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Target Supply Chain Strategy Case Analysis

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Target Supply Chain Strategy Case Analysis

  1. 1. A  critical  analysis  of  Target’s  current  Supply  Chain   Strategy  and  Recommendations  for  improving  in   Store  Stock  levels  while  reducing  DC  Inventory. INFO  340  -  502 April  24,  2013 Josh  Nutter,  Ray  Hernandez, Brent  Triplett,  Brian  Jones,  and  Amit  Patel
  2. 2. ! ! Table!of!Contents! ! I.!Introduction!and!Background! ! II.!Topic!Analysis! ! ! Store!Locations! ! ! ! ! ! Technology! ! ! ! ! ! Competitors! ! ! ! ! ! Product! ! ! ! ! ! Vendors! ! ! ! ! ! Trends! ! ! ! ! ! Economy! ! ! ! ! ! Benchmarking! III.!SWOT!Analysis! ! ! Strengths! ! ! ! ! ! Weaknesses! ! ! ! ! ! Opportunities! ! ! ! ! ! Threats! IV.!Recommendations! ! Multi?echelon!Inventory!Optimization! ! ! ! ! ! Cross!Docking!Optimization! ! ! ! ! ! Ergonomics! ! ! ! ! ! Concentrated!Products! ! ! ! ! ! Condense!Product!Variation!by!Demographic! ! ! ! ! ! Drive!Better!In?Stock!Accuracy! ! ! V.!Works!Cited! ! ! ! ! 1
  3. 3. I.!Introduction!and!Background! Today,!Target!Corporation!is!considered!one!third!of!the!“Big!3”!in!U.S.!retailing! along!with!Wal?Mart!and!Kmart.!With!net!earnings!totaling!nearly!$3!billion!in!2012!alone! as!well!as!totaling!more!than!1,778!stores!with!361,000!employees!5.!However,!Target!has! quite!a!humble!beginning!dating!back!to!one!man!over!a!century!ago.!! ! In!1903,!John!Dayton!got!his!start!in!the!retailing!business!in!Minneapolis,! Minnesota!by!buying!shares!of!the!R.S.!Goodfellows!Company!that!had!been!recently! renting!out!his!six!story!tall!building.!Once!Dayton!had!procured!the!company!he!had!it! renamed!to!Dayton!Dry!Goods!Co.!and!the!foundation!for!Target!was!planted.!Daytons! business!thrived!in!Minneapolis,!surviving!the!Great!Depression!and!only!gaining!fiscal! strength!in!the!process.!It!was!finally!in!1962!when!Dayton!Company!opened!its!first!Target! store!as!it!started!its!move!into!discount!merchandising.!It!only!took!till!the!end!of!the!year! before!this!new!store!became!its!own!Dayton!subsidiary!company.!During!the!trial!years!of! this!new!subsidiary!there!were!only!four!stores!that!were!all!located!in!Minnesota,!but! before!the!decade!was!over!they!were!already!expanding!south,!opening!up!two!stores!in! St.!Louis,!Missouri.!In!1969,!Target’s!parent!company!Dayton!and!the!JL!Hudson!Company! headquartered!in!Detroit,!merged!together!forming!the!Dayton?Hudson!Corporation.!After! the!merger,!the!new!Dayton?Hudson!Corporation!started!a!rapid!expansion!primarily!on! the!west!coast!by!not!only!opening!new!stores!but!acquiring!stores!and!rebranding!them!as! their!own.!However,!this!rapid!expansion!was!a!little!too!much!too!soon,!with!a!lack!of! proper!management!and!experienced!executives,!the!corporation!reported!a!drop!in!sales! in!the!early!seventies.!Since!then,!the!Target!brand!has!flourished!and!has!continued!to! improve!its!footprint!well!into!the!new!century.!Being!by!and!far!the!Dayton?Hudson! Corporations!best!contributor!in!terms!of!sales!year!in!and!year!out,!this!caused!the! Corporation!to!change!its!name!in!2000!to!the!Target!Corporation!as!we!know!it!today.6! ! Over!the!half!century!since!the!Target!Stores!name!was!first!established!it!has!truly! gone!through!an!evolution!especially!regarding!their!supply!chain!and!the!way!they! distribute!their!products.!It!started!in!1969,!just!seven!years!after!the!very!first!Target! Store!opened,!when!their!first!distribution!center!opened!in!Fridley,!Minnesota!as!a!quicker! and!more!efficient!way!to!provide!the!different!stores!located!throughout!Minnesota!their! 2
  4. 4. products.!Not!too!long!after,!Target!began!modifying!its!product!placement!methods!inside! their!own!stores!by!developing!plan?o?grams.!Which!are!diagrams!or!models!that!indicate! the!proper!placement!and!disbursement!of!products!on!the!shelves!to!maximize!the!sales!of! each!product!and!product!groups.!Not!only!did!these!changes!benefit!the!stores,!it!also! made!the!shopping!experience!easier!and!more!enjoyable!for!the!consumer,!which!is! Targets!main!goal.!Continuing!to!make!things!easier!for!the!consumer,!in!1975!Target! broadened!its!visibility!by!introducing!coupons!and!sales!opportunities!into!to!the!Sunday! paper.!At!that!point!in!history,!the!world!wide!web!didn’t!exist!and!televisions!were!not!as! popular!as!today;!so!the!newspaper!was!the!main!mode!of!communication!for!the!whole!of! America,!and!getting!Target!that!kind!of!publicity!was!a!huge!stride!in!developing!the!brand! nationwide!5.!! Not!only!did!Target!under!the!Dayton!Co.!develop!better!customer!service!and! supply!chain!management!by!adding!uniqueness!to!their!company!strategy,!they!also!made! changes!in!their!management!structure.!Previously,!the!Dayton!Co.!and!their!subsidiaries! were!managed!by!the!Dayton!family,!Donald,!Wallace,!and!Douglas,!but!in!1977!the!three! brothers!stepped!down!from!their!positions!which!paved!the!way!for!new!more!qualified! leadership.!Not!long!after!the!change!in!management!the!Target!Stores!celebrated!a! company!milestone!in!1979!by!breaching!the!one!billion!dollar!number!in!annual!sales!5.!! Target!Stores!never!stop!trying!to!improve!their!effectiveness!as!retailers,!always! trying!to!be!innovative!in!any!way!the!can.!With!that,!they!look!towards!technology!to!help! them!lead!the!industry!in!customer!service!and!supply!chain!management,!and!in!1988! they!became!the!first!mass!merchandiser!to!install!UPC!bar?code!packaging!to!all!of!its! stores!and!distribution!centers.!This!is!a!system!that!each!product!a!specific!bar?code!and! corresponding!number!where!as!it!can!be!scanned!by!a!designated!scanner!automatically.! Having!these!installed!improved!Target!Stores!inventory!management!and!increased! automation!in!both!the!individual!stores!as!well!as!the!distribution!centers,!while!also! making!the!shopping!experience!more!pleasant!for!consumers!by!decreasing!the!wait!time! at!the!checkout!lane!5.! During!the!next!decade!Target!Stores!made!several!strides!to!improve!the!shopping! experience!for!the!consumer.!While!continuing!to!spread!the!Target!footprint!to!more!cities! and!states!across!the!nation,!they!began!implementing!new!methods!to!attract!more! 3
  5. 5. business.!In!1995!Target!Stores!began!offering!credit!to!its!customers!in!the!way!of!store! credit!cards!which!allow!the!customers!to!buy!products!and!pay!for!them!over!a!period!of! time.!Also!that!year,!the!first!SuperTarget!opened!in!Omaha,!Nebraska.!The!SuperTarget! made!it!more!convenient!for!shoppers!by!not!only!including!the!merchandising!from!the! retailing!department,!but!also!including!a!fresh!produce,!meat!and!dairy!department.!With! the!popularity!of!the!internet!growing,!Target!introduced!online!shopping!that!allowed! customers!to!buy!products!from!the!comfort!of!their!own!homes.!This!was!a!huge!step!in! supply!chain!management!because!it!cut!out!the!middleman,!which!were!the!actual!retail! stores,!and!shipped!from!the!distribution!centers!5.!! Since!the!turn!of!the!century!Target!Stores!have!continued!their!growth!in!the! retailing!industry!increasing!sales!year!in!and!year!out.!For!example,!they!reached!a!new! milestone!in!2005!by!exceeding!$50!billion!in!sales!for!the!first!time!in!their!history.!While! the!rest!of!the!country!suffered!through!a!severe!recession!in!the!past!few!years!Target! fulfilled!and!exceeded!its!brand!promise!to!“Expect'more.'Pay'less.”'and!we!can!only!assume! that!this!will!continue!into!the!future!5.! ! II.!Topics!Analysis! i.!Store!Locations! The!closer!stores!are!to!distribution!centers!the!better!it!is!for!inventory!levels.!With! stores!in!rural!areas,!we!may!want!to!maintain!a!larger!inventory!because!routes!may!not! cross!smaller!towns!as!often,!so!it!would!be!harder!to!deliver!the!required!goods.!Keeping! close!to!seasonal!levels!may!even!be!necessary!when!stocking!rural!stores.!With!urban! stores!our!normal!reasoning!applies,!in!that!we!still!want!a!full!inventory!but!perhaps!not! as!large!as!rural!areas.!! ! ii.!Technology!! More!“Robots/cranes!that!can!move!thousands!of!cartons!an!hour”14,instead!of!extra! human!resources!at!a!distribution!center,!are!a!way!of!keeping!labor!costs!low.!RFID!tags! are!used!to!collect!detailed!information!on!an!item!and!match!it!to!a!central!database.!This! technology!directly!addresses!our!problem!of!keeping!the!stores!stocked.!It!gives! immediate!information!regarding!products!that!leave!the!shelves!resulting!in!quicker! 4
  6. 6. replenishment.!Not!only!does!this!help!with!stores,!but!it!also!assists!the!distribution! centers!as!well!due!to!the!fact!that!shipments!are!coming!in!automatically.!This!method! enables!a!reduction!in!lead!time.6!Reduction!in!lead!times!leads!to!a!quicker!supply!chain! and!makes!it!more!efficient.!According!to!Erin!Saunders,!it!creates!a!“perfect!flow!having! items!go!from!the!truck!straight!to!the!store’s!sales!floors....achieved!through!distribution! performance!management:!where!products!go!in!and!out!of!the!distribution!centers,! headquarters!receive!information!so!they!can!track!sales!in!stores!and!in!turn!replenish! them!just!In!time.”! ! iii.!Competitors! ! Wal?Mart!is!one!of!Target’s!largest!competitors.!Although!Wal?Mart!promises!the! lowest!price!on!most!products,!their!products!are!often!found!to!be!of!less!quality.!Wal? Mart!plays!to!a!lower!income!level!than!that!of!target;!however,!the!two!companies!do! share!a!common!market!segment!that!each!is!always!fighting!for.!Target!typically!has! higher!quality!products!and!the!name!of!the!company!itself!it!associated!with!quality!at!a! great!price!as!oppose!to!a!“value”.!! Wal?Mart’s!stores!are!usually!pretty!hectic.!Space!is!a!commodity!that!every!store!seems!to! run!short!off,!as!customers!are!often!squeezed!together!in!tight!spaces.!Wal?Mart!uses!all!of! it!space!mainly!for!product.!The!company!does!this!because!it!reduces!the!space!needed!for! a!stock?room!which!allows!there!to!be!more!products!on!the!sales!floor.!! Wal?Mart!has!a!formidable!supply!chain!and!is!one!to!envy!given!its!complex!nature.! The!company!handles!this!complexity!through!applied!technology!and!collaboration.! Similarly!to!Target,!Wal?Mart!uses!an!RFID!system!along!with!the!addition!of!smart!tags!to! closely!monitor!and!track!products!through!their!supply!chain.!Wal?Mart!was!a!pioneer!in! implementing!Cross?docking.!Cross?docking!is!an!attempt!to!reduce!the!amount!of!labor! used!to!unload!a!truck!onto!another!truck.!As!oppose!to!unloading!the!trailer,!the!truck! drops!the!trailer!allowing!another!truck!to!pick!up!the!trailer!and!reduce!lead!times.! Technology!is!widely!utilized!by!Wal?Mart!to!create!an!efficient!supply!chain!by!creating! information!that!is!communicated!continuously.15!Continuous!communication!allows!for! constant!checks!on!inventory,!demand,!lead!times,!and!management!of!the!randomness! that!is!constantly!forcing!adjustments!within!the!supply!chain.! 5
  7. 7. ! iv.!Product! Managing!the!product!mix!is!essential!to!maintain!adequate!lead!times!within!the! supply!chain.!Stores!order!different!quantities!of!different!products.!This!fact!creates!a! troublesome!problem!because!different!products!require!different!handling!procedures! and!different!amounts!of!space!within!a!shipment.!Some!may!take!longer!to!receive!due!to! varying!lead!times!associated!with!the!products.!Others!may!require!differing!packaging! techniques.!Also,!it!is!often!noted!that!products!come!in!different!batches!from!vendors.! Product!mix!must!be!communicated!efficiently!from!retailers!to!their!distribution!centers! and!at!the!same!time,!distribution!centers!must!communicate!just!as!efficiently!with!their! suppliers!in!order!to!maintain!lead!times!and!customer!service!levels.! ! v.!Vendors! ! Closer!cooperation!is!achieved!through!buying!locally.!Lower!total!costs!occur! through!consolidated!transportation.!“Just!in!time”!is!also!achieved,!due!to!shorter!lead! times!and!reductions!in!inventory.!Social!responsibilities!to!the!community!are!fulfilled! because!of!the!growth!in!jobs.2!Buying!from!the!manufacturer!is!suggested!because!there! will!be!no!need!of!special!services,!for!simple!commodities,!as!long!as!the!manufacturer! provides!the!essential!distribution!functions.2!!Erin!Saunders!stated,!that!“store!delivery! goes!out!and!looks!for!vendors!close!to!stores!and!picks!up!freight!on!the!way!back!to!save! money”,!showing!that!Target!communicates!effectively!with!its!vendors!to!reduce!lead! times.!Also,!this!saves!money!by!not!contracting!an!outside!company!to!ship!products!from! vendors!to!the!distribution!centers.! ! vi.!Trends! A!third!of!Americans!own!a!phone!with!access!to!the!internet!and!a!solid!portion! would!not!mind!having!the!option!to!make!purchases!on!the!spot!using!mobile!phones.!!As! smartphone!usage!increases!among!the!population,!this!trend!will!increase.!To! accommodate!these!purchases,!we!need!to!ensure!that!the!mobile!phone!ordering!process! runs!smoothly!and!treat!these!transactions!with!the!same!customer!service!level!as!any!in? store!transaction.!Due!to!this!trend!a!multi?channel!approach!is!required,!meaning!taking! 6
  8. 8. goods!from!distribution!centers!directly!to!consumers.!This!can!best!be!accomplished!by! strategically!locating!future!distribution!centers!close!to!transportation!hubs!in!order!to! reduce!transportation!cost!as!well!as!delivery!time.13! ! vii.!Economy! ! High!unemployment!makes!Target!a!victim!of!the!economy.!In!2009,!Target!cut!900! jobs!at!its!Maumelle!distribution!center!as!well!as!cut!400!open!positions!in!the! Minneapolis!area.!The!distribution!center!in!Maumelle!was!considered!to!be!the!town’s! largest!employer.!If!target!cannot!create!or!maintain!jobs,!then!this!will!and!has!reflected! poorly!on!them!in!the!eyes!of!the!community.!However,!Target!still!employees!350,000! people!nationwide!and!works!hard!to!keep!their!employees!satisfied.!More!jobs!may!be! created!through!having!a!more!efficient!supply!chain!because!it!allows!the!business!to! more!effectively!reach!its!end?consumers!which!in!turn!leads!to!increasing!their!bottom! line!which!provides!the!monetary!means!necessary!to!invest!in!new!stores!and!facilities.! If!Target!must!cut!jobs!due!to!the!struggling!economy,!then!investing!in!a!solid! transportation!structure!could!combat!this!by!reducing!labor!cost!associated!with! distribution.!Investing!in!a!more!solid!structure!would!also!increase!reliability!as!well!as! customer!service!levels.1! iix.!Benchmarking! ! Proctor!and!Gamble!successfully!created!$1billion!in!the!last!five!years!through!its! “zero?waste!strategy”.!The!company!claims!that!45!of!its!manufacturing!facilities!have!zero! waste;!meaning!that!whatever!is!coming!into!the!manufacturing!facility!is!going!out!in!the! form!of!end!user!products.!Along!with!becoming!more!efficient,!this!has!reflected!great!on! the!company!in!the!public!eye.!The!company!has!taken!drastic!steps!to!be!becoming! environmentally!and!ethically!responsible.!At!the!all!other!manufacturing!plants,!waste!is! being!99%!recycled!and!reused!within!their!products.!P&G!has!also!made!the!pledge!to! make!their!packaging!out!of!only!100%!recycled!materials!by!2020.!This!creates!not!only!a! positive!image!for!P&G,!but!also!gives!a!hefty!financial!boost!because!if!the!company! doesn’t!waste!then!there!is!no!lost!cost!associated!with!unused!material.18!! ! Target!should!look!to!Proctor!and!Gamble!as!the!company!that!is!setting!the!bar,!and! setting!it!high.!Target!can!enhance!its!public!image!as!well!as!drastically!cut!costs!if!the! 7
  9. 9. company!chooses!to!implement!this!same!kind!of!“zero?waste!strategy”!into!its!in?house! product!lines.!Sustainability!is!one!of!P&G’s!corporate!missions;!Target!should!rethink!their! mission!to!include!sustainability!as!a!main!objective.!Increase!sustainability!leads!to!cutting! costs!which!leads!to!increasing!the!all?important!bottom!line.! ! III.!SWOT!Analysis! Target!is!one!of!the!largest!retailers!in!the!US,!serving!guests!from!more!than!1700! stores!in!49!states!nationwide.!In!recent!years,!Target!has!been!in!the!process!of!shifting! their!supply!chain!towards!a!more!guest?focused!approach!in!order!to!gain!an!edge!on!its! competitors.! Strengths! ● Moving!toward!a!supply!chain!that! is!more!guest!centered.!! ● High!quality,!clean,!spacious!and! guest!friendly!stores! ● Automated!technology!operating!the! supply!chain!at!the!Distribution! Weaknesses! ● Increased!labor!costs! ● Items!take!up!a!lot!of!space!in!the! distribution!centers!! ● Lower!Inventory!Turnover!Ratio! Compared!to!industry! ● High!store!variability!! Centers! ● Quality!Focus!in!Supply!Chain! ● High!Product!Differentiation! ● Well!established!in!US! Opportunities! ● Technology! Threats! ● Competition!like!Wal?Mart!and! Costco! ! i.!Strengths! Guest!Centered!Supply!Chain! Over!the!past!few!years,!Target!has!been!moving!more!and!more!towards!a!guest! focused!supply!chain!system.!Their!main!goal!is!to!be!able!to!provide!the!customer’s!with! 8
  10. 10. the!products!they!want,!exactly!at!the!time!they!want!them.!To!be!able!to!meet!this! standard,!Target!must!apply!strategies!that!keep!top!selling!items!such!as!paper!towels,! detergent,!and!diapers!on!the!store!shelves!at!all!times.!Target’s!current!supply!chain! method!for!meeting!this!goal!works!extremely!well!and!efficiently,!but!of!course!there!are! still!areas!that!can!be!improved!upon!in!order!to!create!the!best!system!possible!and! minimize!costs.! ! High!quality!and!Guest!Friendly!Stores! Target!strives!to!provide!its!customers!with!high!quality,!clean!and!spacious!stores.! They!want!the!shopping!experience!to!be!as!easy!and!convenient!as!possible!for!their! customers!while!presenting!a!well!laid!out!and!calm!shopping!atmosphere.!Target!makes!it! evident!that!they!make!an!effort!to!keep!all!of!their!stores!as!clean!as!possible.!Competitors! like!Wal?Mart!are!often!tagged!as!being!a!hectic!shopping!atmosphere!along!with!some! locations!being!filthy!and!an!inconvenient!shopping!experience.!Target!stores!are!built!to! fit!in!seamlessly!with!the!lifestyle!of!its!customers!.!This!increases!customer!loyalty!as!well! as!satisfaction!and!motivates!people!to!come!back.!! ! Able!to!keep!top!selling!items!in!stock! Target!works!hard!to!be!able!to!keep!the!top!selling!items!such!as!paper!towels,! detergent,!and!diapers!in!stock!for!its!customers!at!all!times.!In!order!to!accomplish!this,! Target!must!have!a!very!efficient!supply!chain!that!can!get!the!product!from!the!DC’s!to!the! stores!as!quick!and!cost!effectively!as!possible.!!! Target!has!a!very!efficient!and!successful!system!in!place!that!is!currently!able!to!get! the!products!to!the!stores!and!keep!them!in!stock!for!its!consumers.!Target!has!worked! very!hard!over!the!years!at!improving!this!system!and!continues!to!improve!upon!it!as!they! see!necessary.!Overall,!Target!is!one!has!one!of!the!best!and!most!efficient!supply!chains!in! the!industry!and!they!continue!to!set!new!standards!for!their!competitors.!! ii.!Weaknesses! Increased!labor!costs! Providing!these!three!top!selling!items,!among!others!as!well,!does!not!come!at!a! cheap!price.!Since!Target!strives!to!keep!these!items!on!the!shelves!at!all!times,!they!have! 9
  11. 11. to!implement!strategies!that!often!drive!up!labor!costs.!Paper!towels,!detergents,!and! diapers!are!all!considered!top!selling!items!that!really!drive!Target’s!customer!loyalty.!If! these!items!are!consistently!in!stock!at!the!stores,!customers!will!keep!coming!back.! In!order!to!do!this,!Target!maintains!a!larger!volume!of!these!specific!products!in! their!distribution!centers.!This!does!make!the!products!readily!available!to!ship!to!the! stores,!but!at!the!same!time!really!drives!up!the!labor!costs!because!the!products!must!be! handled!multiple!times!before!they!actually!reach!the!store!and!hit!the!shelves.!With!paper! towels,!detergent,!and!diapers!being!low!margin!products,!this!increase!in!labor!cost!really! eats!away!from!potential!revenues.! ! Paper!towels,!detergent,!and!diapers!take!up!a!lot!of!space! Another!disadvantage,!or!weakness,!for!Target!is!the!fact!that!these!particular! products!take!up!a!very!large!amount!of!shelf!space.!Space!is!money!in!the!retail!industry! and!must!be!optimized!and!managed!as!effectively!as!possible.!Storing!these!products!in! strategic!ways!must!be!implemented.!Target!must!find!ways!to!free!up!as!much!space!as! possible!in!their!DC’s;!products!like!these!are!what!makes!that!goal!so!difficult.!These!three! types!of!products!discussed!take!up!a!lot!of!space!not!only!in!the!DC’s!and!on!the!store! shelves!but!also!in!the!trucks!that!ship!them!to!the!various!locations.!! ! High!store!variability! ! After!speaking!to!several!different!merchandise!managers!at!a!few!different!Target! store!locations,!it!became!apparent!that!the!different!variations!from!store!to!store!could! cause!inefficiencies.!It!seemed!as!if!we!were!being!told!different!things!as!far!as!store! operation!procedures.!One!store!mentioned!it!is!a!nationwide!set!time!to!do!the!inventory! records!in!the!morning,!and!one!mentioned!it!was!supposed!to!be!done!at!night.!Little! discrepancies!like!these!cause!variability!which!causes!inefficiencies.!Along!with!this,!we! were!also!told!that!sometimes!store!shelves!will!be!empty!when!the!employees!do!their! “walk!arounds”.!It!is!very!important!that!shelves!stay!stocked!at!all!times!in!order!to!ensure! the!store!has!as!much!inventory!on!hand!as!possible.!Each!minute!that!passes!with!a!shelf! not!being!stocked!is!lost!revenues!and!a!missed!chance!for!inventories!to!be!taken!away! from!the!DC’s!and!sent!to!the!stores,!which!is!the!ultimate!goal!at!hand.! 10
  12. 12. ! In!addition,!another!talked!about!issue!in!the!stores!was!the!fact!the!the!computer! system!will!sometimes!make!mistakes.!The!system!may!send!double!the!product!to!the! store!it!was!supposed!to,!or!it!may!send!one!stores!product!to!another!one.!These!are! variations!that!weaken!the!supply!chain!and!increase!inefficiencies!and!should!certainly!be! addressed!and!mitigated!as!best!as!possible.! ! ! iii.!Opportunities! Target!currently!uses!technology!extensively!in!their!supply!chain!already,!but!there! are!more!opportunities.!The!DC!warehouses!are!approximately!90%!automated!but!still! require!some!human!interaction.!This!human!interaction!can!cause!some!variability.!!We! see!opportunities!specifically!concerning!RFID!technology.!!Due!to!recent!developments!in! technology,!RFID!is!cheaper!than!ever.!!There!are!3!primary!types!of!RFID!technology! including!passive,!semi!passive,!and!active.17!Semi?passive!and!active!tags!require!power!to! function.!!Active!tags!broadcast!signals!while!semi?passive!tags!require!the!reader!to! supply!the!power!for!broadcasting!the!signal.!!Passive!tags!can!be!read!from!20!feet!away! and!do!not!require!power,!therefore,!are!cheaper!to!produce.!!If!Target!can!implement! technology!to!decrease!inventory!variability!! iv.!Threats!! ! The!single!largest!threat!to!Target!is!their!competitors.!The!biggest!competition!that! Target!is!up!against!right!now!is!other!retail!chains!like!Wal?Mart!and!Costco.!Target!has!to! be!sure!to!optimize!and!make!their!supply!chain!as!best!as!possible!so!that!they!can!stay! ahead!of!the!competitors!and!keep!their!prices!down.!Costco!has!the!advantage!of!selling!in! bulk!or!large!quantities!so!that!helps!them!drive!their!prices!down.!On!the!other!hand,!Wal? Mart!is!a!huge!retailer!that!serves!as!a!significant!threat!to!Target.!They!offer!many!of!the! same!products,!and!at!times!more!products!than!Target.!Target!must!find!ways!to!put! themselves!ahead!of!Wal?Mart.!Inventory!Turnover!is!a!great!indicator!of!how!long!a! company!holds!on!to!inventory!before!selling.!!Target!Corp’s!inventory!turnover!ratio!was! 6.45!in!January!2013.!!Wal?Mart's!inventory!ratio!was!8.34!as!of!January!2013!while! Costco’s!was!13.14.19!The!higher!inventory!turnover!the!more!times!per!year!the!company! sells!all!their!inventory.!!This!shows!that!although!Target!is!a!major!competitor!there!is!still! 11
  13. 13. room!for!improvement.!!Target!can!achieve!a!higher!inventory!turnover!by!working!with! marketing!to!offer!discounts!on!items!in!order!to!encourage!buying!in!bulk.!!Target!could! also!work!with!vendors!to!reduce!order!quantities!and!wholesale!prices.!! ! IV.!Recommendations!! ! i.!MultiMechelon!Inventory!Optimization! Objectives! ! Target’s!mission!statement!is!“delivering!outstanding!value,!continuous!innovation! and!exceptional!guest!experiences!by!consistently!fulfilling”!!their!promise!of!expecting! more!and!paying!less.10!In!order!to!move!towards!this!mission,!Target!has!become! increasingly!more!guest?focused!as!the!years!have!progressed.!To!achieve!their!more! guest?focused!approach,!Target!banks!on!being!consistently!in?stock!on!their!top?selling! items!such!as!paper!towels,!laundry!detergent,!and!diapers.!The!company!achieves!this! consistency!by!maintaining!a!large!volume!of!this!inventory!in!their!distribution!centers;! however,!while!holding!large!quantities!of!these!products!increases!their!customer!service! levels!it!also!drives!increased!labor!costs!due!to!the!fact!that!the!product!must!be!handled! multiple!times!before!it!reaches!the!store.!This!system!of!high!inventory!levels!at!their! distribution!centers!has!proven!to!be!cost?inefficient!and!at!times,!below!the!required! customer!service!level.!Target!wishes!to!develop!a!better!“guest?focused”!supply!chain! strategy!that!will!drive!better!in?stock!levels!of!their!top!selling!products,!reduce!inventory! levels!at!their!distribution!centers,!while!simultaneously!reducing!or!maintaining!cost!at! their!current!level.! Problem!Analysis! ! Target’s!guest?focused!approach!requires!them!to!be!consistently!in?stock!on!their! top!selling!products:!paper!towels,!detergent,!and!diapers.!The!top?selling!brands!in!these! product!categories!are:!Bounty,!Tide,!and!Pampers!respectively.12!These!brands!account!for! a!large!portion!of!sales!in!their!respective!product!category.!All!products!are!manufactured! and!distributed!by!the!same!company,!Proctor!and!Gamble.!! ! In!2006,!P&G!developed!a!pilot!“multi?echelon!inventory!system”!(MEI)!for!their! cosmetics!line.!This!inventory!system!was!initially!used!only!on!their!cosmetics!line!in! 12
  14. 14. order!to!see!if!the!MEI!system!had!the!potential!to!meet!their!goals!of!maintaining!their! 99%!customer!service!level,!improving!forecasting,!reducing!inventory,!and!reducing!cost.! P&G!was!more!than!satisfied!with!the!results!of!the!pilot.!Implementing!the!MEI!system! reduced!inventory!in!their!cosmetic!lines!by!5%!(10%!in!some!product!lines)!with!no! deterioration!in!customer!service!levels.!A!more!stable!work?process,!decreased!inventory! levels!across!the!supply!chain,!and!faster!more!accurate!supply!chain!analytics!and!support! were!also!achieved7.! ! Experts!claim!that!the!payback!period!for!implementing!the!MEI!system!is!under!a! year!and!in!some!cases!less!than!six!months.!P&G!plans!to!utilize!this!multi?echelon!system! company!wide.7! MultiMEchelon!Inventory!Optimization!vs.!Sequential!and!DRP!Approach! ! Inventory!is!a!function!of!supply,!demand,!time,!cost,!customer!service,!and! probability.!Inventory!optimization!is!the!process!of!balancing!supply!with!the!probability! of!demand!while!considering!customer!services!levels!with!optimal!cost.!Inventory! optimization!is!approached!in!several!ways;!two!of!the!most!popular!are!sequential! approach!(single?echelon!network)!and!Distribution!Requirements!Planning.!The!multi? echelon!inventory!system!used!by!Proctor!and!Gamble,!as!mentioned!in!the!previous! section,!is!a!new!and!less!common!approach!to!inventory!optimization.!! ! In!a!sequential!approach,!the!objective!is!to!meet!immediate!inventory!needs!at!a! minimum!inventory.!Demand!is!based!off!independent!forecasts!from!each!member!in!the! supply!chain!and!passed!up!to!their!vendor,!or!is!based!off!of!historical!data.!This!can!lead! to!a!shortage!or!surplus!of!inventory!across!the!supply!chain!since!there!is!a!lack!of! visibility!upstream!due!to!the!fact!that!the!only!lead!times!considered!from!the!distribution! center!are!the!suppliers;!lead!times!from!the!retailer!are!ignored.!Also,!the!lack!of!visibility! downstream!can!distort!inventories!to!be!shipped!to!distribution!centers!from!the!supplier! because!the!supplier!ignores!the!retailers!demand.!Cost!across!the!network!are!also!not! evaluated!because!the!members!of!the!chain!form!independent!forecasts8!! Distribution! Requirements!Planning!(DRP)!has!an!objective!to!provide!product!requirements!to!their! upstream!supplier!in!order!to!meet!their!demand;!therefore,!demand!is!based!off!of!the! immediate!demand!of!the!downstream!member.!This!can!cause!lead!times!to!increase! 13
  15. 15. down!the!supply!chain!because!lead!times!upstream!are!ignored.8!The!bullwhip!effect!can! also!be!intensified!because!the!demand!upstream!is!not!considered!downstream.! ! Multi?echelon!inventory!optimization!(MEIO)!is!a!fairly!new!idea!to!the!market!and! is!designed!to!combat!the!problems!associated!with!sequential!and!DRP!approaches.! MEIO’s!objective!is!to!minimize!inventory!across!the!supply!chain!while!meeting!end? customer!service!goals.!The!system!accounts!for!the!total!customer!service!level,!lead!time,! demand,!demand!probability,!transportation!cost,!holding!cost,!and!inventory!levels!at!all! levels!of!the!supply!chain.!This!allows!a!company!to!have!complete!visibility!up!and!down! the!supply!chain!resulting!in:!avoiding!independent!demand!forecasting,!accounting!for! lead!time’s!across!the!system,!managing!as!opposed!to!responding!to!the!bullwhip!effect,! synchronized!order!strategies,!and!the!ability!to!offer!differentiated!customer!service!levels! at!different!distribution!centers.!MEIO!allows!for!many!different!scenarios!to!be!considered! all!at!once!because!the!constraints!of!the!supply!chain!can!be!modified!within!the!program.! A!company!can!build!a!supply!chain!that!is!resistant!to!changes!in!business!conditions,! management!objectives,!and!moves!of!competitors!at!the!lowest!cost.!This!feature!allows! for!the!generation!and!assessment!of!all!possible!alternatives!and!selection!of!the!best! alternative,!resulting!in!an!optimized!strategy.! Benefits!of!MEIO! ! !In!2005,!Intel!implemented!a!MEIO!project.!Intel!defined!MEIO!as!a!system!that! “incorporates!average!forecast!data,!forecast!error!variability,!average!and!standard! deviation!of!throughput!time!per!production!stage,!unit!costs!per!production!stage,! transportation!costs,!holding!costs,!and!customer!service!level!into!its!algorithm!to!provide! differentiated!Safety!Stock!(SS)!targets!by!product,!by!site,!and!by!stage”4!(HSIEH).!Intel! cited!a!11%!reduction!in!inventory!levels!across!the!entire!supply!chain!in!the!first!year! and!maintained!aggregate!customer!service!levels!and!at!times!exceeded!those!levels!as!the! below!figure!15!indicates.!There!was!also!a!7%!reduction!in!safety!stock!levels.!! 14
  16. 16. ! Implementation!of!MEIO!Cost!Analysis! ! Experts!agree!that!there!is!an!average!of!10%?15%!reduction!in!inventory!levels.! This!is!translated!into!cost!savings!by!multiplying!a!company’s!cost!of!sales(total!cost!of! products!including!total!distribution!cost,!COGS,!and!Distribution!Center!costs)!by!the! percentage!of!inventory!reduction.!SCMFocus!is!a!company!that!specializes!in!maintenance,! consultation,!and!implementation!of!MEIO.!SCMFocus!charges!a!first!year!license,! maintenance,!and!consulting!fee!of!.78%!and!a!second!year!maintenance!cost!of!.08%.! Using!Target’s!2010!and!2011!cost!of!sales!data,!if!Target!were!to!have!implemented!a! MEIO!at!the!start!of!2010,!then!the!estimated!total!cost!of!the!program!in!year!one!would! have!totaled!$356,655!with!an!estimated!savings!of!$4,572,500.!Estimated!cost!and!savings! for!year!2!would!have!totaled!$28,288!and!$4,786,000!respectively.!Over!the!two!year! period,!cost!and!saving!of!the!launch!would!have!been!estimated!to!be!$394,943!and! $9,358,500.!These!estimates!speak!for!themselves!in!terms!of!what!this!system!is!capable! of.! 15
  17. 17. Conclusion! ! The!potential!benefits!of!multi?echelon!inventory!optimization!far!outweigh!the!cost! to!implement.!MEIO!has!been!shown!to!reduce!inventory!levels!by!10%?15%!across!the! supply!chain,!reduce!costs,!and!to!also!have!the!ability!to!meet!or!exceed!required!customer! service!levels.!Proctor!and!Gamble!has!already!successfully!implemented!this!system.! Target!is!a!major!vendor,!not!a!competitor!of!P&G.!It!may!be!possible!to!receive! consultation!on!MEIO!through!P&G.!Because!when!Target!sells!more!and!cuts!cost,!those! benefits!are!translated!up!the!supply!chain!directly!to!P&G.!In!essence,!when!Target!wins!so! does!P&G.!If!not,!a!potential!problem!for!Target!would!be!having!to!rely!on!either!in?house! development!or!the!technology!of!a!third!party!software;!third!party!software!may!not!have! been!proven!effective!yet!due!to!the!relative!newness!of!MEIO.!Development!of!in?house! technology!would!raise!cost!substantially,!but!would!ensure!that!the!system!is!tailored!to! Target’s!needs!and!is!reliable.!The!potential!benefits!of!MEIO!would!still!outweigh!these! added!development!costs..!! ! I!encourage!Target!to!explore!all!opportunities!associated!with!MEIO.!Wisdom!and! understanding!can!only!be!achieved!when!knowledge!is!applied.!Knowledge!without! application!can!never!be!wisdom.!! ! ! ii.!Cross!Docking!Optimization! We!believe!the!concept!of!Cross!Docking!could!be!an!extremely!beneficial!process! for!Target!to!implement!at!their!distribution!centers.!Cross!docking!is!a!process!in!logistics! where!products!are!unloaded!directly!from!inbound!trucks,!dispersed!in!the!proper! manner,!and!loaded!directly!back!onto!outbound!trucks!that!take!the!product!to!its!final! destination.!!In!Target’s!case,!the!trucks!coming!from!the!suppliers!would!arrive!at!Target’s! distribution!center(s)!with!various!types!of!products!on!board.!Instead!of!these!products! being!unloaded,!tagged,!and!stored!into!inventory,!they!could!simply!be!unloaded,! accounted!for!using!the!proper!technology,!and!then!loaded!directly!back!onto!Target’s! fleet!of!trucks!and!sent!out!to!the!various!Target!stores.!Once!implemented,!this!system!will! streamline!the!supply!chain!from!point!of!origin!to!point!of!sale,!therefore!decreasing!the! amount!of!time!the!product!is!handled!which!in!turn!will!decrease!handling!costs!incurred! at!the!DC’s.!In!addition!to!reducing!handling!costs,!cross!docking!will!also!reduce!operating! 16
  18. 18. and!inventory!holding!costs.!Since!the!product!no!longer!has!to!be!stored!in!the!distribution! centers,!this!frees!up!space!and!decreases!holding!costs.!The!products!of!concern!(paper! towels,!detergents,!and!diapers)!all!take!up!a!vast!amount!of!space!on!the!storage!shelves,! so!cross!docking!could!really!help!to!eliminate!this!problem!and!free!up!space!for!other! Target!products.!Cross!docking!will!also!decrease!the!product!delivery!lead!times!and!get! the!product!to!the!stores!and!the!customers!quicker.!The!main!goal!that!should!be!focused! on!is!decreasing!the!amount!of!inventory!in!the!DC’s!while!increasing!the!stock!levels!in!the! stores.!If!cross!docking!is!implemented!it!will!certainly!contribute!to!reaching!this!goal.!It! will!drive!down!the!inventory!stock!in!the!DC’s!and!get!the!products!to!the!stores!much! more!quickly!so!that!the!stores!will!have!the!top!selling!products!the!customers!demand.! ! We!are!aware!that!Target!already!practices!cross!docking!on!many!of!their! products,!but!the!recommendation!is!meant!to!implement!a!more!lean!cross!docking! system.!The!goal!is!to!minimize!the!amount!of!time!these!products!are!spending!on!the! shelves!inside!the!distribution!centers!and!get!them!shipped!out!to!the!stores!as!quick!as! possible,!while!at!the!same!time!being!handled!the!least!amount!possible.! Cross'Docking'figure:! ! 17
  19. 19. !!!! iii.!Ergonomics! ! Visibility!is!the!placement!of!key!items!in!places!that!attract!attention;!placing!paper! towels,!laundry!detergent,!and!diapers!in!easy?to?find!locations!will!increase!their!visibility.! This!usually!involves!setting!these!particular!items!on!the!front!(or!side)!shelf!of!an!aisle! visible!to!the!most!“naked!eye”;!this!is!product!placement!at!its!best.!This!technique!can!be! implemented!at!a!distribution!center!as!well!as!in!stores.!We!could!place!products!at!lower! shelves!for!easier!access!and!quick!removal,!especially!with!common!products.!The!goal!is! for!the!DC!handlers!to!touch!the!top!selling!products!as!little!as!possible.!The!longer!it!takes! to!move!these!high!demanded!products!the!more!the!operating!and!handling!costs! increase.!If!you!place!these!products!in!locations!close!to!the!loading!docks,!or!in!“easy”! locations,!it!will!minimize!handling!time!and!decrease!costs.! ! This!is!a!very!simple!concept!but!could!definitely!be!a!source!to!help!cut!costs!and! save!significant!amounts!of!money!in!the!long!run.!It!is!very!easy!to!implement!and!will! definitely!be!cost!effective.!! iv.!Concentrated!Products! ! Space!is!a!huge!factor!when!trying!to!reduce!inventory!and!operating!costs.!If!the! size!of!items!can!be!optimized!or!made!smaller,!more!room!will!become!available!on!the! trucks,!in!the!DC’s,!and!in!the!stores.!We!believe!there!are!possible!ways!that!Target!can!cut! down!on!the!size!of!their!products!or!make!the!products!more!efficient!for!their!size.!We! realize!that!Target!cannot!control!the!vendor’s!products!or!products!outside!of!their! ownership,!but!they!can!however!control!the!size!of!their!own!in?house!Target!brands.!! One!way!to!put!this!idea!into!effect!would!be!to!concentrate!the!Target!brand! detergent!into!a!more!concentrated!chemical!that!could!be!packaged!into!a!smaller! container.!It!would!be!very!simple!for!customers!to!either!use!less!of!the!detergent!or!dilute! it!with!water.!Similarly,!Target!could!produce!stronger,!more!durable!paper!towels,!which! Target!could!sell!for!more!and!increase!the!low!margins!per!square!inch.!Customers!would! be!able!to!use!less!of!the!product,!which!would!create!more!value!in!the!eyes!of!the! consumer.!! v.!Condense!Product!Variation!according!to!Demographics! 18
  20. 20. Target!currently!offers!a!wide!variety!of!brands!and!size!in!paper!towels,!detergents,! and!diapers.!!A!new!outlook!on!maximizing!in!store!stock!levels!would!be!to!decrease! product!variation!according!to!the!local!demographics.!When!products!are!condensed,! demand!becomes!easier!to!forecast!due!to!less!variability.!!Dr.!Pappu!always!uses!the! example!of!a!store!always!selling!5!different!colored!soaps.!!Instead!of!forecasting!for!each! color!of!soap,!it!is!simply!easier!to!forecast!the!aggregate!demand!of!all!soaps.!!In!order!to! implement!this!approach,!Target!could!research!the!general!surrounding!demographics!of! stores!and!find!the!most!popular!of!our!three!focus!product!groups.!!For!example,!Jenna,!a! manager!at!the!Cedar!Hill!Target,!stated!that!customers!in!rural!areas!like!Waxahachie,! Texas,!prefer!to!purchase!large!quantities!of!paper!towels!versus!customers!in!high! metropolitan!areas!whom!usually!preferred!to!purchase!a!few!single!rolls!at!a!time.!! Obviously,!it!is!unrealistic!to!completely!condense!all!products,!but!with!accurate!research! at!a!few!stores!it!could!heavily!impact!demand!forecasts!and!as!a!result!in!stock!levels!in! stores!as!well.! vi.!Drive!Better!In!Stock!Accuracy! Target’s!EOQ!model!is!excellent!due!to!its’!almost!accurate!forecast!decisions.!! According!to!Brad!Moore,!Logistics!Team!Leader!at!the!Target!in!Waxahachie,!store!sales! volume!has!one!of!the!biggest!effects!on!the!EOQ!for!each!store.!Looking!critically!at! Target’s!forecast!system!and!due!to!limited!information!provided!in!that!area,!we!assume! that!Target!is!highly!efficient!in!that!area.!!However,!there!is!still!variability!in!the!system.!! Variability!is!always!a!concern!in!a!supply!chain!because!that!increases!safety!stock,!hence,! overall!inventory!required.!!Specifically,!this!variability!is!found!at!the!store!level!when! inventory!records!do!not!match!the!physical!quantity!found!in!store.!This!can!happen!in!a! variety!of!ways.!Several!Target!managers!contributed!most!inventory!quantity!errors!to! incorrectly!labeled!pallets!from!the!DC,!especially!for!commodity!products!discussed.!Other! minor!ways!these!errors!can!be!caused!include!shrinkage!and!incorrect!record! modification!of!damaged!goods.!These!slight!variations!do!not!look!very!important!on!a! store!level,!but!when!combined!they!can!cause!serious!issues!for!the!EOQ!system.!If!an! inventory!record!shows!a!store!has!5!of!one!product,!but!physically!has!0!then!that!store! may!not!be!getting!a!shipment!from!the!DC!when!it!should!be.!The!key!to!the!solution!is! minimizing!the!variability!at!store!to!store!level.!We!have!several!proposed! 19
  21. 21. recommendations!to!decrease!inventory!record!errors.!Firstly,!there!are!currently! procedures!in!place!at!Target!to!“research”!stock!outs!and!verify!they!are!at!0.!However,!at! the!two!stores!in!Dallas!area!one!reported!that!this!process!is!mandated!to!occur!in!the! morning!companywide!while!the!other!reported!it!was!a!night!process.!By!stressing!the! importance!of!“research”!and!possible!even!dedicating!specific!employees!for!this!simple! task!would!be!beneficial!for!Target.!On!the!other!hand,!another!warning!signal!at!Target! stores!can!be!if!a!particular!store!is!receiving!excess!inventory.!This!can!be!a!sign!that!there! is!an!inventory!error!record.!!Secondly,!another!more!technological!approach!would!be!to! introduce!RFID!technology.!!Ultimately,!it!could!be!used!for!seeing!the!immediate!stock!on! shelves.!Instead!of!paying!for!labor!to!manually!verify!inventory!records,!RFID!readers! could!be!built!into!shelves!and!each!product!would!have!a!passive!RFID!tag!attached.!!This! system!would!give!stores!an!immediate!look!at!their!on!hand!stock!levels!with!almost! perfect!accuracy.!!According!to!research,!Target!has!used!RFID!technology!in!the!past!but!in! the!past!year!and!a!half!RFID!tags!has!decreased!by!almost!40%!down!to!just!$.07!to!$.12! per!tag.!(16)!!If!Target!jumped!on!this!opportunity,!the!first!mover!rewards!could!be! tremendous.!!Target!could!perform!cost!analysis!at!a!few!test!stores!to!see!if!this!options! would!be!beneficial!for!Target!in!the!long!run.!!An!additional!use!of!RFID!technology!would! be!to!tag!pallets!of!commodities!with!active!or!semi?passive!RFID!tags.!!This!could!help! eliminate!the!errors!that!several!Target!managers!reported!when!asked!about!how! commodity!inventory!turns!out!to!be!inaccurate.!! ! ! ! ! ! ! ! ! ! ! ! 20
  22. 22. Works!Cited! 1 "Appendix!A!Economic!Effects!of!Transportation:!The!Freight!Story!Final! Report."Transportation'Infrastructure,'Freight'Services'Sector'and'Economic'Growth:'A' Synopsis.!U.S.!Department!of!Transportation!Federal!Highway!Administration,!n.d.!Web.! 22!Apr.!2013.! <http://ops.fhwa.dot.gov/freight/freight_analysis/improve_econ/appa.htm>.! 2 Burt,!David!N.,!Sheila!D.!Petcavage,!and!Richard!L.!Pinkerton.!Supply'Management.8th! ed.!Boston:!McGraw?Hill!Irwin,!2010.!Print.!(Pages!256?58).! 3 Hadavi,!Cyrus.!"Multi!Echelon!Inventory!Planning!Demystified!"!Supply'Chain'Planning' Blog.!Adexa,!n.d.!Web.!23!Apr.!2013.!<http://web.adexa.com/adexa? blog/bid/30030/Multi?Echelon?Inventory?Planning?Demystified! 4 Hsieh,!Min!Fang.!"Applying!a!MEIO!Approach!to!Manage!Intel's!VMI!Hub! Supply."DSpace@MIT.!MIT,!n.d.!Web.!24!Apr.!2013.! <http://hdl.handle.net/1721.1/66075>.!(Page!32).! 5 "History."!History:'Target's'Shopping'Experience'Over'Time.!Target!Brands!Inc.,!n.d.!Web.! 23!Apr.!2013.!<https://corporate.target.com/about/history/Target?through?the?years>! 6 !"The!History!of!Corporate."!''Target'Corporation'by'.!N.p.,!n.d.!Web.!23!Apr.!2013.! <http://www.thehistoryofcorporate.com/companies?by? industry/traderetail/target?corporation/>! 7 "The!Impact!of!RFID!on!Supply!Chains."!—'Research'With'Impact.!PennState!Smeal! College!of!Business,!n.d.!Web.!22!Apr.!2013.!! <http://research.smeal.psu.edu/news/the?impact?of?rfid?on?supply?chains>.! 8 Kerr,!John.!"P&G!Takes!Inventory."!Procter'Gamble'Tries'to'Optimize'Inventory'Pdf'Q'P(1)' Q'SearchQDocument.com.!N.p.,!n.d.!Web.!23!Apr.!2013.!<http://www.search? document.com/q_search3.php?q=procter?gamble?tries?to?optimize?inventory>!! 9 Lee,!Calvin.!"Multi?Echelon!Inventory!Optimization."!Evant'White'Paper'Series!(2003):!n.! pag.!Evant.!Web.!24!Apr.!2013.! 10 "Mission!&!Values."!Target'Mission,'Values'&'Stories'Behind'Them.!Target!Brands,!Inc.,! n.d.!Web.!23!Apr.!2013.!<https://corporate.target.com/about/mission?values>.! 11 Saunders,!Erin.!"Optimizing!Our!Guest?Focused!Supply!Chain."!Telephone!interview.!23! Apr.!2013.! 21
  23. 23. 12 "Search."!Detergent'at'Target.!Target!Brands,!Inc.,!n.d.!Web.!23!Apr.!2013.! <http://www.target.com/s?searchTerm=detergent>.! 13 Sherrod,!Elizabeth.!"First!Look!?!Forces!Changing!the!Supply!Chain!and!Retail! Sector."Commercial!Real!Estate!Development!Association!2012.!NAIOP.!21!Apr.!2013! <http://www.naiop.org/en/Magazine/2012/Fall?2012/Business?Trends/Forces? Changing?the?Supply?Chain?and?Retail?Sector.aspx>.! 14 "Target!Distribution!Center!Careers!Video!Transcript."!Target'Distribution'Center' Careers.!Target!Brands!Inc.,!n.d.!Web.!23!Apr.!2013.! <https://corporate.target.com/Videos/Transcripts/4362/distribution?centers>.! 15 Traub,!Todd.!"Wal?Mart!Used!Technology!to!Become!Supply!Chain!Leader."!Arkansas' Business.!N.p.,!n.d.!Web.!23!Apr.!2013.! <http://www.arkansasbusiness.com/article/85508/wal?mart?used?technology?to? become?supply?chain?leader?page=all>.! 16.!Anderson,!George.!"Will!RFID!Take!Off!Now!That!Tag!and!Hardware!Prices!Have! Dropped?"!RetailWire.!N.p.,!n.d.!Web.!24!Apr.!2013.! <http://www.retailwire.com/discussion/16719/will?rfid?take?off?now?that?tag?and? hardware?prices?have?dropped>.! 17.!Bonsor,!Kevin,!and!Wesley!Fenlon.!"How!RFID!Works."!HowStuffWorks.!N.p.,!n.d.!Web.! 24!Apr.!2013.!<http://electronics.howstuffworks.com/gadgets/high?tech? gadgets/rfid.htm>.! 18.!Lacy,!Stephen.!"How!Procter!&!Gamble!Created!$1!Billion!in!Value!With! Waste."Greentech'Media.!N.p.,!n.d.!Web.!24!Apr.!2013.! <http://www.greentechmedia.com/articles/read/How?Proctor?Gamble?Created?1?Billion? in?Value?with?Waste>.! 19.!"Target!Corp."!Growth,'Profitability,'and'Financial'Ratios'for'(TGT)'from' Morningstar.com.!MorningStar,!n.d.!Web.!24!Apr.!2013.! <http://financials.morningstar.com/ratios/r.html?t=TGT>.! ! ! ! ! 22

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