A632.3.3.RB_ Complex Managerial Decision Making

          Complex Managerial Decision Making

          Managerial decision making can be complex, and the cascade of consequences has many effects. Reflecting on my past experience at Target, Corp., and thinking about a few processes we had in place for handling complex, multiple stakeholders, and environmental decision processes, I  consider changes that would’ve ensured the most successful process possible.

          Perhaps one of the most commonly used approaches in Target’s toolkit was used when planning for seasonal items and promotions, and it involves leadership from the stores and the distribution centers. This often happens, as you can imagine, for a retailer that has over 1,800 stores in the United States and involves many functions throughout the organization to function. When the distribution center gets its direction from Target headquarters on what inventory is involved and when it needs to ship to stores, the distribution center schedules a collaborative planning meeting with store leadership to cover the plan and assign action items that are critical to the project’s success. The key stakeholders, in this case, are store leaders, and the warehousing and outbound departments in the distribution center who are responsible for pulling and shipping the product using a just-in-time strategy. The timing and execution are critical as most Target stores have minimal space in their backrooms, so the product has to arrive in a very small delivery window in the fewest number of trailers possible. The product then has to be rushed to the store shelves in a few hours. The coordination between the distribution center, stores, and headquarters team must be accurate, well thought out, and done in a manner that minimizes risk to the store, and ultimately, the customer.  This is an excellent example of frames used in managerial decision making having many considerations. The feedback I have for this process is involving the store in the initial conversations with the headquarter teams, as this may prevent important details from being lost or miscommunicated from the distribution center. Although we were unaware of the cognitive frames at the root of our perceptions and decisions, had we thought about our frames and taken the time to understand the view from headquarters as well as the distribution centers perspective, I would’ve done a better job communicating with the distribution center to make up for the gaps in communication from headquarters.

          Another tool that Target uses for high stakes decision-making is its internal transportation management system (TMS) that helps plan effective and efficient routing of trailers to stores and supplier product to the distribution centers. This tool is especially critical to the organization because Target’s transportation expenses normally rank 2^nd highest in the organization behind payroll. This tool captures data for suppliers, store leadership, distribution centers, and the contracted carriers and relies on inputs from logistics managers for its success. The TMS ensures all routes are being covered, all trailers are being maximized, and that stores and suppliers are taking advantage of empty trailers coming back from the stores to send product to the distribution center. Trends, future plans, and upcoming changes are all communicated and shared using this tool. The TMS could be optimized even more by being fed information more real-time in an automated fashion, rather than relying on manual inputs from employees. This would save time, improve quality, and allow logistics mangers to focus on other decisions that need to be made outside of the TMS.

          In-stocks within each Target store was a popular topic starting in 2014 and still is, to a great extent, as these drive store traffic and are a strong indicator for supply chain performance. One approach that Target took to help solve for in-stock deficiencies was doing more manual scans of store shelves and inventory levels, and also involving the distribution center in the performance of the store in this category. This approach forced the store and the distribution center to make key decisions involving inventory levels, trailer deliveries, and prioritization of product in a more collaborative manner and also forced them to use more real-time data to make decisions. Weekly meetings were developed, data sharing become common, and store visits from distribution center leadership became routine as these two separate functions were being rated on the same performance factors. One change that could have improved this approach was allocating more resources to each function to exercise more freedom in piloting ideas. The stores and distribution centers were operating on budgets that left these projects and new approaches out of them. Essentially, we didn’t have the budget for it.  Because cost was a factor, and this is the frame through which we viewed our decision-making process, it didn’t allow for the freedom we needed to exercise our ideas. Our fame constrained our decisions. The thought processes and decision-making process would have improved and been more streamlined if we were not constrained to such a tight budget.