Supply chain management spans many functions and processes, including demand planning, sourcing, merchandising, supplier relationship management, inventory management, inbound and outbound transportation, distribution management, and store operations (Jacobs & Chase, 2014). Costco is a company I frequently shop at and have done research over. Costco often tries to source products locally and build relationships with local suppliers. This not only benefits those they do business with, but it also reduces cost in the supply chain. Suppliers largely finance Costco’s inventories. And this is a huge competitive advantage for the company particularly given its no-frills model. Other efficiencies in the supply chain include buying products directly from manufacturers and arranging delivery to one of its 24 depots. These products then go to Costco’s warehouses using cross-docking techniques. Cross-docking is a logistics system that aims to optimize shipments to stores from distribution points with minimal storage time. This approach reduces the costs of a multi-layer distribution system (Sing, 2019).

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