Free «Costco Operation Recommendations» Essay Paper

Costco Operation Recommendations

Costco Wholesale Corporation is one of the most outstanding retailers established in the USA that has managed to start its global influence through the international business development. In 2015, the company occupied the 18th place in the list of the most successful companies according to the Fortune magazine. Nevertheless, it is necessary to understand that leadership is not endless and there is always a room for improvement. The following discussion reveals 15 areas of improvement for Costco to gain the more competitive benefits. This way, the company will be capable of reaching a new stage in its development.


In simple words, productivity means the efficiency of the processes taken by the company aimed at creating inputs into outputs. Costco can improve its productivity by the technological support of all operations. In fact, the company should continuously keep in touch with the latest technological innovations. It is necessary for the overall leadership of the company thanks to its approach to simplify every product with the help of technology. For example, tablets and Intranet can connect managers of all stores and improve the exchange of information.

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Global Operations Management

The Global Operations Management is an approach towards the systematization and regulation of international relations and supply chain management. In terms of Costco’s performance, it is possible to emphasize that the company needs to take care of its international expansion to promote its further growth. For example, the company should think about a deeper penetration of the European market, which will focus on winning the market share in Poland, France, Belgium, Norway, and other countries. In combination with the effective strategic planning, the company will be capable of expanding its territory without any negative effects on the budget.

Project Management

The core of this concept lies in the effective initiation, planning, execution, control, and closure of the work dedicated to the specific goal. To improve the performance of Costco in terms of project management, it would be essential to focus on measuring and tracking the milestones combined with the consideration of risk management. In this way, every project will gain a clear framework and deadline, which will boost the execution of the project according to its risks and chances to succeed.

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Forecasting is a process that allows predicting the future based on the past and present facts accompanied by the analysis of trends of the specific process. Costco should reconsider the process of forecasting by looking at this process from a different point of view. For example, Costco should move from estimating the time, terms, and context of its sales to managing, reevaluating, and re-modifying the strategy according to the conditions of the market. Consequently, it will enable the company to save financial resources and spend them on the areas of improvement.


Design is a collection of the specific attributes of the company’s performance, providing it with specific competitive benefits and supporting its brand and image. Costco can use its design in several aspects to improve its overall performance and sustainability. First, the company can refresh its marketing strategy and enhance it with the new ideas and creative elements. Secondly, it is important to find a balanced approach towards the company’s design in every corner of the company’s performance according to the cultural aspects of the environment.

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The concept of quality focuses on the measure of excellence that is free from the defects and deficiencies. Costco has never had any problems related to the quality of products offered to the customers. However, there were cases, when the agencies protecting animal rights were not satisfied with the conditions, in which chicken produced eggs. It is one of the examples of the improvements that the company should consider in its performance. It means that Costco should learn more about the nature of the product to prevent any complications in its distribution.


Process improvement is a part of the company’s development that aims to achieve a specific goal lying in the enhancement of productivity, the reduction of costs, or the increase of profits. Costco currently has an appropriate system of process management. It is possible to suggest intensifying the roles of executive leadership and employee commitment to guarantee the beneficial outcomes of every process. Training and teambuilding can help to improve the efficiency of the mentioned targeted recommendations.

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In business terms, location is a geographical area selected for the distribution of products and services. Costco is known for the selection of the massive areas that can include a myriad of products that can satisfy the needs of the most demanding customers. In fact, it is possible to improve the location of the company’s stores in the future. For example, the company should not locate the store far from the city center. It also should not bother the people living in the neighborhood. In this way, the company will make it comfortable to reach the store and will inspire customers to think about the benefits they have achieved since the company placed the store.

Supply Chain

A supply chain represents a network of entities that have a direct interconnection in the process of serving the consumer. Costco can also work on the improvement of its supply chain in terms of benchmarking and partnerships. For example, benchmarking the concepts of other competitive companies working in the sphere of wholesale retailing business can become the key to Costco’s improvement. Moreover, partnerships can enhance the competitive position of Costco and reveal its potential in the collaboration with other large companies.

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This concept is a managerial function that focuses on collecting information necessary for the plan, including the company’s needs, goals, and demands. First, Costco needs to think about its strategic planning process. It means that the company should be ready to optimize its decision-making process according to the changes in both external and internal environments. Secondly, Costco should work on short-term planning by learning how to delegate tasks and speed the process of the plan’s implementation without any damage to the quality of processes.


Material Requirements Planning (MRP) is a process of planning, scheduling, and controlling used in the management of the manufacturing system. Costco should remember that it is possible to improve in the mentioned segment by ensuring the availability of all products in the warehouses. Nevertheless, it is necessary to maintain the balance by regular check of the inventory list to avoid an excessive amount of products. In this case, top management should continuously work on the approval of the inventory.

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Scheduling is a process of assigning an appropriate number of employees to the specific type of work on a daily basis. Costco has both full time and part time employees, which means that the company has successfully found the key point in formulating the team of employees. In fact, it is possible to improve the process of scheduling by using the division of labor and creating separate teams that should work on specific tasks or projects. Thus, the company will not only extend the myriad of responsibilities but also increase team spirit and improve the quality of internal processes.

Just in Time

Just in Time (JIT) is an inventory system based on the demand that regulates the delivery of materials and support items according to the need in them. To prevent the company’s materials and products from deterioration, it is necessary to create a schedule of the deliveries. For example, Costco may use Intranet to coordinate the need in products and materials and inform the suppliers. In such a way, it will be possible to save the time, space, and money that could be used to store the materials and wait for them for too long.

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Lean Management

Lean management is a managerial approach that lies in the continuous improvement of all processes aiming to enhance the overall quality and productivity. Costco has managed to prove that it has already achieved a high level of quality of its products and services. However, it is possible to think about the improvement in the sphere of quality control. For example, the company can use the latest technologies along with supervisors in order to find the gap in the performance as soon as it occurs. Therefore, reporting the problem will speed up the process of fixing the problem.


The concept of maintenance is a variety of activities aimed to conserve the functionality and the original condition of an asset. Costco should work on the improvement of this concept by encouraging teamwork maintenance accompanied by a continuous enhancement of skills and knowledge. It means that every asset will find appropriate care. 

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In conclusion, the discussion has successfully revealed the essence of every concept and its role in the performance of Costco. It has become obvious in what way the company is capable of improving its performance. Finally, every concept has a direct connection to the sphere of activity of Costco, which makes it actual to strive for the improvement in order to remain competitive. Every concept has proved that there is a room for improvement, which can enhance the competitive benefits of Costco through simple transformations and changes. Therefore, it means that every company is capable of regulating its level of competitiveness.

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