Envision it: a 1.2 million square-foot supply chain facility filled with towering racks of items waiting to ship to distribution centers, receiving lines stretching to the horizon, and automated sortation systems routing boxes to their next destination.
It wasn’t a real facility, yet — but it felt that way thanks to the tech and team behind our XR Experience Center, a space where Target’s design and operations teams create extended reality (XR), 3D representations of facilities that can be navigated with virtual reality (VR) headsets. The center, which opened in 2023, serves as the testing ground for store and supply chain layouts, guiding our efforts in making them a reality.
It creates an environment where you can start to ‘feel’ a space. You begin to understand the scale of what you’re looking at, which comes naturally and intuitively from our senses. If you have vision, you sense how things are.
It also serves as a powerful proof point that accelerating how we use technology benefits our team and ultimately our guests.
Over a series of months, our supply chain design teams created our first virtual end-to-end building design — and it was a big one: Target’s Receive Center, a new type of facility in our supply chain network that intakes directly from our global vendors and holds product until it’s needed downstream. The advantages of this design approach quickly became obvious — faster troubleshooting, hiring, training and cost savings.
We asked members of the working team — Tom G., principal supply chain engineer for Target's design engineering team; Lisa S., director of the upstream team in process design and implementation; and Jordan K., senior site director for the new Receive Center — to share more about the technology and their collaboration.
Tom G.
Principal Supply Chain Engineer, Design Engineering
Lisa S.
Director, Supply Chain Design and Implementation
Jordan K.
Senior Site Director
How does the XR Experience Center help design physical spaces?
Tom: We create immersive 3D environments, allowing team members to feel and understand a space and better identify where there might be anomalies or discrepancies. While we’ve used this technology to design stores and facilities, what we're really working towards is standardizing a ‘no-surprises’ approach to construction. So, when a space is built — for example, the Houston Receive Center — we’re reducing the changes needed and lowering our costs, because we're correcting and identifying them in the virtual environment long before we build it.
These simulated environments also allow us to play out ‘what-if’ scenarios and test how a facility will actually operate. What if we were to change the throughput rates, massage the numbers and tweak the data? How can we improve output and outcome before things go live?
What was the process for creating the virtual Houston Receive Center?
Tom: It took us 2 to 3 months to build all the 3D assets associated with the Receive Center. That’s the four walls, the site, transportation, and then all the individual disciplines associated with the facility — think structural, electrical and mechanical. Then we worked with our visualization partner to host the data in headsets. Once we have the 3D environment set up, we then had immersive design reviews for each function of the building.
Jordan: During the design process, cross-functional teams visited other supply chain facilities to view current processes and the purpose they will serve in our new receive center. I was involved early on, representing the field and helping think through things like workstation design and process improvements.
What are the advantages to this 3D approach?
Lisa: This type of visual representation is a replica of the real-life experience within the building, and it allowed us to quickly figure out what the optimal design will be. After we did the immersive design review, we saw a significant reduction in the number of change requests after the building was open — saving us time, money and energy. We estimated that we saved over half a million dollars in built materials procurement by doing this exercise, which is significant. It also enabled my team to focus more energy on testing new capabilities, creating the standard work bundles and training the site team in the leadup to the site launch.
Jordan: For me, the big help with the virtual environment was being able to physically see the space versus having it described to us so that everyone is visualizing it the same way.
Tom: When design is brought into 3D, people can understand it without having an engineering background. There is an intuitiveness and richness to the experience. The visualization tells the story. The story is becoming richer. The chapters are more fulfilling, because we’re not leaving any cliffhangers.
What’s an example of how the virtual experience influenced decision-making?
Lisa: The Houston Receive Center has a first-of-its-kind sorter for Target — it’s two independent line sorters that take up a smaller amount of space – making it unique compared to other sorters across our network. We wanted to minimize its footprint but maximize its capabilities. We started with a design that used a divert arm to shift cartons to the correct lane. but it raised concerns around inventory quality, jam potential and maintenance access. The team took that feedback and came up with an alternate design, using simulation to confirm it would address those concerns while still meeting throughput requirements. Beyond that, the more optimized sorter design saved nearly $700,000 in construction costs.
Tom: The simulation really helps reduce assumptions and speculation rather than guessing and basing decisions on the old knowledge. Let’s just do the virtual testing and validation now.
What effect did designing the facility virtually have on hiring and training?
Jordan: Leaders from across the country — Washington State to New York to California to Miami – were invited to join the immersive design sessions remotely, which generated a lot of excitement and helped us recruit staff for this building. We were also able to use some of the 3D simulation and VR experience screenshots to make our training materials match the physical layout that a team member is now seeing in the building. It allowed us to onboard and prepare our teams effectively by referencing the actual designs and layouts, and set our leaders and team members up for success.
So what’s next?
Jordan: Since starting inbound operations at the Houston Receive Center, we’ve been able to apply actual data from our ramp-up period to either vet the assumptions that we did have or update them for future site design. By using data obtained from the physical system back into the models, we can calibrate these models and make them more accurate over time. As we open future facilities, we have that intelligence to reference and then have that next site be even better.
Lisa: Now that we have this tool, we’ll want to continue to understand: What is that sweet spot of timing in a building design process to capture? To have the design far enough along that the immersive experience is representative of all the work that’s been done, but also early enough that we can make meaningful impact.
Tom: This is becoming the new standard. Why? Because it’s moving the needle, it’s making an impact, and it’s what Target needs to be doing right now — investing in technology that helps us do our jobs more efficiently.
