By Dan Calabrese ——Bio and Archives--April 29, 2016
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On Wednesday, the fourth-largest U.S. retailer blamed its "incredibly complex supply chain" for unacceptable stock levels at its stores this year, forecasting weak growth in current quarter sales at established stores. The focus on the supply chain network is the latest move by CEO Brian Cornell, who took charge a year ago and announced a restructuring plan in March. Under that program, Cornell eliminated several thousand corporate jobs, revamped grocery operations and announced a $1 billion investment in supply chain technology.
Mulligan, who was promoted from the position of chief financial officer on Monday, said that in-store product stock levels have been getting worse over the last couple of quarters. Kathee Tesija, the company's former chief merchandising and supply chain officer, was moved to an advisory role in June. "Given the breadth and complexity of the business, it will always be a challenge to be in stock on every item in every store... but our guests need us to be consistent in delivering everyday essentials," Mulligan said. Target's supply-chain problems have grown more acute as it has expanded its offering of consumable goods such as meat, fresh produce and dairy products, which in turn have brought customers back to their stores more frequently than in the past.I'd love to make some snarky comment like, "Maybe if Target would concentrate more on stocking the shelves and less on social engineering, they could keep goods available for people who want to buy them." But I know that's not the reason. Target constructed an inefficient supply chain that reflects an outdated business model. That has nothing to do with their horrible decision on bathroom policies. But I'd like to know this: If I can't depend on the store to have what I want, and the store appears to be quite hostile to my values, why would I even consider shopping there? I wouldn't. And I'm not. If enough people feel the same way, that stock value won't recover any time soon - if ever.
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