Walgreens uses the batch product flow. Walgreens produces different types of products, in medium quantities, and some customization.
Walgreens deals with outside vendors. Because of this, they are charged slotting fees. Like supermarkets, vendors such as Coke, Pepsi and Frito-Lay, they come into stores and buy shelf space. Because shelf space is competitive, prices for product will go up, which will increase the costs for the customers.Walgreens deal directly with the manufacturers. If they want to sell products in our stores, we will give them the space by taking out the middle man, and reducing costs. We buy in bulk, pay on time, and change our sales profit margin. Our products are private labeled, which gives the company complete cost control. We store everything in our stockrooms, which they provide to each Stores. The way we do business, our sales profit margin is between 33% and 34%. We order straight from our warehouse, and everything is shipped directly to the store by our warehouse.
Make To stock is the process that most fits how our company operates. We buy products, we produce and that will find a following among our customers. Sometimes it's a product which we stock in a large quantity as long as it sells well; sometimes we buy a product which is in limited supply, sell through it, and you won't find it again.
Walgreens fall into the batch and make to stock cell in the process characteristics matrix.
Market condition and labor influence our product process selection. For example, if the new low carb diets are in the craze than we will carry a greater variety of low-carb products. If soy is the new diet of choice, we will carry more soy products. Nonetheless, each of these products has to find their way into our shelves.
Again Walgreens mission is to offer customers the best drugstore service in America. We are guided by a century-old tradition of fairness, trust and honesty as we continue to expand our store base and offer career opportunities to a fast-growing and diverse group of men and women. Our goal is to develop people who treat customers - and each other - with respect and dignity. We will support these efforts with the most innovative retail thinking, services and technology. The success we achieve will allow us to reinvest in our future and build long-term financial security for our employees and our shareholders.