A Store Chain Unfazed by a Few Empty Shelves

by:CAI YI JIE     2019-09-17
1992 this is a digital version of an article from The Times Print Archive, before it starts online in 1996.
To keep these articles as they appear initially, the Times will not change, edit, or update them.
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Every day in the busy running
Until Christmas, customers at more than 500 target discount stores across the country found empty display racks for hundreds of different products.
Are the executives at Target headquarters crazy about sales losses? No way.
When considering changes in size and color, the average Target store handles about 60,000 different items.
In a world where suppliers are sometimes unable to deliver, where consumers are making unpredictable responses to sales, where weather changes can cause problems with certain products, and where small items are stolen, some empty shelves are inevitable.
However, any Volkswagen follower like Target who can maintain about 99% product displays at any given moment is among the industry leaders.
Fewer buyers ordered this year, and despite joining many other retailers to order less for the current Christmas season, target maintains a healthy \"inventory\" average.
Last spring, when buyers began to make promises for Christmas, a modest recovery did not show up and the memory of the last holiday backlog was fresh ---
This year, they vowed to avoid this by managing inventory more tightly.
Inventory management skills will dazzle previous generations, which has become a prerequisite for keeping clearance sales to a minimum and earning modest profit growth from today\'s crowded, fast market
Changes in the retail market.
The advertising results have already appeared this year. some people say that the bargains were reduced last year. A minute shopper
Isaac Lac, industry consultant at tactical retail solutions, said: \"Customers who play chicken with retailers, waiting for the last 10% discount, may end up feeling frustrated . \"in New York.
Donald Hyde said Target has reduced its inventory this year by about $800,000, or a total reduction of about $0. 4 billion, the executive vice president of the company responsible for distribution.
Target sold more than $9 billion last year and finished at around $10.
This year 4 billion
Retailers face different challenges and need different inventory management strategies.
Major department stores like Bloomingdale or Marshall Field, owned by Target\'s parent company, Dayton Hudson, may be 10 times more than the Target store\'s choice.
Most of their inventory has higher margins than Target, but it also relies more on fashion and will lose value soon.
But Target\'s experience provides a case study on reasonable strategies, the benefits of new technologies, and a number of countless nitpicking
Tenacious operational details can make a difference between a pleasant holiday and a disastrous one.
\"This autumn is almost perfect . \"
Heide said he took a visitor to the company\'s large regional distribution center in Fridley, a suburb of Minneapolis, where stores that were not ready to buy last year were already available in the receiving area
Despite Target\'s growing reputation in inventory management, Wal-
Mart, the industry giant in Ark Bentonville.
Still seen as a step ahead and determined to stay there. \"Wal-
Wal-Mart is a mobile target, \"said Edward Weller, analyst at Montgomery Securities in San Francisco.
Second, analysts say
The largest retail chain is also rapidly improving in such nameless disciplines. Mr.
Wal-Mart, Weiler believes
The sales and management costs of Wal-Mart\'s standard discount stores account for about 17% of revenue, about four or five percentage points lower than Target, and Kmart is in.
The advantage of only a few percentage points can be seen as a higher profit, or can be used as a competitive club, offering a substantial discount on some items that are frequently purchased, such as movies and healthcare products.
Efforts to narrow the gap in advertising targets began in the medium term.
In 1980s, when the chain began to ride the wind and waves, the whole industry is now roaring.
One is a new technology based on laser scanners and computers for processing the data they produce.
The second is a new emphasis on teamwork, not only between previously separated functions such as procurement and distribution, but also between targets and suppliers.
This new technology gradually makes it easier and cheaper to keep track of the exact location, current prices and other useful data of most items in the store or on the way.
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Today, like most retail chains, Target uses scanners at the checkout counter to save time and avoid errors, writing a sales record by the way.
The portable scanner deployed this year is a relatively new issue that connects the radio transmitter to the computer in the store.
Accurate positioning of warehouse staff-
Handheld scanners read barcode labels on shelves that have little or no inventory. A hand-
The monitor connected to the scanner immediately tells them if there is a supplement in the storage room.
When brought to the storage room, the same scanner tells the employee where to find the stock or if it is ordered from the distribution center.
\"In the past, the people in our storage room spent 80% of their time looking for things that didn\'t exist,\" said Jim Bermar, regional manager of Target stores in the northern suburbs of the city.
Investment in scanners is related to other funds
Saving in retrospect seems to be a change of common sense.
For example, warehouse staff must scan the product into the inventory tracking system when it arrives and check regularly to ensure that the product is not moved.
Just as the automaker found the robot to work best after simplifying the manufacturing process as much as possible, target realized that if it redesigned the warehouse to smooth the flow of the product, its scanner data would be more reliable, there are fewer opportunities for mistakes.
The simple benefits have also stimulated efforts to reduce warehouse inventory.
Target officials said nearly half of the products delivered to their stores were in the storage room for some time five years ago. Now, Mr.
Bermal said Target can be very matched with the store sales model and delivery schedule in his area, and almost 85% of the products are delivered directly from the truck to the floor display.
Advertising due to such efficiency.
Bermal estimates that only about 20% of a store\'s salary is used to store items on the floor, and the warehouse is organized to support it, compared to about 40% before Modernization begins.
The same dynamics are reshaping the operation of Target\'s 7 distribution centers, and more products from suppliers are scanned into the inventory monitoring system on arrival and immediately transported to the truck by conveyor belts, shipped to various stores.
This new technology allows the previously unimaginable speed and accuracy of inventory management, but requires suppliers to be treated as members of the inventory management team.
Changes within the two industries are the increasing use of automatic replenishment systems, in which retailers and suppliers agree to regular delivery without placing orders, as well as electronic data exchange, entry of orders, confirmation, changes, performed without filling out a piece of cardboard pallet display, and sometimes even paid.
But the company must also make revolutionary organizational changes.
In Target\'s case, seven years ago, the company set up a company inventory management team to work with the sales organization that handles purchases.
Linda Ahlers, Target\'s senior vice president of commodity planning and control, said: \"In the past, no matter what the buyer bought, we distributed it, that\'s it . \".
Now, her team makes buyers more aware of the stock impact of buying various quantities and helps redistribute deliveries between stores as sales trends emerge.
In addition, the participation of women
Ayers\'s team often makes money.
Save the changes that the company buyers never thought about pursuing.
\"Sometimes suppliers who automatically replenish inventory have arranged five for us-
In the lead time of the day, they can do two things easily, \"Ms. Ahlers said.
A version of the article appeared in print in December 23, 1992, on page D00001 of the national edition, with the title: a store chain, not surrounded by several empty shelves.
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