Logistics/Supply ChainsNews

Target names McCarthy supply chain head; Valdez to retire

McCarthy had headed global inventory management; Valdez to stay on until April as consultant

Retailing giant Target Corp. said on Wednesday it named Gretchen McCarthy as its new chief supply chain and logistics officer, effective immediately.

McCarthy succeeds Arthur Valdez, who has retired from full-time duties but will stay on until April as a consultant. Valdez joined Target (NYSE: TGT) in early 2016 from Amazon.com Inc., (NASDAQ: AMZN) where he held high-level supply chain and logistics positions.

McCarthy, 42, who was also appointed executive vice president, assumes one of the highest-profile positions in the retailing supply chain field. She oversees the company’s global inventory management, replenishment, fulfillment, transportation, logistics and distribution activities. She also becomes the supply chain and logistics face of one of the world’s most prominent retailers and a major player in the logistics world.

McCarthy, who joined Target in 2004, was most recently senior vice president of global inventory management. In that role, it has been an eventful year. Like other retailers, Target responded to pandemic-fueled consumer buying habits and concerns about potential inventory stockouts by ordering hard goods on a massive scale. However, as the economy slowed, consumers began spending more of their disposable dollars on lower-margin necessities like food and apparel. This left Target with large volumes of costly unsold inventory.

In early June, faced with shrinking margins due to excess inventories, Target took the extraordinary step of quickly and dramatically cutting hard goods prices and canceling incoming orders. Other retailers took similar actions, but few did so with Target’s speed and intensity.

Under Valdez’s leadership, Target emerged as a supply chain powerhouse. While the company had mulled an ambitious strategy to build a network of so-called microfulfillment centers adjacent to its stores, it was Valdez who aggressively implemented the program. The result was that Target was able to fulfill and ship online orders from store inventory at a faster pace than its competitors.

Target today fulfills about 96% of online and in-store orders from its network of 1,900 stores, a percentage that might have been impossible to attain without the launch of the microfulfillment centers.

In 2017, Target acquired grocery delivery service Shipt for $550 million, a move that accelerated its digital fulfillment efforts. Within two years of the acquisition, Target began leveraging Shift’s network to offer same-day deliveries from the retailer’s website.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.