Target Hires Amazon Executive to Overhaul Its Supply Chain & Logistics Operations

Target has hired Arthur Valdez as its executive vice president and chief supply chain and logistics officer.

Valdez, who starts March 28 at Target’s headquarters in Minneapolis, had been with Amazon since September 1999, starting as director of operations and rising to his most recent position as vice president of operations.

In announcing the hire, Valdez’s new boss, Target chief operating officer John Mulligan, indicated that the e-commerce veteran’s goal will be to strengthen the marriage between the retailer’s digital and physical operations.

“Arthur’s leadership and experience will be a tremendous asset as we continue to drive improvements in end-to-end processes, including leveraging our almost 1,800 stores to deliver a seamless experience for our guests,” he said.

Valdez’s hiring comes a week after Target reported a 31% year-over-year spike in online sales in fiscal 2015, with e-commerce accounting for 3.4% of overall sales, up from 2.6% in 2014.

He will replace Keri Jones, who has been with Target for more than two decades. Jones will stay on for a time to help in the transition, a Target spokeswoman said.

Valdez is the second major hire at Target in the last six months who will be focused on getting items better stocked on store shelves.

In September, Target hired Anu Gupta to fill the new position of senior vice president of operational excellence to also help in that endeavor.

Both report to John Mulligan, who chief executive Brian Cornell promoted to chief operating officer last summer and was charged with the task of helping Target improve on the fundamentals.

Cornell last summer declared the frequency that stores didn’t have items had become “unacceptable.”

Part of the problem, he said at the time, was Target’s system of dealing with suppliers and goods was built around stores and wasn’t equipped for the additional pressure of online orders.

On Target’s Q4 2015 earnings call, Mulligan cited the increasing use of the retailer’s retail locations to fulfill online orders during the holiday shopping season.

Target shares where up 8% for the year so far while the S&P 500 was down 4.7% for the same period.

“We have been building our flexible fulfillment capabilities for several years, and this holiday season highlighted the power of these capabilities to serve our guests and drive business performance,” he told analysts on the call, according to a transcript from Seeking Alpha.

“Even though the traditional view of Cyber Monday doesn’t even include brick-and-mortar, Target stores set an all-time record for order pickup on that day with more than four times the volume compared with last year.”

Photo: Sarah Bessey

Related: Target Facing Mounting Pressure to Gain Control of Its Supply Chain