Anyone who works at Target will tell you that a big part of Target’s logistics system is making sure things are stored in the back room properly and in an orderly fashion. At Target, a very important evaluation tool is something called location accuracy. To understand the concept of location accuracy, you need to understand how LRT works. The LRT is a device used at Target and other retail stores to track inventory. At Target, the LRT is used for a number of purposes, but the most important is its role in stocking the store. When a Target employee working in the back room needs to get an item off the shelf, he scans the location and then scans the item. The LRT will then display how many products need to be removed from the back shelf. After that, the clerk will indicate whether or not there is more on the shelf or not. Location accuracy is simply a measure of how often the employee is correct in indicating whether or not there are products left. Any number below ninety-four percent is completely unacceptable. Accuracy of more than ninety-seven percent or better is generally expected.
By placing such an emphasis on location accuracy, Target ensures that your ordering process isn’t compromised by misinformed inventory. For example, when a Target employee makes a mistake, the consequences are dire. If the clerk enters into the LRT that there is no product left when there actually is, the system will automatically enter an order for a full lot. This means that there will be dozens or even hundreds of leftover items in the store. Not only will it be a waste of money to buy these items, but they will also take up more space in the back room. This causes difficulties when trying to stock other items, and also makes it more difficult for employees to move around, since the warehouse will be crowded. On the other hand, if the clerk says there are items left when there are none, a different but equally troublesome issue arises. When the order is placed at the beginning of the week, the item will not be restocked. That means that for the whole week that item will not be sold. Not only will the store lose a lot of sales, but it will also have to deal with the unprofessional look of empty shelves.
There are a number of reasons why location accuracy errors are made. Not all of them are the fault of the person who incorrectly indicated whether there were any 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 earlier put the product behind something else and then when another worker came to remove it, he didn’t realize he was there. Target places great importance on location accuracy because if inventory reports are not accurate, the logistics system they use will not be effective. Having high location accuracy is critical to having the right amount of products in stock at all times.
