Target 2003 Annual Report Download - page 14

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Supply Chain and Technology
Positioned among the best in retail, our supply chain helps drive
sales, reduce costs and ensure the availability of products our guests
most want and need. Through continued investment in technology,
infrastructure and operational improvements, we are pursuing
initiatives that we believe will increase both our guests’ satisfaction
and our profitability. In order to sustain this competitive advantage,
we have put our supply chain on the fast track.
evelop. Deliver. Delight. Being first with
new trends or products is one of the ways
we delight our guests. And, shortening our
merchandise lead times is one of the ways
we maintain our fashion leadership position.
To speed delivery of product to our stores’ shelves, we
are using sophisticated online tools to design product
and to negotiate pricing, production and delivery terms.
Additionally, we are leveraging the global expertise of
AMC to identify reliable vendor partners, source materials
and manufacture the high-quality, fashionable merchandise
our guests expect. Our efforts in recent years have pro-
duced a significant reduction in the length of our supply
chain and we remain committed to achieving further
improvements moving forward.
Strengthening our Network
To support our new store growth and better serve our
existing stores, we continue to expand our distribution
capacity and invest in leading-edge technologies. Our
current distribution network includes 19 regional distri-
bution centers (RDCs) and three import warehouses, with
more than 90 percent of our general merchandise flowing
through our RDCs. In addition, we are steadily expanding
our self-distribution of dry grocery products, with nearly
50 percent of these items handled in-house in 2003.
The recent integration of import warehouses into our
supply chain adds an important dimension to our strategy.
These facilities store seasonal and imported merchandise
and allow us to funnel goods through our regional distri-
bution centers to our stores as demand warrants. By
providing incremental distribution capacity, these facilities
also increase the effectiveness of our item segmentation
strategy, allowing us to move high-demand items through
our distribution process with greater priority.
Technological enhancements in our RDCs continue to
improve the productivity, accuracy and speed within our
supply chain.
• In 2003, we began implementation of an electronic
labeling system called Automated Receiving Technology
(ART). This program utilizes real-time information
In-Stock Levels Being in-stock on the items our guests want
is a key factor in delivering consistent guest satisfaction and
generating strong incremental sales and profits. To achieve these
results, we are focused on initiatives that optimize inventory flow
and balance in-stock reliability with inventory control. We have
made tremendous strides toward achieving our goals and believe
we are well-positioned for the future.
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