Costco Supply chain: Proximity Sourcing

Production Analysis Project ProposalCostco’s SupplyChain: Proximity Sourcing
Prepared ForSubmitted By:
October 19th, 202
Costco is known forits lean and efficient supply chain management; its integral components and strategies that have led the organization to tremendous success.There are many factorsthat played a key role in Costco’s supply chain strategy. As most Costco’sitems are handled in large scales,this raises the efficiency of the company by eliminating the number of touching the product goes through,starting from the supplier until it reaches the consumer. As items are transported in pallets, fewerhuman involvement is needed as transportation equipment such as forklifts will handle it at various product deliverystages. On the other hand, stock keeping units are less managed and handled which gains Costco an agile supply chain basis.Eventhough, Costco has a strong supply chain strategy. The Covid-19 outbreak has resulted in high demand for some of theessential products and caused multiple challenges in the retailers’ supply chain.Costco has been experiencing out of stocksregularly and this is due to the major dependency of sourcing from China.As the outbreak causes a bottlenecking on today’s supply chain includingshortage of labor, pallets trucks,delays in ports, and many disruptions.Our team is proposing the possibility of Costco to have “proximity sourcing.” Proximity sourcing has proved its effective impacton the supply chain on many retailers to avoid covid disruption. We will conduct a study on the company’s ability toproximate its suppliers and build an efficient distribution-setup, tohave a responsive supply chain capable of responding to market and consumerdemand.
Project report format for reference: Costco supplychain (Proposing new strategy “proximity sourcing”)
• Title page• Table of Contents• List of tables and figures (if any)Contents1. Abstract2. Introduction (Purpose, Problems, Definitions)3. Literature review4. Models/methodologies5. Examples and results6. Discussion and conclusions7. References 8.Appendix (if any)