Dive Brief:
- Target has opened a $265 million supply chain facility in Houston that provides more inventory holding capacity and flexibility within its network, the company announced in a news release Wednesday.
- The new location, called a Receive Center, is the first of its kind for the retailer and will serve six of Target's regional distribution centers in addition to a flow center. The Houston facility, which employs 185 people, receives and holds products from Target's vendors until inventory replenishment is needed for the downstream facilities.
- "Positioned between our Import Warehouses in Georgia and Washington, it complements those coastal facilities by adding regionally based capacity — helping us get products to the right place faster and at a lower cost thanks to shorter distances traveled," Target said in the release.
Dive Insight:
The new facility type enables Target to secure popular items at an earlier time and hold off on distributing inventory until the moment it's needed, preventing distribution centers and store backrooms from getting overcrowded. Items that are seasonal, bulky, tough to forecast or feature long lead times will especially benefit from the facility, according to the retailer.
"Really the intent of that is so that stores can stay in stock, that they can be ready for guests, whether that they're shopping at their local store in Houston, or if they're using online fulfillment methods, or drive-up, next-day delivery, anything like that," Jordan Kirkland, the Houston Receive Center’s senior site director, said in an interview with Supply Chain Dive.
The facility is 1.2 million square feet, which translates into roughly 3 million to 3.5 million cubic feet of product storage, according to Kirkland. When the site's inventory needs to move to distribution centers, Target will either load full pallets directly into outbound trailers or run products through a sortation system before they are brought into trailers.
"It's actually two different independent line sorters, and so if one of them goes down or needs maintenance, we can continue to operate with the other ones," Kirkland said. "There's a lot of redundancy built in as well.”
The Receive Center is one example of Target's push to grow its supply chain footprint. In recent years, the company has opened sortation centers, flow centers and an extension facility for last-mile delivery. Target had 70 supply chain facilities as of January, up from 55 in January 2023.
