The past two years have been both terrifying and exhilarating for retailers. They’ve experienced the lows of pandemic-induced shutdowns that kept customers away from stores as well as the highs of an exploding online marketplace.
Managing it all for Target is Arthur Valdez Jr. As executive vice president and chief supply chain and logistics officer, he oversees all aspects of Target’s global supply chain and logistics network, including inventory management, replenishment, fulfillment, global transportation, logistics, and distribution.
Valdez joined Target in 2016, bringing more than 25 years of retail supply chain and logistics experience to his new role. He previously served in senior leadership positions at Amazon and Walmart. He has spent much of his career building retail supply chain networks in North, South, and Central America as well as in Europe and Asia.
The son of Mexican-American and Cuban parents, Valdez was the first member of his family to attend college. A graduate of Colorado State University, he currently serves on the university’s Global Leadership Council as well as on the boards of directors for Advance Auto Parts and Shipt. He also volunteers his time to mentor other first-generation and minority college students, and assists women and minorities in developing their careers and progressing within Target. He spoke with CSCMP’s Supply Chain Quarterly Executive Director David Maloney about the retailer’s innovative stores-as-hubs model and the future of automation and robotics in Target’s supply chain operations.
CAPTION
NAME: Arthur Valdez Jr.
TITLE: Executive vice president and chief supply chain and logistics officer, Target
EDUCATION: Bachelor’s degree in business, operations management from Colorado State University
PREVIOUS EXPERIENCE: Before joining Target in 2016, he served in several positions with retailer Amazon that included director of operations; vice president of operations at Amazon U.K.; vice president, North American supply chain and transportation; vice president, worldwide transportation; and vice president, operations international expansion (supply chain, fulfillment centers, transportation)
LEADERSHIP: Council of Supply Chain Management Professionals (CSCMP) member; serves on the Colorado State University Global Leadership Council, as well as on the boards of directors for Advance Auto Parts and Shipt; mentors first-generation and minority college students, and assists women and minorities in developing their careers and progressing within Target
You have many years of experience managing supply chains for retail companies. How has supply chain management changed during your time in the industry?
Supply chains—really, the logistics of supply chain—have evolved considerably over the last 30 years. Early on in my career, supply chains were decentralized; there were several disparate parts to the whole. In the 1990s, the practice of supply chain management was popularized. You saw companies streamlining the planning and logistics of their supply chain network. Ten years later, that evolution morphed into a focus on supply chain integration in service of speed—that is, getting the most out of the network by consolidating or integrating tasks to reduce the number of “touches.” And over the last decade or so, we’ve seen the practice of automating supply chains and the introduction of mechanization and robotics with a more holistic view of the end-to-end process. This most recent change has brought greater insight into inventory, both upstream in supply chain facilities and downstream to stores and digital. It’s this modern approach to supply chain logistics that feeds Target’s path forward.
At Target, our stores are at the center of what we do. We’ve invested in our stores as local shopping service hubs. Doing so has enabled us to fulfill a rapidly increasing number of digital orders by improving speed of inventory, adding throughput capacity, and lowering cost. And we’re building a precise supply chain to keep those stores well-stocked and ready for guests.
You’ve worked for a number of leading retailers. How does Target’s supply chain compare with those other operations?
I’ve had the opportunity to work across the retail sector, and one thing that really stands out to me about Target is the balance of the investments in our people and innovation for an improved guest experience. The past two years have been great proof of that, as our investments in our team led to better innovation in service to our guests, which drove business growth on top of growth. Our team is the connection between solving for improved distribution processes and technology, which allows us to deliver safety, ease, reliability, and even joy during times of uncertainty.
In addition, we set ourselves apart through our stores-as-hubs model to sort and ship product, creating efficiencies across our supply chain and leveraging the talent of our team members.
Target has experienced tremendous growth in online sales. How has that changed your distribution strategies?
During the pandemic and the growth of online shopping, we knew we were playing a crucial role in communities across the country, making sure our guests had what they needed to take care of themselves and their families. The investments we had made ahead of time helped us play an essential role in our communities where they were choosing to shop online, while putting in place the building blocks for continued growth in years to come.
To do so, we accelerated new capabilities in our supply chain that were needed to support the growing demand in our stores and enable Target’s growth for the weeks, months, and years ahead. From opening new supply chain facilities that could move inventory in new ways to scaling robotic sortation for more precise store replenishment to introducing sortation centers that give stores more capacity to fulfill online orders—we continue to prioritize the investments that will support our team and fuel Target’s growth.
You mentioned that Target has begun using stores as local service hubs. Could you describe what you’re doing?
Target has spent years building and scaling capabilities that put our stores at the center of how we serve our guests, no matter how they choose to shop. Our stores are the heart of our business and play a critical role in inspiring our guests; powering fast, convenient in-store and digital shopping trips; and supporting and developing our incredible team.
The investments we’ve consistently made to put stores at the center of our operation have given us flexibility to deliver on our commitments to team members and guests, deepening trust in our brand and positioning us for future growth.
When 2020 arrived, our stores were already positioned as local shopping service hubs to meet guests’ needs quickly and at a lower cost, with the flexibility in our operations to ramp up to meet growing demand. Prior to that, we had made investments in our supply chain to support our stores-as-hubs model—from making store replenishment faster and more precise to building new capabilities so our facilities could serve guests in many ways.
Target’s continued investment in its stores-as-hubs model places our more than 1,900 stores at the center of how we serve guests, continuing to enhance the guest experience, including shipping online orders in store and offering same-day pickup and delivery, while providing an easy and safe in-store experience for our guests.
Target has recently acquired several businesses, including Shipt, Grand Junction, and Deliv. How have these helped you meet your service commitments?
Today, the e-commerce race is focused on speed. And while that’s a crucial component of delivery, the future will be much more about precision with a focus on providing a customized, local experience and ultimately giving consumers even more choices and control over how they shop.
The investments we’ve made over the last few years have allowed us to integrate Target’s technology, facilities, and operational capabilities to be even more precise and efficient, allowing us to create a customer-centric experience that’s fast and helps fulfill orders closer to the guest and drive growth of our digital delivery.
Target acquired Shipt and Grand Junction in 2017 to bolster our fulfillment capabilities and provide quick and efficient same-day delivery to guests across the country. This accelerated the work we had done to improve our speed of delivery to allow guests to get products on their own terms. Our acquisition of Deliv’s technology in 2020 is another opportunity that focuses on last-mile delivery at Target, ensuring stores are kept at the center of our strategy and lowering shipping costs, all while delivering packages even quicker.
Our continued investments and innovation will drive growth and differentiation for years to come, including bold investments across the business of $4 billion annually.
Can you talk about your new facility in New Jersey that fills both store replenishment and direct-to-consumer orders from the same pool of inventory?
Supply chain facilities like the one in Logan, New Jersey, were created to use one inventory for however the guest needs it—whether we send it to a store or ship it right to a guest. Having the capability to do both allows Target to get orders to guests faster and keep our shelves stocked by delivering the right amount of merchandise to a store when it’s needed and in a way that makes it easy for our store teams to put it on the shelf.
Target’s aim is to replenish stores in hours and to maximize the inventory placed on the sales shelf, especially in new small-format stores and locations in denser urban areas. This approach also uses the same pool of inventory to replenish stores and fulfill online orders. These facilities send shipments to stores more frequently and in smaller lots tailored more precisely to demand rather than shipping big cases of products.
We’ll continue to invest in our stores, our supply chain, and our team members, which all fuel Target’s growth, to build the supply chain of the future.
You’ve built four new sortation centers. How do they fit into your network?
Our sortation centers are just one part of our extensive global supply chain and logistics network that is fully mobilized to support our guests, no matter how they choose to shop.
With Target’s stores fulfilling the majority of guests’ online orders, sortation centers make this process even faster, retrieving packages frequently from stores and sorting, batching, and routing them for delivery to local neighborhoods.
By removing the sorting process from our backrooms, we save valuable time and space for our store teams to fulfill additional orders, and because our sortation center technology presorts and arranges packages for easy pickup, it reduces processing time for our delivery partners too.
Labor can be tough to find these days. What do you do to attract and retain workers?
We care about and invest in team members and consistently hear from them that they’re attracted to Target because of our industry-leading pay and benefits, caring culture, and opportunities for ongoing career development. We’ve invested in pay and benefits that include a $15 starting wage, education assistance, bonuses, access to counseling services and doctors, and more-stable schedules.
Due to our longstanding investments in our team members and listening to their needs, we have been able to retain our team and confidently staff our supply chain facilities and stores during an unprecedented labor market. In fact, we’ve exceeded our goal to hire 30,000 new supply chain team members and 100,000 seasonal team members at our stores across the country. These investments have helped us evolve and pivot successfully over time, leading to higher guest satisfaction and greater efficiency, all of which help to fuel our continued business success, safety culture, and ability to flex to meet guest demand.
What roles will automation and robotics play in the future of Target’s supply chain operations?
At Target, we’re focused on building capabilities that give our guests options for how they engage with us—whether it’s shopping in-store, online, or through drive-up order pickup. We’re committed to providing the easiest and safest shopping experience in the years to come.
To do so, we’ll continue to invest in many developments across our stores and supply chain that fuel Target’s growth. We’ve laid out more automation, robotics, and artificial intelligence throughout our supply chain to build a fast, efficient, and precise supply chain. Target is always exploring automated solutions upstream to support the work of our team. We invest in automation that helps sort and move millions of items quickly and precisely, so our teams deliver them to our stores and our guests where, when, and how they want.
We’ll continue building the supply chain of the future, while keeping our stores and our team members at the center of how we deliver a joyful shopping experience to our Target guests.
Editor’s Note: This interview originally appeared in the February 2022 issue of our sister publication, DC Velocity.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”