Value Chain Analysis of Home Depot

Home Depot is a home improvement tools, equipment, and appliances retail multinational corporation. Ken Langone, Pat Farrah, Ron Brill, Arthur Blank, and Bernard Marcus founded the retail home improvement and appliances company in 1978. Today, we’ll discuss the value chain analysis of Home Depot supply chain analysis; primary and supporting activities in the process of value chain analysis Example Company. They are inbound and outbound logistics, operations, marketing, and customer service; infrastructure, HRM, technology, and procurement as an application of the value chain analysis process.

The Diverse Suppliers of Home Depot

• National Veteran Business Development Council
• Disability IN
• National LGBTQ Chamber of Commerce
• Women’s Business Enterprise National Council
• National Minority Supplier Development Council

The Value chain analysis of Home Depot supply chain analysis would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s supply chain analysis of Home Depot value chain analysis company example as follows;

Value Chain Analysis of Home Depot

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of Home Depot supply chain analysis. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of Home Depot

Some of the five main primary activities in the value chain analysis of Home Depot supply chain analysis are as follows;

Inbound Logistics of Home Depot

I-Large Supplier Network

Home Depot has established a very large network of suppliers comprising approximately 10,000 to 12000 suppliers in various countries. The company has developed a supplier diversity program with the objective of partnering up and collaborating with a diverse range of suppliers. According to an estimate, the home improvement brand invests approximately 3 billion dollars annually on the supplier’s diversity program. The objective of the company is to create opportunities and partner up with the following;

• Small business
• Disability owned businesses
• LGBTQs
• Veterans
• Minority
• Women

II-Responsible Sourcing Regulations

In order to ensure the responsible sourcing of suppliers and vendors; the home improvement and appliances brand has set up clear regulations, standards, and code of conduct. They should comply with the supplier’s regulations to keep working with the brand. It covers the following areas;

• No child and forced labor
• Human rights standards and regulations
• No harassment and abuse
• Complying with minimum wage laws of the country
• Freedom of association with unions
• Ensuring employee’s health and security

III-Supplier Innovation Award

In order to promote innovation and creativity among suppliers and vendors; Home Depot organizes suppliers’ innovation awards to recognize their tech innovation. Some of the main innovative suppliers of the company are as follows;

• Traffic Master Sheet Vinyl
• Ryobi 80V Zero Turn Riding Mower and Riding Lawn Tractor
• The Ridgid Flexshaft
• Makita XGT 40V Line of 40V Power Tool
• Kohler Extra Tall Toilet
• Glidden Cool Touch Exterior Floor Paint
• Ecolab Scientific Clean Line

Outbound Logistics of Home Depot

I-3rd Party Logistics Service Providers

Home Depot employs and partners with various 3rd party logistics service providers to offer transportation and distribution services to the company. They have transportation expertise and they help the company in distributing inventory and supplies from suppliers to the distribution centers, stores, warehouses inventory facilities, and the end customers. Some of the main 3PL partners of the company of the company are as follows;

• Schneider Logistics
• NFI
• XPO Logistics

II-Role of 3PLs

3rd party logistics service providers play a key role to the home improvement brand Home Depot in transporting goods to stores and distribution centers. They help the company in the following ways;

• Quick and speedy delivery
• Low transportation cost
• Managing inventory level

Operations of Home Depot

I-Distribution Centers

Home Depot has established a very large network of 90 distribution centers across the US to provide supplies to the 2000 chain stores of the company. The company has built them in specific locations to easily distribute the goods to the required retail stores.

The design and structure of distribution centers and stores serve multiple functions like warehousing and storing inventory. As a result, the company decreases the additional warehousing and inventory storage costs.

Marketing & Sales of Home Depot

I-Media Advertisement

Home Depot employs various media channels like TV ads, online commercials, digital media, print media, and other channels for the promotion of its home improvement appliances and tools. Multiple media channel advertisement campaigns help the company approach the mass segments of the customer market.

II-In-Store Promotion

Along with media advertisement, Home Depot also implements in-store advertisements and a personal selling approach in the store. The personal selling strategic approach in-store helps the company to give a personalized touch and personally sell products, tools, and appliances directly to the end consumers.

Services of Home Depot

Along with physical and tangible products, tools, equipment, appliances, and home appliances; Home Depot offers a wide range of services to the customers to improve the customer satisfaction level. Some of them are as follows;

• Tool and equipment installation service
• Repair and maintenance services
• Remodeling and refurnishing of clients’ houses

Supporting Activities of Home Depot

Some of the main supporting activities in the value chain analysis of Home Depot supply chain analysis are as follows;

Infrastructure of Home Depot

Home Depot has developed a very large infrastructure comprising over 2400 stores; 90 distribution centers, suppliers and vendors network, and various warehouses. Well-established and organized infrastructure helps the home improvement brand to smoothly perform its various operations in various states across the US.

HRM of Home Depot

Home Depot has employed over 463000 employees to manage its various in and out-store operations and functions. The human resource management department of the home improvement brand plays a key role in building and maintaining a healthy workplace environment. The brand has made a strong commitment to provide equal employment opportunities for all regardless of any type of differences.

Technological Development of Home Depot

Home Depot invests a significant amount of capital resources in introducing the latest technological tools, equipment, appliances, and other home improvement products and goods for customers. It allows the company to offer the latest technological products, tools, and equipment to improve the overall shopping experience of the customers. In fact, the brand has also built an online store to provide online shopping options to customers.

Procurement of Home Depot

Home Depot is highly cautious about ethical sourcing and procurement of supplies, tools, equipment, and appliances from supplies. In order to ensure sustainable procurement from suppliers, the company has set strict rules and regulations for suppliers. In case of non-compliance with ethical and sustainable practices, the company would terminate the contract with the particular supplier.

Conclusion: Home Depot Value Chain Analysis Example Company | Application of Value Chain Analysis Process 

After an in-depth study of the value chain analysis of Home Depot; we have realized that Home Depot is the world’s leading retail home improvement brand. If you are learning about the Home Depot value chain analysis example company; then you should keep in mind the abovementioned primary and supporting activities. They’re inbound and outbound logistics; operations, marketing and sales, and services; infrastructure, procurement, HRM, and technological development as an application of the value chain analysis process.