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Location Accuracy at Target

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Anyone who works at Target will tell you that a very large part of Target’s logistical system is making sure that things are stored in the backroom correctly and in an orderly fashion. At Target a very important evaluation tool is something called location accuracy. In order to understand the concept of location accuracy you need to understand how the LRT works. The LRT is a device used at Target and at other retail stores to track inventory. At Target the LRT is used for several purposes but most important is its role in stocking the store. When a Target employee who works in the backroom needs to pull an item from the shelf he or she scans the location and then scans the item. The LRT will then display how many products need to be removed from the backroom shelf. After that the employee will then indicate whether or not there are any more on the shelf or not. Location accuracy is simply a measure of how often the employee is right when indicating whether or not there are any products left. Any number that is below ninety-four percent is completely unacceptable. An accuracy of over ninety-seven percent or higher is usually expected.

By placing so much emphasis on location accuracy Target is ensuring that its process of ordering is not compromised by misreported inventory. For instance when a Target employee makes an error, there are dire consequences. If the employee enters on the LRT that there are no products left when there really are then the system will automatically enter in an order for an entire batch. This means that there will be dozens or even hundreds of surplus items in the store. Not only will these items be a waste of money to purchase, but they will also take up more space in the backroom. This causes difficulty when trying to store other items and also makes it more difficult for the employees to move around as the stockroom will be cluttered. On the other hand if the employee instead says there are items left when there are none, a different but equally troublesome problem comes up. When the ordering is done at the beginning of the week the item will not be replenished. That means that for the entire week that item will not be sold. Not only will the store lose out on a large amount of sales but it will also have to deal with the unprofessional look of empty shelves.

There are several reasons why errors are made with location accuracy. Not all of them are the fault of the person who indicated incorrectly whether there were products left on the shelves. The first is that the products placed there are not in a place where they can be seen. This usually means that the person who put them there previously put the product behind something else and then when another worker came to remove it, he did not notice it was there. Target places such a large importance on location accuracy because if the inventory reports are not accurate then the logistical system that they use will not be effective. Having high location accuracy is critical for having the correct number of products in stock at all times.