Target Tests Retail ‘Flow Center’ for Faster, Nimbler Distribution

Retailer’s supply strategy aims to reduce inventory in store back rooms, create more space for online fulfillment

By Jennifer Smith | May 14, 2018 

Target Corp. is testing a new distribution strategy aimed at speeding up its restocking and making the retailer more nimble at stores and online as it competes with rivals like Inc. and Walmart Inc.

The aim is to pare what Target calls its replenishment cycle from days to hours and reduce inventory at stores, especially at the retailer’s new small-format stores and locations in denser urban areas. The approach, now in pilot mode at a warehouse in Perth Amboy, N.J., also uses the same pool of inventory to replenish stores and fulfill online orders, a departure from Target’s existing supply chain.

Under the operation Target is testing at the New Jersey facility, called a “flow center,” the company sends shipments to stores more frequently and in smaller lots tailored more precisely to demand rather than shipping big cases of products, Preston Mosier, Target’s senior vice president of global supply chain and logistics field operations, said Thursday at an industry conference in New York. [Full Story]

PHOTO: Bloomberg News

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