Actually it was Cornell and his people that went looking.
Mr. Valdez appears to be trying to turn Target's Logistics operation into a pick pack operation to support the stores and the .com orders quietly by disguising it as something else. Along with this, he's also trying to utilize/create excess capacity in the stores too - SFS. Wait until 4th Qtr. and we can't turn freight around fast enough to fill the shelves. Remember the size all of those holiday pulls? How are we going to compensate? Around the clock E2E?
You know the "eaches" shipped to the stores instead of case pack quantities. IMO he is trying to reset the DC's to be able to ship Target.com orders across the board while fulfilling the stores demand. I think this is due to how far we are behind everyone when it comes to capability/capacity to ship online orders. About as quick a short term fix as you can do considering where we stand.
From what I have read and researched, this is not the answer either due to it being two different types of operations.
Walmart just opened up two 2.5 million sq feet fulfillment centers. These are not store support, only online support. By the way, they open theirs up in pairs. We opened up one and expanded another recently. This increased our capacity to somewhere around 3 million plus from what I have learned so far. This link (white papers - its a service and avoids negative comments) has a lot of good info:
Target Distribution Center Network | MWPVL
Everything is set around case pack quantities. It is the manufacturer/suppliers way to maximize their profitability. Mess with it and your cost go up accordingly. Volume does not matter, it's all about efficiencies. Any purchasing agent/buyer worth their wt. in salt will tell you that. That's why you'll often see cases designed to be opened up for shelf staging in volume settings, efficient. If this is not possible, shelf space/peg qty should always be a multiple of the case pack when possible.
Nothing should be opened until it is as close to the end user as possible. Anything else is just an added cost.
We haven't seen anything yet. Wait until the unit cost skyrocket due to daily multi store shipments. LTL (less than truck load) has been and always will be higher than TL (truck load) shipments when it comes to unit cost per piece.
Let's look at a scenario of 3 LV stores taking three trucks a week. That comes to 12 trucks a month/store or 36/month total. Change that to a LTL truck every other day to the 3 LV stores and you now have gone from 36 to about 15 trucks a month at a minimum.
The reality would be most likely around seven (7) shipments per week based on seven (7) 643 pcs/shipment vs. three (3) 1500 pcs/truck shipment per store. We're looking at around 28trucks a month E2E versus 36 the current process requires.
If you split a truck with two stores, it comes out to 6 trucks a week or about 24 a month (750 pcs/store per truck for a total of 4500 pcs/week). Not a bad plan or is it?
Just think of the additional hours required to pick/load and drive the LTL trucks to the stores seven days a week. Then we have the additional hours required to unload, push, zone, research/instocks, pog, and price (E2E) seven days a week. Remember, your going from a three day operation to a seven day operation across the logistics chain. This is why you ship TL vs LTL, it helps to maximize operations and reduce cost.
I think the rationale for E2E working at the store level was based on the current truck schedules not the new ones needed to meet the current demand.
The reality is that your going to have to staff the E2E process seven (7) days a week for a low volume store. Payroll anyone? What happens when we go into higher volume demand? Increase the number of LTL trucks or one or more TL trucks/store daily and start earlier? What about the reduction of the backroom merchandise? There is where the problem lies. Being able to turn around enough merchandise to meet demand. It's just not about getting it to the store, but keeping the floor stocked.
It will only be worse for higher volume stores. E2E will be a nightmare when you have multiple 53' palletized repack trucks daily.
As far as life at Amazon, I worked in a culture far more demanding than Amazon's. It was a game in our world to see who answered when. Failure to meet the customer's demand was measured in the 10K of dollars per minute. The difference is that we had and in this case Amazon has the infrastructure and support to be successful. It's the nature of the beast.
