Target Corporation's Supply Chain Management

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Target Corporation Supply Chain Assignment
Target’s Supply Chain
Unit 2 Assignment
GB570 Managing the Value Chain
Dr. Rita Gunzelman
Kaplan University
December 12, 2011
Target’s Supply Chain
The purpose of this paper is to show evidence of cohesive knowledge of the supply chain and how it works by the exploration of Target Corporation’s supply chain. Target, one of the nations largest retail chains, first opened in 1962 in Minnesota as key leadership were looking for new ways to move from a family-run (The Dayton Family) department store to a mass market national chain strengthening customer relationships by appealing to value-oriented shoppers in quest of a higher-quality experience. Today, Target operates approximately 1750 stores (including nearly 240 SuperTarget stores) in 49 states with Gregg Steinhafel as their CEO. We will review the effectiveness of Target’s supply chain and analyze if it meets the necessary expectations of their demand chain. (Target, 2011) Overview of Target’s Supply Chain

Target, the 2nd largest discount-retailer in the U.S. has focused on their slogan, “Expect More Pay Less” and strategizes to increase optimal value and growth for global networking, an exclusive upscale and trendy product line, and value added service that creates a distinctive niche throughout the world. This multi-billion dollar company set out to change how consumers thought about discount shopping by offering a more upscale shopping experience. In 1998, Target purchased Associated Merchandising Corporation (AMC) as part of the development of their global service network in efforts to offer products at more competitive prices and survive one of their biggest competitors, Walmart. Target and its founders have always focused on constantly reducing costs, improving sales, adopting efficient and competent distribution and logistics management systems while using sophisticated and cutting-edge information technology (IT) systems—thus creating the makings for an efficient supply chain management system. Components of Target’s supply chain that will be evaluated include product and service specs, order processing and management, evaluation of delivery options, procurement, inventory management, processing/manufacturing, and transportation (Target, 2011; Walters and Rainbird, 2007). Product and Service Specification

Target believes in a differentiated approach to set them apart from their direct competitors and provide products and services based on what their customer needs and wants. They begin by offering customers a more upscale shopping experience that makes shopping easier in stores that are always clean and attractive with more trend-forward merchandising at lower costs. For added value and convenience for the customers the development of new store prototypes birthed where they are offering more than just a general merchandise store with pharmacy, photo processing center, Food Avenue restaurants, but a grocery store with fresh produce and quality food items, Target.com website, an optical department, their own credit card, more exclusive deals with various name brands and designers, and sell more gift cards than any other retailer in the country. Also, unlike Walmart, Target does not sell firearms (real or toy firearms that look real) or tobacco products. As well, Target does not promote services or items on their public address system or use music in its stores. All of this, with a highly contemporary design, signage, and graphics enhances the attractiveness and appeal of the store along with knowledgeable and well-dressed employees (who are referred to as Team Members) attract a different type of customer or “Guests” than that of Target’s direct competitors. Target tends to attract a younger, affluent, educated, and fashion-forward customer. Order Processing and Management

To further deliver on Target’s Brand Promise and optimize their supply chain network, leveraging cutting-edge logistics technologies to drive...
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