Home Depot is the world’s leading retail chain store company. The SCM network of Home Depot runs and functions in the simple and easy by comprising of processes; purchasing, distribution centers, logistics, fulfillment centers, and retail stores. Today, we’ll discuss the Home Depot supply chain management activities.
The procurement team of Home Depot procures home improvement products and goods from different manufacturers and producers. The company first sends goods and supplies to the regional distribution centers and then fulfillment centers and retail stores based on customer orders.
Home Depot Supply Chain Management Activities
Let’s discuss some of the main Home Depot supply chain management activities; they’re as follows;
The SCM process of Home Depot begins with sourcing and finding the home improvement items and supplies that the retail company offers at its stores. Home Depot either develops partnerships and alliances with manufacturers and producers like LG Appliances, Samsung, BEHR Paints, or Ryobi Tools. However, the retail brand also gets in contact with the small independent businesses and they offer particular products and goods to the company.
After sourcing the production and manufacturing companies, Home Depot directly purchases home improvement supplies and materials from the industry leaders at the wholesale price rate. The company launched various supplier analysis tools to evaluate the growth and performance of its suppliers. In fact, the retail brand partners up with such companies that offer the following;
- Networking opportunities
- Education certification
- Business improvement capital opportunities
The distribution centers of Home Depot also go by the name of RDC (Rapid Deployment Centers). The retail established those distribution centers in the initial stages after revamping its SCM processes and centralizing its operations. Before the development of RDCs, the company used to ship goods directly from the manufacturer to the retail stores. The objective of the RDCs is to decrease the cost and improve the logistical processes by avoiding the overstocking of goods.
However, the RDCs played the function of hub by compiling and aggregating various home improvement supplies and goods before shipping them to the retail stores based on their demand. Every region has one RDC that serves various retail stores.
Logistics plays a key role in the Home Depot SCM processes and it makes sure the delivery of products and goods from the production units and distribution centers to the retail stores. The retail brand partnered up with over 80 3PL companies to manage its transportation and logistical requirements. However, they include both carrier brokers and asset carriers and review their bids every 3 years. Some of the logistical partners of Home Depot are as follows;
- Schneider Logistics
- XPO Logistics
Centralized SC & Logistics
Home Depot improved its logistics model during the period of 2008 to 2014 by centralizing its supply chain and logistical processes. It allows the company to transport products and goods based on the store’s requirements. However, the shipment of some products is directly from the manufacturing facility to the retail stores; the others go through the distribution centers. The objective is to decrease the inventory dumped in the store and efficiently satisfy customer demands.
The retail stores fall at the bottom of the Home Depot supply chain processes after distribution centers and fulfillment centers. They are the direct link between the company and the customers. However, it makes various processes easier like fulfillment location, return, pickup, and customer shopping.
The retail brand offers roundabout more than 40,000 home improvement products and goods to the customers at its stores. The company’s e-commerce platform offers a much higher number of products; approximately one million products are listed.
Along with offering a vast number of products and goods to the customers, Home Depot also offers product customization features to the customers. Customers could access the inventory and choose online shopping before coming to the store or picking up the products at stores, or they could choose their favorite product delivery method.
Order Fulfillment Options
Home Depot has established various order fulfillment centers to deliver goods to customers. These fulfillment centers decrease the inventory and serve various types of products and goods. Some of the main order fulfillment options and facilities that the company provides are as follows;
I-Flatbed Delivery Centers
The FDC has the capability of managing massive and bulky materials and goods like lumber or drywall. The company has built FDC in such a way that trucks could easily enter into them.
II-Market Delivery Centers
The MDC supports and facilitates the home improvement goods of the company’s SCM processes. They amplify the growth and MRO (maintenance, repair, and operations). However, MDC manages and deals with the local MRO products like doors, appliances, and windows.
III-Market Deliver Operations
MDO is a form of distribution center of Home Depot and you can find them in such areas where the customer market is small. They also function as a location area delivery hub; they deal with large items like dishwashers or washing machines.
IV-Direct Fulfillment Centers
DFC is the latest delivery center and they employ mechanical and automated warehouse processes. Their size varies from 750,000 to 1600000; their mechanical tools help the company in quickly delivering order parcels.
Conclusion: Home Depot Supply Chain Management Activities
After an in-depth study of the Home Depot supply chain management activities; we have realized that Home Depot is the world’s leading home improvement retail store. If you are learning about the SCM activities of Home Depot; then you should keep in mind the abovementioned processes.
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