Target has introduced an innovative tool named Proxima to enhance its supply chain operations through better inventory management. Proxima functions as a digital twin of the company’s middle-mile inventory system, allowing the retailer to simulate and evaluate the outcomes of potential decisions before implementation.
Enhancing Decision-Making with Simulation
Proxima operates by utilising the same data and logic as Target’s current inventory platform, replicating scenarios to identify potential issues in advance. According to Target, this emulation helps their teams to either resolve identified problems or explore alternative strategies, thereby enabling more confident decision-making when successful simulations are identified.
Mitigating Supply Chain Disruptions
The benefits of Proxima extend beyond decision-making, offering significant improvements in product availability while mitigating potential supply chain disruptions. A key application of Proxima has been in planning for Target’s fresh food inventory, where managing expiration dates and lead times is crucial. In a trial involving 63 fresh food items, Proxima enabled the team to adjust inventory flows preemptively, resulting in a 2.5% improvement in on-shelf availability.
Supporting New Infrastructure
Proxima also played a critical role in the launch of the Houston Receive Center, a state-of-the-art facility offering 1.2 million square feet of inventory space, the first of its kind for Target. Prior to its opening, Proxima was employed to predict inventory movements with a 98% accuracy rate, which helped minimise inventory flow issues following the centre’s launch.
Future Expansion and AI Integration
Target has a strategic focus on advancing its inventory management capabilities, incorporating demand forecasting, artificial intelligence, and machine learning technologies. Looking forward, Target plans to apply Proxima throughout additional network functions. The company anticipates that insights from Proxima could eventually enhance their AI-powered decision-support systems, allowing for improved evaluation, prioritisation, and automation in operations.
Reporting based on coverage first published by retaildive.com.