Target is aiming to address two key supply chain challenges—inventory management and trailer unloading—by leveraging technology advancements, according to Chief Supply Chain and Logistics Officer Gretchen McCarthy.
The retailer’s diverse product inventory, which helps attract customers, can be difficult to forecast and manage. This creates a need to prioritize certain products when necessary, while acknowledging that not all inventory is of equal importance. Poor inventory flow can lead to empty shelves and a clogged supply chain.
Target is looking to reduce its inventory levels by utilizing AI to enhance forecasting algorithms, improve inventory positioning, and make more informed decisions regarding stock. Strengthening inventory management has been a priority, especially after the company’s struggles with excess stock in 2022, which impacted its financial performance. Enhanced demand forecasting, AI, and machine learning are among the technologies the company is focusing on to optimize its supply chain.
In addition, Target is experimenting with new ways to improve the unloading process at its stores. The current method of unloading trailers from distribution centers can be inefficient, with employees sorting through thousands of SKUs and cartons. Target is testing technology and automation in some of its facilities to streamline this process, reducing the manual sorting required and speeding up the unloading process to better support store operations.
Target’s focus on maintaining an efficient inventory mix and ensuring products flow smoothly into stores is driven by customers’ increasing demand for reliable stock availability, both online and in-store. Accurate inventory data is crucial in determining if products are available and eligible for preferred order fulfillment methods. The company has observed that customers frequently use the Target app to check local store inventory before visiting, highlighting the importance of displaying up-to-date availability on the app.
This shift in customer behavior has led Target to reconsider its approach, viewing the app as the primary point of interaction for many shoppers, rather than the physical store.
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