Costco Supply Chain Management Case Study

984 Words4 Pages
Motivating employees can be critical to an organization’s success. Although it may appear simple, it is often a difficult task. Meeting the needs of each employee while also ensuring the profitability of a business can become a juggling act. Motivated employees are productive employees that enhance a company’s bottom line. Many employers presume that providing employees better incentives will result in higher prices for the consumer. However, successful retail chains not only “invest heavily in store employees but also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors” (Ton, 2012, p. 1). Costco has proved that despite being a cost leader in the retail industry,…show more content…
2). When sales decrease, managers tend to focus on cutting costs by reducing staff. As a result, the remaining employees must handle more responsibilities and customer service may suffer. Although excellent customer service is a goal of many retailers, it goes to the wayside, as does an organization’s competitive advantage. This is an area where Costco differs. In fact, during the recession in 2008-2009 when the “U. S. labor market lost 8.4 million jobs” (The Great Recession, 2014), there were no layoffs at Costco. At Costco, it is considered good business. According to former CEO Jim Sinegal, “We try to give a message of quality in everything that we do, and we think that that starts with the people” (Ruggeri, 2009, p. 1). Costco’s employees are vital to the company’s success by offering excellent customer service and a providing a quality shopping experience, which is essential in ensuring high sales volume and regular customers. Furthermore, higher sales together with its innovative operations process and low mark-up, enable Costco to offer its customers basic goods and luxury items at low
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