The Target Canada story
As a Commport professional, I have always maintained that EDI is not really an IT function, rather it is a business function. Doing B2B EDI and/or Global Data Synch effectively, means leveraging technology and international standards to efficiently reflect an organization’s business processes and intellectual property related to organizational data.
Throughout my life I have been exposed to many business and economic trends and opportunities as well as the ensuing successes and failures. I have to admit that almost nothing makes me more excited than ramping up for that next big, business opportunity… That is unless it fails… and then the failure becomes even more interesting. When flawed processes meet business failures, I am captivated.
As a consumer, I lamented the shuttering of my local Zellers store. I waited and watched for months as the excitement of Target coming to Canada built and as I desperately tried to sneak peeks through the paper covered doors as they renovated. I had shopped at Target stores in the U.S. so, like many Canadians, I eagerly awaited the hyped up new Canadian retail option.
And then I went to work.
In my professional life the Target Canada experience was something else. At the beginning Target Canada so thoroughly committed to the use of EDI with its vendors that it would only source product from vendors that already had EDI capabilities and experience. Vendors were led through a process to prove their capabilities and incurred configuration costs to do so. They weighed the fees against the promised opportunity of the anticipated success of Target Canada and took the plunge. In the end, a number of the vendors I worked with entered into this process and incurred the costs, only to receive confirmation part way through that they wouldn’t be selected as a supplier to Target.
Those that were selected were identified and began receiving orders. After all the systems set up and testing were performed and even after the first set of orders, suppliers to Target Canada were subjected to seemingly constant uncommunicated system changes that would only be discovered after transactions were exchanged. By then it was too late to update the system at Target Canada, so the supplier was locked into working in “as-is” conditions with the data on hand.
Without getting too deep into the technical details, a retailer’s business system is the life blood of the organization. It supports the business processes and supports the operations. If the data contained within the systems is wrong, for any reason, the results can be disastrous, especially when the users have been trained to rely on the system. Based on my experience, this explains a lot of what went wrong at Target Canada.
In May 2014 Reuters published the article Exclusive: Target Canada’s supply chain gridlock: how Barbie SUVs snarled traffic in which the authors talk about mismatches between expected quantities and actual received quantities and about problems with barcodes not matching what was in the computer system. They mention a source who reports “As goods arrived at the warehouses, workers found errors, 12 shirts per box when the computer system expected 24”.
In those early Target Canada days I remember working with suppliers who received orders where the quantities being requested by Target didn’t match the physical reality of the product configurations. The vendors I worked with would contact Target and warn of the issues only to be told that what was in the system is what they intended to order, so the vendor must be incorrect. Or worse, when push came to shove after repeated attempts to submit EDI shipping notifications, some suppliers were told to fudge their data so that it matched what was in the Target systems and then ship the product and that it would be dealt with at the warehouse. Invalid quantities combined with unresolvable barcodes are a recipe for a disaster in any warehouse that is intended to utilize mostly automated receiving, with far reaching implications for the rest of the supply chain. The bottom line is that inventory that doesn’t move through the warehouse efficiently, isn’t available to the store to be stocked, causing customers to be met with empty shelves and ultimately a disappointing shopping experience.
To me, these two contributing factors speak loudly to a significant mismanagement of the product catalogue data within the Target Canada systems. There are a number of root causes and potential approaches to fix these issues and I expect that the root causes will continue to be examined for years to come.
As for fixing the problems, well it seems, that just won’t be necessary.
