You are right. Here is a thought. No one knows how much Amazon internally spends to do what they do because Amazon is notoriously quiet about it.
The new DC model should have went first followed by this. It wasn't and its too late now.
I thought this over and how I was involved in such changes in the past. It is backwards given how we process incoming freight. The logical and easiest way is upon delivery, not the end process. Also, the amount of change and inconsistency with the changes across the board makes absolutely no sense at all given the company wide effect on the bottom line. This was a huge misdiagnosis of a problem.
It's only when you realize that they are trying to reinvent the wheel that you start to understand the epic failure that is at hand. Given the changes, it may be too costly to return to a point of starting over again given our size.
Instead of trying to figure out what the actual problems are, Spot went out an poached a "guru" from the leading competitor with the anticipation that they could recreate the same success here. That ain't going to happen. Amazon and Target operations are not remotely close to being the same.
Considering the "guru" is currently in a lawsuit with his former employer Amazon over a non compete clause, he has only so long to perform before Spot is done with him. So the attack was commenced upon the most difficult aspect of the business first. A little success and he can parley that into something else. It is literally axxholes and elbows in trying to implement this process.
If you thing otherwise, think about it this way. Target by it size and layout, has the ability to model and beta test the entire system within a portion of its organization. Upon successful testing, Target could implement it company wide through a series of incremental changes. Literally a seamless change throughout the organization. I estimate it could be done well within eighteen months given the current technology at hand. This include Target.com shipments from DC's instead of at the store level.
But no, we are fast tracking this change.
E2E is simply another way of imitating an online fulfillment system to an individual recipient (the reasoning for the eaches (!?!)). In this case, a team member is the individual recipient in their own area. The difference here is that the team member is not the end user. The fly in the ointment.
As volume increases along with foot traffic, carrying out E2E will become all but impossible given the scope of the requirements. This along with turnover, absenteeism, and other HR issues will only result in a volatile end recipient situation.
Quick look at SFS and the increased touches (this is also part of the rationale for E2E):
Fulfilling target.com sales at the store level only serves as a short term solution to a much larger problem, inability to fulfill on line orders in a timely manner.
Fulfillment from the store; manufacturer/wholesaler to Target DC Receiving (1) to Target DC Inventory (2) to Target DC Pick/Pack (3) to Target DC Shipping (4) to Target Transportation (5) to Target Store Receiving (6) to Target Flow (7) to Target BR (8) Target SFS Pick (9) to Target SFS Ship (10) to Freight Carrier
(11). (
Flow was broken into two parts due to unload and push are two separate functions when it comes to touching freight)
Instead fulfilling from a DC; manufacturer/wholesaler to Target DC Receiving (1) to Target DC Inventory (2) to Target DC Pick (3) to Target DC Shipping (4) to Freight Carrier
(5).
Who covers the cost of the extra touches (11 to 5)? The guest? I don't think so. Too price conscious to accept premium pricing when the item is available elsewhere. The stores will pick up the additional burden as time goes on. As of now, I suspect it is shared or charged against Target.com.
This setup will requires a headcount that Target will not likely accept either. Look for a lot of downward pressure on Team Member performance in the near future. If you think its getting tight now, you haven't seen anything yet. Of course this will be done without additional compensation. Another reason turnover will be ridiculously bad.
