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Analysis of Target Australia’s Supply Chain

Inventory Management Practices and Tools

                Target Australia relies on an Order-to-shelf inventory management strategy (Bolduc, 2018). The focus of this strategy is to ensure a reduction in labour costs and backroom storage. In Order-to-shelf inventory management practice, the distributors or the warehouses are focused on repacking and unpacking items based on the prevailing layout of the store as well as the particular inventory requirements. The firm’s warehouse can organise and package the items for each store aisle rather than placing the obligation on the store to ensure that each item is sorted as its offloaded from the truck (Devin & Richards, 2018). The Order-to-shelf inventory strategy enables Target to complete regular stocks of the items available in its store outlets, order only the items they require to restock for the next day, and then all the materials will be delivered later at night to ensure that they are ready for restocking.

The inventory management practice works in favour of the firm in that it is effective in cost-saving. Under this practice, only little is available for storage since there is no excess inventory. Furthermore, the practices present under the inventory management process limit any existing chance for spoilage. In this case, everything is delivered on time (Devin & Richards, 2018). The company has also relied on the use of technology tools to manage its inventory. For instance, the firm relies on in-store analytics which enables the firm to measure its consumer traffic. With this information, it becomes simple to track inventory based on consumption and have an estimate of how to control it to prevent shortage (Bolduc, 2018).

The Role of Information in Target’s Supply Chain Management

Information plays a significant role in Target Australia’s supply chain management. According to Agyabeng-Mensah et al. (2019), information is effective since it enhances the firm’s supply chain performance, offering a foundation on the processes which execute the transactions and how the managers generate their decisions. For instance, the demand information offers a guide to the manager regarding the consumer requirements and how much inventory is available in stock, as well as when more products should be shipped to the facility.

Demand information collected by the firm is also critical for Target Australia’s supply chain management. Notably, the demand information will provide details about the firm’s product consumption rate and the amount of inventory required to ensure that the store does not run out of stock (Mathu, 2019). The demand information will guide the manager to decide on which commodities are in higher demand and which should be stocked highly and at what time. Moreover, this information is also desirable for the business’ supply chain as it guides the decision about how to plan inventory with a focus on cost-saving. Arguably, the demand information will direct Target Australia’s management to understand the benefits related to its Order-to-shelf inventory management strategy and the need to continue utilising the approach for the sake of cost-saving.

Supply Chain Risks and Strategies of Management

                Disruption is one of the supply chain risks currently affecting Target Australia’s supply chain. The disruption in the firm’s supply chain is mainly experienced as a result of the coronavirus pandemic which has affected global supply chains mainly due to the measures put in place to control the spread of the virus. According to Khadem (2020), Australia is one of the regions which have strongly been hit by the COVID-19 pandemic. Travel bans and lockdown are some of the measures put in place by the state with a focus on controlling the spread thus causing significant loss in revenue. Business supply chains of firms such as Target Australia have significantly been affected, hurting revenue and increasing the potential that the firm’s revenue will be hurt even further. Other suppliers such as Wesfarmers have also shut down their operations as a result of the slump in virus cases (Kaye, 2020). Delay in shipments as a result of the lockdown is a primary factor showing the supply chain disruption in that supply shortages are experienced in the stores as a result of the pandemic (Branson, 2021). The firm should increase its inventory since this is a requisite management strategy. Increasing inventory will focus on avoiding the impacts related to the disruption in the supply chain to ensure that consumers have desirable goods at their disposal at all times (Sayed & Sunjka, 2016).

                Delay is also a risk currently affecting Target Australia’s supply chain. It is a fact that delays are experienced at the ports as goods arrive in the country without proper documentation (Branson, 2021). The existence of the COVID-19 pandemic has worsened the situation despite the fact that the business operates with effective and reliable suppliers. Safety measures require that the suppliers deliver the goods based on the required standards which increase the cost of supply encountered by the firm. To address this risk, it is recommended that the business should obtain redundant suppliers. This should cater mainly to the high-volume commodities to prevent shortages.

                One of the lessons learned is that the firm should always be prepared for unexpected events such as pandemics. This will ensure that the business is ready to deal with its disruptions in due time. Lesson 2 is that redundant suppliers are more effective. This is because they are effective in counteracting supply chain delays.

Supply chain Innovations

The resource dependent theory shows that firms do not always value all the resources they need in the process of creating value. As a result, they will depend on each other to achieve their operational and functional requirements (Kholmuminov et al., 2019). Therefore, even with the disruptions and uncertainty in the supply chain, control exertion and manipulation strategies are effective in overcoming the supply chain risks to ensure a continued supply. This can be achieved through supply chain technological innovations.

                Relying on technological innovations such as the IoT is an effective factor that will boost Target Australia’s supply chain innovations. This innovation will enhance the visibility of the business in comparison to that of its competitors making it easier for the management to place its stock orders even amidst pandemics. This innovation will also speed the delivery process, thus avoiding product shortages for the consumers in the market (Gartner, 2017). It is also advisable that the business should consider on-demand warehousing. Although this may come at an extra cost for the business, it is highly recommended, especially amidst the coronavirus pandemic. Dunakin (2020) suggests that the warehouse will be effective for the business in achieving its demand needs since it will create a space for the firm to place its stock and use it when the need arises.