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Target’s
supply chain is among the best in the retail industry, but
our goal is to make it truly world-class. Our current initiatives
are designed to shorten inventory lead times, reduce costs
and deliver more consistent in-stock levels, resulting in
a superior level of service to our guests and improved financial
performance for the corporation. During 2001, we made substantial
progress toward these objectives and we achieved the highest
level of in-stocks in our history. Going forward, we are continuing
to pursue a number of programs that support our ultimate vision
of world-class performance, including the development and
implementation of new processes, the investment in physical
capacity and technology, and the strengthening of our partnerships
with our vendors.
In order to ensure that the most-wanted items in our stores
are always available for our guests, we have established a
program to expedite distribution of our Top 1000 items throughout
the chain, and plan to more than double the scope of this
program in the coming year. We are also segmenting our assortment
and revamping our merchandise flow to accommodate unique handling
requirements due to rate of sale and predictability of demand.
Additionally, we are actively working together with our vendors
to manage our businesses efficiently and effectively. Specifically,
we are engaged in joint business planning; aligning systems,
measurements and rewards around common objectives; utilizing
pre-distribution agreements; and piloting our Collaborative
Planning, Forecasting and Replenishment program to increase
our efficiency and to improve the flow and accuracy of our
information and inventory.
During the past year, we opened our first import warehouse
to enhance our processing of seasonal and imported merchandise,
and we expect to open two additional import warehouses in
2003. We are also accelerating the pace of expansion for our
regional distribution centers, planning to nearly double the
number of our existing facilities by 2005. In addition, we
have totally replaced our distribution information systems
and plan to install a performance tracking system in 2002
that provides complete supply chain visibility from point
of need to store replenishment.
These initiatives, combined with our continuing efforts to
leverage our increasing capabilities and expertise across
the corporation, give us confidence that we are well-positioned
to attain world-class status.
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