The responsibility for protecting and promoting your product or company brand is often thought to be generally held by the Marketing Department. But in reality the Supply Chain organization has an enormous role to play as the Supply Chain can positively or negatively impact your brand in many significant and different ways. This was the case with Target.
One of the most pronounced examples of the role of the Supply Chain in serving and protecting your brand is found in the story of Target Canada. Faced with unprecedented plans for expansion in Canada Target had to close its entire operation only two years after beginning operations.
The performance of the Supply Chain was a central element leading to this massive failure and damage to the Target brand.
“The Last Days of Target”
In an article entitled “The Last Days of Target: The Untold Tale of Target Canada’s difficult birth, tough life and brutal death”, in Canadian Business magazine, the story of what happened to this well-known Brand is chronicled. The plans for expansion in to Canada were enormous and the timetable for rapidly entering the market was unprecedented.
I was in Retail at the time and the buzz in the Retail community was that the Target schedule for expansion was wildly ambitious at best and fatally flawed at worst. Everyone was watching to see what would happen.
As the company began opening stores it was common to go in to a store and see rows and rows of empty shelves. This was not a rare occurrence nor was it quickly resolved. This visual manifestation of issues in their Supply Chain was evident in every store, every where, week after week after week. “Customers soured on the brand when confronted with empty shelves”. Something was clearly wrong in their Supply Chain!
In the article “The Last Days of Target” it is stated that “At one point Target Canada had printed a weekly flyer in which nearly every single item featured on the front cover was out of stock”. WOW!
From first hand experience I knew that the Merchants and the Supply Chain team had as a Top Priority to make sure, proactively and in advance, that for any upcoming promotion that there was product available in stores and online. There were NO exceptions!
Looking from the outside in it was very apparent that something was seriously wrong with the Target Canada Supply Chain.
The article continues to discuss the various internal issues that Target Canada was dealing with.
Amongst them was their entire Product Data Management system, business process, organization, and change management work stream. There was no accuracy nor integrity in dozens of fields of data for thousands and thousands of skus. The result impacted every other downstream business process from placing purchase orders with suppliers to having accurate inventory visibility to sending fulfillment signals to their Distribution Centres to forecasting and replenishing store inventory levels.
They were implementing and integrating new systems across their entire enterprise. Having dealt with many system cutovers to new systems, including a Retail WMS installation, I knew that just doing one system install at a time was a huge task let alone installing multiple new systems at the same time.
It doesn’t take many minutes, hours or days of having a Retail system down for Customers, Executive and Peers to get anxious at the very least about what is going on in I/T and in the Supply Chain. Store shelves can start to empty out extremely quickly. And Online Customers will go to a competitor in a heartbeat.
Their Distribution Centres became completely bottlenecked as a result. With all of the data integrity, system, ordering, fulfillment and replenishment issues there was no way for the Distribution Centres to be able to quickly and efficiently receive goods, store them and subsequently fulfill and replenish orders to the stores.
On top of that inaccuracies in the scheduling and ordering process caused shipping dates from suppliers to be inaccurate and misaligned with the company merchandising calendar. As a result the Distribution Centres were forced to add offsite storage. This alone would have created a loss of control and visibility that would have been almost impossible to manage.
Within two years of starting operations Target Canada was forced to close their doors. The expansion had been a failure. And while there are many dimensions and dynamics contributing to the demise of the brand, the Supply Chain was a crucial element in their failure.
The Supply Chain Role in Brand Management
There are many aspects of the Supply Chain responsibility which can impact the Brand of a company. This can be said of many functions in an organization. But it is quite often that the Supply Chain is truly the engine that drives how a company operates. And if there are any problems with that engine they will almost immediately start affecting the efficient operation of the company which can lead to negative impacts to the company brand.
Be cognizant of that fact as Supply Chain leaders. What you do impacts your company’s brand. This includes daily interactions with your employees, your suppliers and your customers.
The Supply Chain can make or break your company’s brand and your own personal brand!