Assignment II

Reverse Supply Chain Target

Submitted to,
Ms. Gulnaz Banu
Dept. of FMS


Submitted by,
Anjali P.S
Sharanya Rao
Watisenla Noella Pongen
MFM III



National Institute of Fashion Technology, Bangalore
19/11/2013
TARGET CORPORATION

The Target Corporation, originally the Dayton Dry Goods Company and later the Dayton
Hudson Corporation, is an American retailing company, founded in 1902 and headquartered
in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States,
Walmart being the largest. The company is ranked 36th on the Fortune 500 as of 2013 and is
a component of the Standard & Poor's 500 index. Its bullseye trademark is licensed to
Wesfarmers, owners of the separate Target Australia chain which is unrelated to Target
Corporation.
The first Target store was opened in 1962 in Roseville, Minnesota. Target grew and
eventually became the largest division of Dayton Hudson Corporation, culminating in the
company being renamed as Target Corporation in August 2000. In 2013, Target expanded
into Canada and now operates nearly 100 locations through its Canadian subsidiary.
Target brands owns and oversees the company's private label products, including the grocery
brands Archer Farms and Market Pantry, Sutton & Dodge, their premium meat line, and the
electronics brand Trutech. Target issued a re-launch of the Target brand as up & up to
includes an expanded product selection and a new design. The up & up brand offers essential
commodities including household, health care, beauty, baby, and personal care products. The
brand claims to offer products of equal quality to national brands at a fraction of the cost,
averaging a savings of 30 percent. As of September 2009, up & up carries over 800 product
offerings across 40 categories. In addition, Bullseye Dog is a mascot, and the Bullseye
Design and 'Target' are registered trademarks of Target Brands.



REVIEW OF LITERATURE
Reverse Logistics in Supply Chain Management
The article talks about the development technology which has given rise to an increasing
importance for reverse logistics in manufacturing products. Technology has allowed for new
products to enter the supply chain at a much faster rate than earlier before. Companies that
are flexible will outmaneuver and eliminate the competition. It requires collaboration and
integration within Supply Chain Logistics, the ability to capture, migrate, integrate and
facilitate the intelligent analysis of data will separate the companies who can walk upright
from the ones that will be stuck in the tar pits of slow response. The companies that did not
support consumer returns are at a strategic disadvantage. Reverse logistics looks into
decreasing the cost of transportation, by planning and consolidating freight for return
products identified as a way to reduce expenses related to fuel and labor. The importance of
returning refurbished merchandise to market also became more significant. Consolidation
meant more than merely consolidating returns; it meant consolidation of activities related to
back-end support operations. This activity required collaboration between previously diverse
management and operational groups within large organizations. The collaborative effort
reduced expenses for all participating departments and groups within the organizations.
Integration of data through the collaborative effort of all channel players became important as
well. The companies that collaborate, integrate and optimize date exchange will enjoy the
competitive advantages of improved profit margins and precision management. The
organizations that do not participate will be remembered as fabulous fossils.









THE REVERSE SUPPLY CHAIN PROCESS IN TARGET
STORE PROCESS
Following the stores policy on returns, the Customer Service staff will conduct the initial
transaction with the customer. He or she will then fill in a Faulty Merchandise Sticker for
each item that documents the reason for the return. The returned item is then transferred to
the claims area of the store.
All Target Geelong Office initiated returns or shop soiled items are taken off show and from
reserves and taken to the claims area. Here, the Returns staff will reference the information
on the Faulty Merchandise Sticker or Head Office paperwork to determine the return type
for the goods to be returned to the Central Returns Centre.
There are 4 different return types:
Faulty returned from customer due to fault
Sale or Return only with Suppliers agreement prior to arrangement
Soiled and Damaged is not returned to the Supplier damaged in transit/at store
Recall serious legal or safety issues Supplier is notified
The Return staff member will verify the return and ensure that every item to be returned to
the CRC is identified with the correct key code or GTIN (APN). They then sort their
returns by Return Type and place product into cartons containing the same Return Type.
As a final step, they build a pallet for despatch to CRC once per week.
Completed cartons are palletised for shipment and retained in the store until the
scheduled pickup occurs.
REVERSE LOGISTICS AND TRANSPORTATION
Carriers are contracted by TIC (Reverse Logistics) P/L to manage all Target pick-ups on a
weekly basis for Target and on an ad-hoc basis for Target country.
RECEIVING AT THE CENTRAL RETURNS CENTRE (CRC)
Upon arrival, the truck seal will be broken and the receivers information is compared to
the drivers manifest for accuracy. Any breaches are recorded and advised to the
sending stores Regional Manager. Pallets are moved from the receiving area to the
staging area in a first in first out (FIFO) method.
SCANNING & QUALITY ASSURANCE
Scanners take the cartons returned by the stores and scan the affixed RLO label that
identifies the originating store and Return Type. The Items are removed from the carton
and scanned individually using a scan gun.
As each faulty item is scanned, the system generates a System Licence Plate (SLP)
label, which is placed on the item. The SLP contains unique information for each item
that is used to track, sort or reference the item in the database.
At the time the item is scanned, the stores stock on hand accounts is credited and the
merchandise is transferred to CRC stock on hand. Once the stock is returned to the vendor,
their accounts are debited through information transfers from the CRC to Target
SORTING
Scanned items: Faulty, Sale or Return (Recall) & Soiled and damaged are placed on a
conveyor and transported to the sorting area. Team members positioned along the conveyor
read the SLP attached to the merchandise and sort them based on location numbers
contained on the SLP:
Destroy merchandise is placed into a skip at the end of the conveyor
Vendor returns are logged into locations
Salvage merchandise is sorted into jumbo boxes by merchandise category.
Homewares, apparel, electronics, toys etc
Product destined for re-sale as salvage must have all Target labelling removed prior to its re-
introduction to the market. This is the responsibility of the second hand retailer/wholesaler
who has purchased items. These customers are scrutinized prior to being an approved buyer
and sign a legally binding document which states their responsibilities clearly.


PICK AND PACK
The pick and pack process is started by the Returns Team Member who generates a pick list
and issues it to the dispatch department.
Dispatch Team Members will:
Remove the product from the storage locations using the information provided on
the pick list.
Generate the required manifest/invoice documents.
Prior to pickup, the shipment is inspected and prepared with security measure
to prevent tampering during transit.
RETURN AUTHORITY
Once the stock is picked and packed, approval to ship the merchandise is sought. The
system generates a Return Authorisation (RA) Request for each Vendor. This is
transmitted to the vendor via e-mail. The RA is a formal request for the vendor to provide
approval for the return of all items contained in the bill of lading referenced and to also
confirm freight carrier and delivery address.
Vendors can opt to have merchandise destroyed or salvaged if deemed more cost effective
than having stock returned.
DISPATCH
When the RA is received, claims are printed and attached to the stock. A claim is uploaded
to the Target Brand and processed overnight to appear on the Vendors next remittance.
BENEFITS TO THE SUPPLIER
Returns will be consolidated - one return rather than multiple per store
Saves administration, freight and handling costs
No individual store communication about returns
Will provide consistent paperwork from one location

Reduce non-selling time for Sales Reps as they will no longer need to inspect
returns at each store location
Ensure control and compliance of your return agreement
Re-order process will be activated earlier based on a more efficient return process
in Stores
Product information generated from the process will highlight areas for
improvement in merchandise - these areas will be address by both Target &
Suppliers and will ultimately lead to increased customer satisfaction.

INTERVIEW
Interviewee: Ms. Deepa Prabhu
Position: Junior Merchandiser Target Corporation, Bangalore
1. What are the reasons for the products coming back? And which of the reasons amounts to the
most returns?
Ans: the reasons for product returns at target are:
Overstocked
Seasonal
Package changes
Quality problems
Discontinued
2. How much percentage do the returns amount to in the total sales?
Ans: 8% of the total sales

3. Elaborate on the Returns Policy of the company.
Ans:
Refund/exchange policy: Most unopened items in new condition returned within 90 days will
receive a refund or exchange. Some items have a modified return policy that is less than 90 days.
Those items will show a return by date or return within day range under the item on your
receipt or packing slip and in the "Item details, shipping" tab if purchased on Target.com. Items
that are opened or damaged or do not have a packing slip or receipt may be denied a refund or
exchange.
Following the stores policy on returns, the Customer Service staff will conduct the initial
transaction with the customer. He or she will then fill in a Faulty Merchandise Sticker for each
item that documents the reason for the return. The returned item is then transferred to the claims
area of the store.

When a customer arrives at the service desk to return a purchased item, the Target customer
service team member scans the item and keys that information into the system. A small bar-
coded tag called a license plate is produced and then affixed to the returned item - defective
items and marketing returns alike. Return policies and instructions for all SKUs (stock-keeping
units) are on-line with details of disposition instructions for that particular item.
Returned merchandise again is scanned as it is loaded on a pallet, then shrink-wrapped to
minimize damage and improve security. The pallet of returns travels back through one of 14
LTL-like hubs - 10 Target distribution centres and four designated LTL terminals - where
truckload-quantity shipments are collected before being transported to the Central Returns
Centre
As the employees unload each pallet, the license plate on each item is scanned and the item is
sorted in different categories based on product type. From there, each item goes to a "home
location" in a series of racking. Then, according to "cut" criteria established by the respective
buyers, the team members pull those goods to Target's requirements and get them ready for
shipment back to the vendor.
When the product comes into the return centre, each license plate is scanned as the item comes
off the pallet, SKU by SKU. That information basically is matched up systemically against the
files that have been downloaded by the sending stores. Once the item has been scanned at the
CRC, it is sorted out by vendor, and then cut it up into bills of lading, using criteria pre-
determined by the respective buyers.
The license plate concept provides a chain of custody and responsibility as well. The returned
item becomes the individual store's responsibility once it arrives at the service desk. Once the
goods are scanned inbound at the CRC that transfers the responsibility to the CRC operator.
Once the goods are shipped back out from the CRC, the information is transmitted on a daily
basis to the host system at Target headquarters. This has two effects: It relieves the merchant of
their responsibility from a financial standpoint, and it notifies Target's accounts payable system,
which generates a charge-back to the vendor.





4. Who is responsible for the Reverse Supply Chain Logistics?
Ans: Target utilises the services of the TIC group to manage the returns business for the
company. TIC provides Target with the software that enables them to process return goods from
their stores back to the manufacturers, distribution centres and salvage buyers.

5. How do you reintroduce products that have gone into the Reverse Supply Chain?
Ans: Items are inspected and re-worked at the CRC applying direction for the Vendor. Faulty
products are tested when they experience unusually high volumes of returns for their product.
RLO complete a plug and play on a sample of units and provide an executive summary of their
findings to the brand that the buyers can discuss with their suppliers.

6. What are the sales promotional techniques used to reintroduce the product?
Ans: At Target products are reintroduced at deep discount sales.