2017 Target Corporation Team Project

REDUCING AIR SHIPPED FROM THE SHIP-FROM-STORE NETWORK

The Challenge:
With 50% of all Americans living within five miles of a Target store, Target launched the Ship-from-Store (SFS) capability to fulfill guest (customer) orders quicker and cheaper. Direct-to-guest fulfillment is expected to grow more than 30% this year and is a critical component of Target’s omnichannel distribution strategy. But unlike Fulfillment Centers' box suites, the SFS suite was not optimized for the orders shipped, resulting in the delivery of excess void space (air) to guests. The Tauber team was engaged to conduct a gap analysis between the current and future state of void space shipped to guests via the SFS network, with the objective of reducing shipping and material expenses.

The Solution:
The Tauber team developed a box suite optimization tool —which minimizes void space shipped— allowing for the creation of an optimal suite. The tool was piloted, revealing an optimal box suite that reduced void space shipped by 13% and closed the gap between current state and the benchmarked future goal. Deploying the tool developed by the team within the SFS network will avoid more than $10M per year in shipping and material costs.

Read the 2017 Target Corporation Team Project Executive Summary in the 2017 SPOTLIGHT! book.

Student Team:
Juan Fernando Arango–Master of Supply Chain Management
Kyle Kenkel–MSE Mechanical Engineering & Master of Management
Kyra Mahoney–Master of Business Administration

Project Sponsors:
Preston Mosier–Senior Vice President Fulfillment Operations
Stephanie Brown Washington–Senior Supply Chain Program Manager

Faculty Advisors:
Jason Habeger–College of Engineering
Joline Uichanco–Ross School of Business

About Tauber Team Projects:

The 2017 Tauber Team Projects resulted in $575 million in savings according to sponsoring company calculations, an average of $18.5 million per project over 3 years.