Target’s Supply Chain
Unit 2 Assignment
Janell
GB570 Managing the Value Chain
Aaltonen, P.
Kaplan University
September 20th, 2012
Target’s Supply Chain
The main purpose of this paper is to show my knowledge of the supply chain and relate it to Targets supply chain reviewing if target has an efficient supply chain set up. The head corporate office is in Minniapolis but target has many stores throughout the world. Their main strength is their customer service which keeps the customers remaining faithful not only to the store but to targhets personal brand as well. If you want to know the effectiveness of targets supply chain then continue to read and relate what I am saying to your pwn personal shopping experience. By the
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Now the process is done electronically which leave little room for human errors. When Target receives its shipments it is received not only using the online computer system but the same APP is used on the hand held pda’s. This makes it easier to receive the trucks and to cancel any truckload before it comes to the store. Also being able to see the shipment a head of time allows the company to distribute the merchandise to the stores that are in need of the merchandise. This is a big part of the chain because if the merchandise is not shipped then the company might not be able to meet the demand of the consumer. In order to meet their needs the product must be in stock. Target has a strong logistics background. So not only is supply incorporated but the demand segment is also.
Suppliers
The company has two types of suppliers, local and oversees. The main concept is to make sure the correct price is getting to the customer. The suppliers range from to U.S. to china (mainland) to India and Pakistan. They have many suppliers across the world. Target uses EDI, which is electronic data interchange. This saves time because all transactions are done electronically which leaves room for fewer errors. The process is cost effective and created with speed. All data is transferred between the suppliers and target. The process starts from Target creating the order and it ends with the supplier getting their payment. The suppliers also keep track on how the
Target Corporation is an evolving company. Target has great expectations for its future. For the year 2015, Target aims to expand its experience in order to effectively alter their customer’s expectations and shopping behavior. Target’s industry outlook starts with opening fifteen new stores for the year. The strategic store growth plans focus on localization and customer experience. Target will establish new store formats such as TargetExpress and CityTarget, while also offering new experiences, merchandising layouts and innovations in its general merchandising stores. (Target.com) The retailer’s TargetExpress is the smallest store format at approximately 20,000 square feet and aims to provide customers with effective quick trip shopping experience.
The purpose of this paper is to discuss Target’s strengths, weaknesses, opportunities and threats. This paper will also talk about how Porter’s Five affects Target’s business decisions.
Target Corporation (NYSE:TGT) is the leading large-format general merchandise and discount retailer in the U.S., challenging Wal-Mart in electronics, toys and apparel while also seeking to differentiate with higher-end fashions and products for an upscale audience. As of the close of their latest fiscal year (FY2011), Target operated approximately 1,760 stores encompassing 233,000 square feet in 49 states and the District of Columbia. The company is divided into the retail and credit card divisions and moves the majority of its products through a highly integrated network of 37 different distribution centers, which include four food distribution centers. Target is one of the most well-entrenched large format retailers in the U.S., has the ability to manage their pricing strategies at a level of accuracy and precision that is comparable to Wal-Mart (Henderson, 2001). Unlike Wal-Mart, Target concentrates on a value-based message that concentrates on quality and price differentiation to sustain their gross margins while Wal-Mart concentrates on supply chain efficiency and a continual reduction of supplier and transaction costs (Krishnamurthi, 2001).
The aim of this paper is to highlight the strategic position of the company with an overview of its internal and external environment. The study of its strategy, design and other forces, one can easily gauge why and how target has managed to become the retail giant it is today.
When the trucks arrive a small team unloads and bring product to their designated section of the store. For apparel, the clothing is put on racks and wheeled out. Where a small team folds, locates and displays them according to planograms and sets. The process of unloading, locating, displaying should be concluded before the store opens with no products on the sales floor. This is to keep the store looking clean and providing the customers with a clean, stocked environment. The effectiveness of Targets current distribution is good; however, inventory counts often have a crippling effect on the company. Since target launched their online pickup and ship from store the company has noticed an error in their operations. Their inventory counts did not refresh fast enough, if a guest just bought say a dress, it would not be accounted for, for 3-5 hours later in the system. Thus, issues for customer satisfaction would occur when a guest would either see online that we had it in stock, or order it for in store pick up and us not being able to fulfill their order. By improving their inventory management system, Target could see an increase in sales, customer satisfaction and online and in store customer traffic.
Walmart’s approach means frequent, informal cooperation among stores, distribution centres and suppliers and less centralized control. The company’s supply chain allowed consumers to effectively pull merchandise to stores rather than having the company push goods onto shelves by tracking customer purchases and demand. Through the use of universal product codes, implementation of Retail links at the store, use of RFIDs and smart tags, suppliers and manufacturers within the supply chain synchronize their demand forecaste under a collaborative planning, forecasting and replenishment scheme, and every link in the chain was connected through technology that includes a central database, store-level point-of-sale systems, and a satellite network. As per report, there was a 16% reduction in out-of-stocks with the use of RFIDs and pointed out that the products using an electronic product code were replenished three times as fast as items that only used bar code technology. These strategies have made Walmart to be the dominant force over other competitors with information and technology helping its supply chain strategy attain greater
In today’s world, especially in Canada, consumers generally want to satisfy all of their needs in a way that saves them the most time and energy. In order to meet this need, Target offers their customers the chance to buy different products that they would normally have to go to two or three different stores
This report examines Target Corporation’s performance in a detailed strategic audit. The audit includes an external, internal and strategic analysis as well as a recommended course of action. The findings of the audit recommend a robust on-line/mobile presence to complement in-store sales, and to increase future earnings to remain competitive by building upon physical assets, brand value and logistical capabilities.
This will allow more products to be placed on their shelves in view of customers and allow prompt more purchases to be made by customers. Hopefully, the massive amount of money (five billion dollars to be exact) Target plans to spend on upgrading the distribution and technology aspects prove to be beneficial and more efficient for the chain of stores and its customers (Marshall, Solomon, Stuart, 2012). Target will also have the opportunity to increase their selection of online items (Marshall, Solomon, Stuart, 2012). These changes will also make the order online and pick-up in store option more streamlined since there will more of a designated space for those pick-up orders and will provide for easier access to those items once they have arrived at the store. Target needs to locate that fine line between offering a wide selection of items in their store and the point at which it just becomes overwhelming and ineffective shopping for the customer. If Target decides to continue providing the vast variety of items in-store they could benefit from utilizing a form of shopping called “showrooming”. This is used to allow the customer to visit the store in person to view and experience the product just as they would in a showroom, then make the final purchase online (Kalyanam & Tsay,
Target Corporation has recognized itself as one of the top retailers in the United States market on the basis of excellent service quality, customer experiences, operational excellence, strong financial position, and a wide array of product offerings. Through its high degree of service orientation at physical outlets and adoption of fair business practices, Target Corporation has become the most distinctive retailer in the eyes of its potential customers. Being one of the top-notch retailers in the United States, Target Corporation has to carefully strategize on its business operations and marketing tactics so as to keep itself in the row of competitive brands of the industry.
To truly enjoy the understanding of such a large distribution channel I believe we need to start with the beginning of the process which is the suppliers. When it comes to purchasing power, no one is stronger than Walmart. With this purchasing power they are able to shape their suppliers the way they feel necessary. Walmart suppliers are required to use their just in time automation which ensures Walmart racks are always supplied but avoiding inventory. In the suppliers eyes, Walmart is a merchant that
The procurement section of Target’s supply chain is an essential part of how it replicate costs to customer requirements. The overall affiliation between customer fulfillment and the supply chain are closely linked to products that are designated based on benchmarks that have been appropriately matched to target costing structured with market criticism and feedback provided. When focusing on purchasing products to sell to customers, the organization selects and processes the best option that best matches Target’s
Target Corporation is a well-known American discount retailing company, founded in 1902 and is headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the U.S. (Walmart being the largest) (Target, 2014). Target’s analysis will provide an insight into the corporation and its working. It look at and evaluate it in terms of terms of its effectiveness in each of these areas, such as: the structure, goals, agendas, boundaries, control, culture, politics, and decision-making processes. Based on the evaluation, this paper will help to provide suggestions for improvements within the different areas, if the need arises.
Target Corporation is the fourth largest retailer in the United States. The company operates 1,556 stores in 47 states. The company has three main retail divisions: Target Stores, Mervyn’s and Marshall Fields. Target Stores is the number two discount retailer in the country, trailing only Wal-Mart Stores, Inc. they have distinguished itself from its competitors by offering upscale, fashion-conscious products at affordable prices (Funding Universe, n.d.). Targets supply chain actives has been an important part of and one of the most significant reasons for its huge growth and success. The purpose of paper is to analyze Targets supply chain and related actives to understand its effectiveness and gain a better understanding on how their supply chain contributes to the company’s growth and success.
The company uses target pricing for the parts they purchase from suppliers. To Honda, customer satisfaction is top priority which they accomplish through suppliers competitiveness in quality, cost, delivery, development, and management. Honda gives its suppliers target costs and it reduces the cost through own ideas, technology, and improved productivity. Exhibit 1 illustrates Honda’s supply chain.