Target Solves Out-of-Stock Issues By Simplifying Its Operations

By Jose de la Cruz | Mar 04, 2016 09:26 AM EST

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Target Corp., the third largest store chain in the United States, thinks that it has already solved the perennial out-of-stock-issues of retailers - by simplifying its operations.

If this store chain is successful in this strategy, customers will no longer be disappointed coming into a Target store that lacks the items they need, and thus conquer a larger share of the consumer market.

The solution, according to company strategists, is to reduce the variety of brands, sizes and flavors on its store shelves, and thus minimize the complexities of their store operations.

The retail giant is instructing its hundreds of store employees to scour through the hundreds of products sold in the store and assess how many differing pack sizes and formats of consumer items such as soaps or bottled water they really need to put on the shelves.

Store shelves are also being expanded so that they can hold more products. The store is also working with its suppliers to deliver goods in packages that are equal to the capacity of the shelves. Target Corp. hopes that these moves will help reduce the goods stored in its warehouses.

"It's going to be very surgical, category by category," said Brian Cornell, Target Corp. Chief Executive, on Wednesday at an investor event. "We are not taking a blunt instrument approach to this," he added.

Simplifying store operations is also being planned by Wal-Mart Stores Inc., the world's largest company in terms of revenues. It is also implementing extensive culling of goods to make its selection uncomplicated.

Big manufacturers of consumer goods including Procter & Gamble Co. are also undertaking a simplified approach to their production by narrowing their focus and booting out unprofitable categories of products. For instance, P & G has taken out one sixth of its Olay skin-care products, ranging from acne washes to facial scrubs in its production line.

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