about where product is needed and automatically labels cartons appropriately, accelerating the flow of goods directly to our stores and eliminating what was once a time-consuming, labor-intensive procedure. ART is planned for rollout across our distribution network in 2004. Maintaining superior in-stock levels remains a top priority, and our focus on this metric has resulted in two consecutive years of record in-stock levels. The key contributors are: Each year, the speed at which technology changes seems to grow exponentially. At Target, weGLYPH<213>re pursuing new applications GLYPH<209> evaluating emerging opportunities and testing recent developments that may better serve our guests. Next on the horizon? We are intently focused on increasing our level of directly-imported productGLYPH<209>from its year-end 2003 level representing about 15 percent of our purchases to approximately double this amount over the next few years. And though still early, Target is also actively exploring Radio Frequency Identification (RFID) and its potential benefits. Through our commitment to technological and operational advances, Target will continue to find ways to delight our guests, retain our supply chain leadership and build on our foundation of creating substantial shareholder value. ¥ WeGLYPH<213>re also implementing a system for imported prod- ucts that incorporates more timely sales and inventory information into the merchandise allocation decision and helps us allocate imported product to our stores closer to the time of need. ¥ Another recently-launched system that is benefiting both our store team members and our guests identifies the specific aisle and shelf location for incoming mer- chandise and improves our store discipline and our storesGLYPH<213> speed of stocking new product. ¥ And finally, our Web-enabled supply chain tracking system provides end-to-end visibility for merchandise ordersGLYPH<209>from vendor booking to in-store receipt, facili- tating faster action when thereGLYPH<213>s a break in the chain. ¥ a keen focus on the in-stock positions of our 2,500 most-wanted items, ¥ improved in-stock levels for items advertised in our weekly circulars, ¥ increased efficiencies in transitioning product from one season to the next, and ¥ intensified efforts to deliver more reliability and fresh- ness through improved in-stock performance of food and consumables. Making High-Speed Connections SUPPLY CHAIN GROWTH 1998—2003 Rapid. Ready. Reliable. 13 +44% STORES SERVICED +82% CARTONS PROCESSED +110% RDC SQUARE FOOTAGE Regional Distribution Centers (RDC) Import Warehouses GLYPH<213>99 GLYPH<213>98 GLYPH<213>00 GLYPH<213>01 GLYPH<213>02 GLYPH<213>03 20 25 15 10 5 target.com Global Sourcing AMC is one of the worldGLYPH<213>s largest sourcing organizations, with approximately 2,000 team members in over 50 countries. The AMC team contributes meaningfully to the quality and efficiency of our sourcing activities and will play a larger role moving forward as we shift a significant portion of our indirect imports to direct purchases over the next three to five years. Efficient Logistics Our supply chain continues to be an area of major emphasis and substantial strategic investment. We are intently focused on initiatives that increase productivity, improve in-stock reliability and accelerate the speed of merchandise availability in our stores. Through continuous innovation, investment in technology and infrastructure and increased collaboration with our vendors, we are working to further strengthen our competitive position.