MINNEAPOLIS, MN - Target executives say that they are hitting the "reset" button on the company's supply chain operations, in order to repair the damage done by what many have characterized as an overly hasty Canadian expansion.
"With the benefit of hindsight, if we could do it all over again, we wouldn't have opened up that many stores, that many DCs (distribution centers), in that short a time frame. I know that much," Target Canada's President Mark Schindele told Reuters. "We're now unwinding some of the decisions we made that were based on speed."
What does this mean for Target going forward? Target hopes that its three pronged approach focusing on its supply chain, pricing, and merchandise selection will prime the company for increased future growth.
According to Reuters, Target's plans start with a full recount of its inventory at all 130 stores in order to “reset” an overburdened supply chain.
The emphasis on speed during Target's earlier expansion caused multiple problems with the set-up of its online systems for tracking product distribution. This led to a major bottleneck, according to Schindele, with orders arriving at warehouses that did not match the records in Target's computers.
"If your data integrity isn't good, it's really hard to keep stores in stock," he said.
Target Canada is now in the position to fix these problems. Together with the planned supply chain reset, they now have the sales data after a year of Canadian operations to more accurately predict consumer demand and allocate resources to meet it.
In addition to an infrastructure reorganization, Schindele says Target will also be retraining its staff to better work with the company's inventory system.
In all, Target should walk away from this period with a better trained staff, a more robust inventory system, and a stronger supply chain. Schindele is confident that these changes will give Target the tools it needs to take on the challenges and opportunities of the future.
"We expect to see measurable progress this fall," Schindele noted optimistically.
With these steps in place, I certainly think Target has given itself the right foundation to make a rebound possible. How successfully Schindele and his team is able to implement their growth plan will play a big part in determining the future success of Target's Canadian operations.
