The Home Depot Supply Chain Management model is based on integrated inventory management through a centralized network of 20 distribution centers, called Rapid Deployment Centers (RDCs) and three Direct Fulfillment Centers (DFCs) aimed at the e-commerce market (Bond, 2015). Orders are processed and managed to meet current and forecasted demands, sent to the regional RDCs, which service approximately 100 stores each, and sent to retail outlets to meet stock requirements (Bond, 2015). Direct Fulfillment Centers are e-commerce distribution systems. Home Depot delivers within a two-day timeframe to 90% of US based customers, and the system also leverages in store stock for same day pick-up (Bond, 2015).
Analysis of Home Depot’s Supply Chain Management and Competitive Priorities
Strategic and Competitive Priorities
Home Depot’s strategic priorities are based on; “creating an emotional connection with customers, putting customers first and simplifying the business,” as well as “…disciplined capital allocation, productivity and efficiency, …focused on continuous operational improvement, incremental supply chain benefits and shareholder value (Home Depot, 2012).” These are long standing priorities for Home Depot, as customer service and associate welfare have been the mantra of Home Depot since the company started (Wall Street Week, 2015).
Competitive priorities for Home Depot are rooted in service and cost. The organization has built its brand and business on providing exceptional service to its customers through knowledgeable associate staff, quality products, information through in store workshops, and competitive pricing to gain market share and build a competitive advantage ...
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In 2007 Home Depot transformed the supply chain management system from a decentralized direct to store delivery model, to a distribution based supply chain system, incorporating improved forecasting analytics and tools, centralized replenishment, financial planning, and transportation management.
Strategic priorities were aligned to ensure customer service and competitive pricing are the cornerstone of the business model. An adaptive Supply Chain Management system positions Home Depot to capitalize on the current market and future growth.
Recommendations to improve Supply Chain Management efficiency include alignment with Information Technology organizations, expand competitive sourcing/branding opportunities, and continue to grow and expand e-commerce business while maintaining a robust effort to expand brick and mortar stores nationally and internationally.
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