Every supply chain system always has a lot of stake holders associated with it. Be it the
raw material supplier, the manufacturer, the distributor or the retailer, everyone runs a risk
of trusting on its predecessor in the chain for its own day to day operations. What has been
presented in the case is a classic example of strategic alliance where the production by the
manufacturer is in perfect synchronization with the sales by the retailer.
According to our analysis, both Kimberly-Clark and Costco benefited from the alliance.
Although it seems the alliance greatly favored Costco, in reality Kimberly-Clark also
saved a lot of operational costs. In the long run it makes Kimberly-Clark a more
dependable and trusted vendor in the market. Robust supply chain management has given
Kimberly-Clark a strong competitive advantage over a period. (Case, p.182) During this
alliance Kimberly-Clark handheld Costco and made the supply chain process very easy for
them.
One of the major issues addressed by the parties involved in the case is inefficiency in the
supply chain when the supplier leaves the judgment of making an order entirely on the
retailer. Incorrect forecasts leave the supplier in the dark and lead to over production at
times of low demand and under production of supplies during times of high demand. These
issues arise as the supplier is unaware of the market trends. Kimberly-Clark focused
extensively on having a smooth running supply chain and invested in Vendor Managed
Inventory. Now, Kimberly-Clark oversees and pays for everything associated with the
