Target's Proxima digital twin fixes inventory flow before launch. Fresh-food pilot lifted on-shelf availability 2.5%; Houston simulations hit 98% accuracy.
Target (TGT) built a digital twin of its middle-mile inventory system to stress-test supply chain decisions before they go live. The tool, called Proxima, lifted on-shelf availability of fresh food by 2.5% in a 63-item pilot and simulated inventory flow at the retailer's new Houston Receive Center with about 98% accuracy.
Proxima mirrors the data and logic of Target's inventory positioning system, which routes goods between facilities and stores. Inventory teams can run potential changes through the twin and see problems in advance. "If a digital twin emulation through Proxima surfaces a potential problem, teams can correct the issue or take another path," Target said in the release.
Target first ran Proxima on a small set of 63 fresh-food items, which require tight planning because of expiration dates and lead times. Simulating inventory flow changes before launch helped the team fix issues early, lifting on-shelf availability for those products by 2.5%.
The Houston Receive Center, a 1.2 million-square-foot facility that is the first of its kind for Target, serves six regional distribution centers and a flow center. Proxima simulated how inventory would move in and out of the site with about 98% accuracy, and Target said the process helped teams reduce inventory flow issues after the center opened.
Stronger inventory management is a running priority for the retailer. Target has been working on demand forecasting and machine learning to improve how it forecasts inventory and positions stock. The company plans to scale Proxima across more network functions. The move aligns with broader adoption of digital twin technology; Gartner projects the digital twin market will reach $379 billion by 2034, with GE and Unilever reporting savings from similar systems.
"Over time, the insights Proxima generates could also inform future AI-powered, agentic decision-support capabilities, helping our teams evaluate options, prioritize actions and automate operational responses," Target said.
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