Target
Target Tell Suppliers to Speed it Up

Target Tells Suppliers to Speed it Up

May 6, 2016
Target will tighten deadlines for deliveries to its warehouses, hike fines for late deliveries, and could institute penalties of up to $10,000 for inaccuracies in product information. 

In order to compete more favorably with Wal-Mart and Amazon, Target Corp. is getting tough with its suppliers, according to a May 4 report from Reuters.

The retailer is making a number of changes. It will tighten deadlines for deliveries to its warehouses, hike fines for late deliveries, and could institute penalties of up to $10,000 for inaccuracies in product information, according to a letter sent to suppliers and obtained by Reuters and an interview with Target's chief operating officer John Mulligan.

These new rules are part of the company’s $5 billion overhaul of its supply chain and technology infrastructure that began in 2015 and will end in 2017.  

The goal of these particular rules are to ensure that products are in stock ensuring that both the company and its suppliers don’t miss out on sales.

Domestic suppliers, the majority of the company's suppliers, will be required  to give a single-day arrival date for shipments to Target's warehouses. These suppliers will no longer have a "grace period" to ship a few days after the promised date without penalties.

Also new are higher fines for late shipments. The new fine on late shipments will be 5% of the order cost, up from  the current range of 1%-3% depending on the product.

Read more on Target’s changes in its supply chain.

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