Analyzing Costco’s supply chain responsiveness through lean and agile strategies

Supply chain responsiveness contributes to efficient supply chain performance. Supply chain responsiveness refers to effectively and efficiently meeting customer’s needs in a timely manner. This paper considers the supply chain strategies and practices that lead to the supply chain responsiveness of Costco when compared to its major competitors, Wal-Mart and Loblaws. The evaluation and comparison of key financial performance measures as well as various statistical analyses identify the supply chain strategies that benefit Costco and its competitors. The paper presents a contribution to existing supply chain literature through the in-depth analysis conducted of different supply chain performance measures for three major retailers in Canada - Costco, Wal-Mart and Loblaws. This analysis evaluates a 23-year period from 1999 to 2021. The analysis also contributes to the existing literature on the use of supply chain strategies, such as leanness and agility in the retail industry, Costco’s practices of just-in-time (JIT) inventory management and cross-docking as well as specific characteristics of Costco’s supply chain practices. The findings of the analysis lead to the validation of assertions and propositions of earlier researchers. These include the importance of employing complementary supply chain practices together as well as a focus on aligning supply chain strategies with the company’s corporate strategy. These understandings contribute to the achievement of supply chain responsiveness by encouraging cohesion and balance amongst supply chain strategies.