1. CVS as a retailer and pharmacy does not manufacturers its tangible products but acquires them from different venues. Some which use assembly-line flow, such as a bottle water company, and other might use the batch flow, such as a pharmaceutical company. Since a majority of the items CVS sells are not customized and sold at a high volume, the assembly line product flow fits best.
2. CVS uses MTO (make-to-stock) process to fulfill customer needs. The company focuses on inventory management to ensure specific products are ordered and replenished to meet the demand of the customer and improve its service level.
3. Due to the fact that CVS stocks and sells several general items throughout its stores, most products are manufactured using continuous and assembly line product flows and are make-to-stock. This allows CVS to provide faster service to their customers from available stock at lower costs. CVS falls into the Continuous and Assembly Line/Make-to-Stock cell on Table 4.3 the Process Characteristics Matrix (pg 71).
4. Some of the factors influencing the process selection of CVS are the market conditions and cost. More specifically, their target market and economic status of the surrounding areas, and the most cost-efficient process to carry out operations. CVS obviously wants to stock products that customers in the surrounding areas are going to want to purchase. To a certain extent all CVS’s will stock a majority of the same products, however, it is the job of each individual store manager to select and manage the product-process strategy. He bases these choices on incoming customer assumptions as well as using information technology to assess inventory and how much of the items are being sold. From this data, he must decide which process selection is best. CVS’s process selection decision must also take into account the volume and standardization of the products. Most CVS stores stock very little, if any, low volume, highly customized products because they tend to be more unique and appeal to a minority of customers. This is where they have to consider competition, because there is most likely another store people will consider for customized items before thinking of CVS. Instead CVS stocks high volume, standardized products that are easily made and readily available. From this, we can understand why CVS uses the assembly line method for their operation. The assembly line method requires more initial capital but uses relatively inexpensive, low-skilled workers. The last consideration is technology, and it’s really not likely that a new process or product market is going to come along that would make their method obsolete. All of these factors come into play when CVS is deciding on what process is most efficient. In conclusion, the assembly line process is best for CVS because they keep their costs lower and can appeal to a wider variety of customers.
5. Since CVS is a chain of pharmacies, in their stores they sell very general types of products from over-the-counter medicines to stationary items such as notebooks and pens. Since there are such a wide variety of these general items in the store, they do not employ any of the mass customization processes that many larger vendors would use. The products sold at CVS usually come from third party vendors who would produce the items in a large quantity and high volume rather than small batches or a lot size of one. Therefore, since CVS does not manufacture any products, the mass customization methods do not apply to their operation or the industry as well.
http://info.cvscaremark.com/
2. CVS uses MTO (make-to-stock) process to fulfill customer needs. The company focuses on inventory management to ensure specific products are ordered and replenished to meet the demand of the customer and improve its service level.
3. Due to the fact that CVS stocks and sells several general items throughout its stores, most products are manufactured using continuous and assembly line product flows and are make-to-stock. This allows CVS to provide faster service to their customers from available stock at lower costs. CVS falls into the Continuous and Assembly Line/Make-to-Stock cell on Table 4.3 the Process Characteristics Matrix (pg 71).
4. Some of the factors influencing the process selection of CVS are the market conditions and cost. More specifically, their target market and economic status of the surrounding areas, and the most cost-efficient process to carry out operations. CVS obviously wants to stock products that customers in the surrounding areas are going to want to purchase. To a certain extent all CVS’s will stock a majority of the same products, however, it is the job of each individual store manager to select and manage the product-process strategy. He bases these choices on incoming customer assumptions as well as using information technology to assess inventory and how much of the items are being sold. From this data, he must decide which process selection is best. CVS’s process selection decision must also take into account the volume and standardization of the products. Most CVS stores stock very little, if any, low volume, highly customized products because they tend to be more unique and appeal to a minority of customers. This is where they have to consider competition, because there is most likely another store people will consider for customized items before thinking of CVS. Instead CVS stocks high volume, standardized products that are easily made and readily available. From this, we can understand why CVS uses the assembly line method for their operation. The assembly line method requires more initial capital but uses relatively inexpensive, low-skilled workers. The last consideration is technology, and it’s really not likely that a new process or product market is going to come along that would make their method obsolete. All of these factors come into play when CVS is deciding on what process is most efficient. In conclusion, the assembly line process is best for CVS because they keep their costs lower and can appeal to a wider variety of customers.
5. Since CVS is a chain of pharmacies, in their stores they sell very general types of products from over-the-counter medicines to stationary items such as notebooks and pens. Since there are such a wide variety of these general items in the store, they do not employ any of the mass customization processes that many larger vendors would use. The products sold at CVS usually come from third party vendors who would produce the items in a large quantity and high volume rather than small batches or a lot size of one. Therefore, since CVS does not manufacture any products, the mass customization methods do not apply to their operation or the industry as well.
http://info.cvscaremark.com/
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