chain | |SCOM |Supply Chain Operations Management | |AMEX |American Express | |EFIM |Enterprise Facility Information Management System | |ECR |Efficient Customer Response System |

1. EXECUTIVE SUMMARY

Costco Wholesale Corporation founded in 1983 by Jim Sinegal in Seatle Washington with a vision & mission “to continually provide members with quality of goods and services at the lowest possible price control inventory.” Part of their strategy include direct buying relationship that ensures an efficient & strong SC management, high standard staffing plans, high quality products at lower prices and assessable to members who are considered more loyal. Efforts are made to develop strategic options in line with these strategies while focusing on the supply chain parameters that span from order placement to receipt of goods at the warehouse and made available to customers in the warehouse shop floor using the most cost effective processes in order to ensure they support the mission of the company. By assessing Costco’s external opportunities and threats as well as the internal strengths and weaknesses (using SWOT & Porter’s Five Forces analysis), one can infer they are doing well within their industry. More options were generated to increase sales and awareness of the retail warehouses. The report concludes with recommendations for Costco to sustain it’s market edge and advance by expanding into the European & Asian markets more as their presence is still very weak in these regions as well as add other services & goods to their already existing list.

2. Introduction
Costco Wholesale Corporation founded in 1983 within the retail industry is the largest warehouse club in the world based on sales volume. A major wholesale business offering three levels of membership and the largest wholesale club operator in the US with membership/warehouse locations spread across Asia, Europe, North & South America with headquarters based in Washington, US. Their main competitors operating membership warehouses include Sam’s Club & BJ’s wholesale club. Jim...
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