Target developed a technology tool that aims to help the retailer make better inventory decisions across its supply chain.
The tool, called Proxima, is a digital twin of Target’s middle-mile inventory positioning system which determines how goods move between facilities to stores, per an Aug. 13 news release. In practice, Proxima uses the same data and logic as its inventory platform to simulate how decisions play out before inventory teams put them into practice.
“If a digital twin emulation through Proxima surfaces a potential problem, teams can correct the issue or take another path,” Target said in the release. “If an approach works, they can move forward with greater confidence.”
Besides improving product availability, Proxima’s feedback will help reduce possible supply chain disruptions and handle complex processes with better certainty.
For instance, Target’s fresh food offerings require strategic inventory planning due to product expiration dates and lead times, per the release. During a small-scale Proxima pilot of 63 food items, a Target team was able to simulate inventory flow changes and correct issues prior to launch. In turn, the efforts helped improve the on-shelf availability of the fresh food products by 2.5%.
Proxima also played a part in the launch of Target’s Houston Receive Center. The 1.2 million-square-foot facility — the first of its kind for Target — provides more inventory holding capacity and flexibility, serving six of the retailer’s regional distribution centers and a flow center.
Prior to the site opening, Proxima was used to simulate how inventory would move in and out of the facility with about 98% accuracy, Target reported. In turn, Target teams were able to lessen inventory flow issues after the receive center opened.
Stronger inventory management has been one of Target’s ongoing priorities. The retailer has been especially focused on exploring enhanced demand forecasting, artificial intelligence and machine learning to improve overall inventory forecasting, positioning and decision making.
Looking ahead, Target aims to scale Proxima across more network functions.
“Over time, the insights Proxima generates could also inform future AI-powered, agentic decision-support capabilities, helping our teams evaluate options, prioritize actions and automate operational responses,” Target said.
