Target: using supply chain to create growth

In this report, we look at how Target’s $7bn investment programme for its stores and supply chain has driven growth for the business.
Essentially, Target’s supply chain strategy consists of the following pillars:
* Flow replenishment (Less stock in-store / Demand-driven replenishment / Upgrading its WMS’s)
* Omnichannel shopping (Stores fulfilling online orders / Acquisitions / Drive-up service / “You shop, Target delivers”
* Considering stores as distribution hubs (Establishing picking routines / In-store pickup / Increased responsiveness)
* Investing in people (Developing customer service / Increasing wages / Investing in training)

The investment programme has resulted in the following:
* 40% drop in out-of-stocks in the first quarter of 2018
* Stores with functional fulfilment services are able to offer a more responsive omnichannel shopping proposition
* Target has significantly moved ahead of many of its competitors in terms of offering same-day deliveries (thanks to its acquisitions) and its stores’ ability to fulfil online orders
* Through its investment in people, Target has been able to create a team of loyal, motivated associates who are likely to stay at the business for longer