“My day will go from one assumption at 1 p.m. to another by 5 p.m.—it’s unprecedented change,” Shenoy told an audience assembled in CBS’s Kravis Hall for an event on October 9th focused on “The Next Frontier in Retail: Resilient, Responsible, and Regenerative Supply Chains”. The event, moderated by CBS Professor Brett House, was co-hosted by CBS’s Green Business Club, Retail Luxury Goods Club, and the Tamer Institute for Social Enterprise and Climate Change.
For Target and its peers, tariff volatility has become a defining operational challenge. As U.S. trade policies change direction with dizzying speed, these massive retailers must make real-time decisions about where (and how) to make the products that fill their shelves.
“The key,” Shenoy said, “is to not do panic-sourcing.” Instead, she emphasized, firms must pursue diversification and resilience—all without losing sight of sustainability.
From Panic to Planning: Navigating Tariff Turbulence
The Trump administration’s shifting tariff policies have forced multinational retailers to rewrite their sourcing maps in real time. Shenoy described the strategy Target has developed in the midst of this environment: diversify suppliers, keep “Plan B and Plan C” open, and measure resilience as an asset, not a cost.
She cited examples from Target’s day-to-day operations. When a 30% tariff on Mexican goods was announced earlier this year, her team chose not to overreact. “We’re not going to make any changes. We’ll stay the course,’” she recalled. Later, the rate dropped again—at least for a time. “It’s about staying thoughtful, not reactive.”
Still, the disruption has been tangible. At one point, tariffs on Chinese imports hit 145%, forcing Target to temporarily “press the brakes” on certain categories; the abrupt slowdown left some Target store shelves empty.
Embracing greater diversification in suppliers, while necessary in the face of such uncertainty, does introduce significant complexity, Shenoy acknowledged.
Target has onboarded 35 new suppliers in Mexico alone this year. Some products, like women’s performance leggings, are now being manufactured in both Vietnam and Mexico to hedge against disruption. Other products, like the great quantity of kids’ blowing bubbles solution that Target sells each year, have required inventiveness. Target has elected to move part of its bubble production to Mexico — and “there isn’t a bubble supplier in Mexico that Target can just go to that can make at the scale it needs,” Shenoy said. So Target had to partner collaboratively with suppliers to create an entirely new product line that can scale to Target’s expectations.
“This is not something Target would have done in the past,” Shenoy said. “But this environment is forcing retailers to think differently.”
The Cost—and Value—of Resilience
House asked about the financial implications of this new approach to sourcing. After all, he noted diversification may reduce volatility, but it can also increase costs.
Shenoy’s answer underscored the formation of a new corporate calculus amid pervasive volatility: “There’s a value on resilience,” she said. “It’s not just about lowest-cost anymore.”
Target now weighs how much margin loss it’s willing to accept in exchange for a more reliable and resilient supply chain—a threshold that varies by product category. For discretionary items like apparel, a slim margin hit might be all that’s allowed, but for essentials such as diapers, a dependable supply chain is essential. “Not having diapers in stock is not an option,” Shenoy said.
Re-shoring production, she noted, is also changing the nature of manufacturing, and is in some cases pushing a move toward automation. For example, one of the manufacturers she works with moved their luggage production from China to the U.S. That luggage production line in China required 25 people. In the U.S., it requires only four, because it’s highly automated.
Shenoy pointed out how tariff policies and even successful re-shoring efforts can have unexpected knock-on implications for labor, energy use, and more.
“When manufacturing becomes more automated, it’s also more energy-intensive,” she explained, “and at the same time, the U.S. is cutting public renewable investments.” She added that new tariffs on machinery imports from Japan and Germany make it more expensive for U.S. manufacturers to invest in new factories.
“I think what’s needed is industrial policy,” Shenoy said.
Regenerative Retail: Moving from “Doing Less Harm” to “Doing Good”
Another big change that’s needed, Shenoy argued: a shift from retailers endeavoring to “do less harm” to a more ambitious goal she has termed “regenerative retail.”
At a sustainability conference earlier this year, Shenoy recalled, nearly every conversation focused on recycled materials or “take-back” programs to reduce waste. This is useful, she said—but too limited.
Borrowing from regenerative agriculture, “regenerative retail” frames sustainable operations not as a meager waste-reduction exercise but as a living system that can create positive feedback loops, like healthier supplier ecosystems, smarter planning, and reduced waste throughout a product’s life cycle.
Shenoy broke regenerative retail into three components: responsible inputs, smarter production planning, and responsible end-of-life design.
- Inputs: Retailers, she argued, must look beyond headline-friendly materials like recycled polyester to question the sheer volume of petroleum-based textiles they use. “Polyester is just oil,” she noted. “If we’re serious about reducing fossil-fuel use, we have to look at how much polyester we use in the first place.”
- Production planning: Better forecasting, shorter supply chains, and more flexible manufacturing can minimize overproduction—a sustainability lever rarely discussed in corporate climate plans. “If you plan well, you reduce waste,” she said.
- End-of-life: Finally, products must be designed for circularity. Target’s twice-yearly car-seat recycling program, which grinds old seats into reusable plastic for storage bins and other items, is one example.
Underpinning it all is a shift in mindset: linking operations and sustainability, not as separate metrics, but as mutually reinforcing goals. Operational excellence and environmental stewardship shouldn’t be two different goals, she emphasized, but intertwined corporate projects.
Columbia’s Sustainable Operations Initiative: Building the Next Generation of Practitioners
The discussion in this session often circled back to the question of how institutions can prepare leaders to align sustainability and operations from the start.
Professor Nicole DeHoratius, who introduced the event, described one way CBS is working to do just that: through its new Sustainable Operations Initiative. The initiative, in partnership with the Tamer Institute, supports case-based research, startup collaborations, and projects quantifying the true cost of omnichannel retail—including the environmental footprint of never-ending product returns.
Citing CBS’s ties to the Engineering and Climate Schools and the strong interest among students in operations and risk, DeHoratius noted, “we’re uniquely positioned to make a meaningful impact in this space.”
