Target Corporation’s Supply Chain|
Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.
When dealing with supply chain management companies need a strategy for managing resources that go toward meeting customer demands for their product or service. Developing a set of metrics to monitor the supply chain so that it is cost efficient while delivers high quality and value to customers is very important.A company must select suppliers to deliver the goods and services they need to create their product. For that reason, supply chain managers must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. SCM managers can put together processes for managing their goods and services inventory, including receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing supplier payments. Supply chain managers schedule the activities necessary for production, testing, packaging and preparation for delivery. This is the most metric concentrated portion of the supply chain. A system where companies are able to measure quality levels, production output and worker productivity will yield the best results. Companies coordinate the receipt of orders from customers, develop a network of warehouses, pick-up to get products to customers and set up an invoicing system to receive payments.
Target was established in 1962 and is an American discount retailing company headquartered in Minneapolis, Minnesota. Target Corporation is one of the nation’s largest retailers with three independent, highly visible chains; Target Stores, SuperTarget, and formerly Target Greatland. Target Operations include highly competitive retail space, in addition to their superior understanding of logistics. Logistics is big business for this retail store as it sells everything from fashion to furniture in over 1,740 retail outlets in 49 states. Its supply chain includes several thousand vendors, distribution centers, and its core carriers and consolidators. [update] Target Corporation operates 26 distribution centers throughout the United States; three new distribution centers in 2006 and one in 2009 to support the growth of its stores. With the exception of a few vendors, distribution centers shipped items directly to Target stores. The retail chain's first distribution center opened in Fridley, Minnesota, in 1969. Target offers a wide variety of product assortments and it has a variety of suppliers. Target is in a favorable position with their suppliers due to their size. Furthermore, Target poses the threat of backward integration via expansion of its own private-label offerings. Target is more susceptible to economic fluctuations compared to other discount retailers due to its greater proportion of “upscale” products. When buyers have less discretionary income they will not be as willing to pay a bit more for Target’s stylishness or higher quality. Target has seized the opportunity to capitalize on its bargaining power while taking measures to lower costs. Costs are reduced by pressuring vendors to absorb merchandising costs and by eliminating distribution and inventory costs through improved supply chain management controls. Vendors see the benefit of their products being offered at Target so they must cooperate. Target has automated and expanded its distribution facilities and requires vendors to prepackage their products or ship them “store-ready.” Requiring suppliers to...