Target Corporation: Facility Planning Target Corporation Started

Target Corporation: Facility Planning

Target Corporation started working on improvement of operation logistics back in 1991 when it realized that back end of its supply chain was causing problems and had a big room for improvement. They needed better facility location planning especially for returned merchandise which had earlier been a messy process since each retail store had its own back room for returned merchandise and there was no centralization. For better facility planning, Target Corporation began using a more centralized system for returned merchandise so managers in each store could focus on merchandise that needed to be sold and on inventory checking instead of dealing with merchandise that had to be returned to factories.

The managers needed to focus on availability of right number of needed merchandise and with better facility planning, managers could better deal with theft and damages caused to returned merchandise that was lying idle in back rooms while further disposition was awaited. If there were a centralized location, then vendors could look forward to dealing with one large shipment of returned merchandise instead of small regular shipments from Target stores nationwide.

It was however not easy to build a reverse logistics program and Target was itself not prepared to design or execute such a plan and hence it joined forces with third party operators who specialized in improvement of supply chain efficiencies. GENCO has since then been working on improvement of supply chain efficiencies for Target corporation. It helped Target in designing a central return center that uses software to keep track of all returned merchandise from all Target retails stores nationwide. The software not only keeps tracks of the returned items but also tracks their final disposition.

Interestingly for management of CRC, Target doesn't have its own team but instead relies on GENCO's team that checks each item and sends it forward to specific vendors. It is a huge facility which works as a basic distribution system but only backwards. GENCO tracks the items and sends them back to original vendors, this huge 190,000 sq. feet storage space offers all the services that Target originally sought from a central return system.

This huge storage space is owned by GENCO but because of their commitment and partnership with Target, they use this space for Target. Target team has full access to the software that manages and tracks all returned merchandise and all other activities at CRC. This has been done so that while Target has complete information of the reverse logistics, they do not have to hire employees to work at CRC and can instead on focusing on more important daily operations.