Home Depot



Home Depot

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant information relating to the analysis of supply chain operations at Home Depot. A company with operations nationwide and internationally, requires efficient management of the supply chain. Similarly, there are companies that claim to manage the operation of processes, either through corporate or centralized coordination, or through a scheme of shared services, with some aspects of regional or local level. The supply chain operations in a company are made up of various processes ranging from planning to distribution of all products, and even sometimes include customer service. In this study, the author will examine the supply chain operations at Home Depot by defining the nature of its separate functions i.e. purchasing, inventory management, transportation, customer service etc. Finally, the author will explain reasoning as to which functions in the organization's supply chain should be centralized, and which should be decentralized.

Discussion & Analysis

Home Depot

Home Depot is the most rapidly growing retailer in history of U.S. Home Depot is the largest home improvement retailer and the second largest retailer behind Wal-Mart in the United States based on net sales for the 2005 fiscal year. Home Depot had over 40 acquisitions from 2001 to 2006 alone with 21 being completed in 2005. In 2005 net sales increased 11.5% to $81.5 billion. According to the Home Depot management this was due from an increase in comparable stores sales of 3.8% and from new there newly acquired businesses. The retail stores average customer spending increased 5.6% to a record $57.98 per every transaction. Service revenue increased from $5 billion in 2004 to $5.8 billion in 2005. The company invested $3.9 billion in capital expenditures during fiscal 2005 for store modernization and technology as well as opening 179 new stores. The company also closed 22 stores during the 2005 year. At the end of the fiscal year the company's return on invested capital was 22.4% compared to 21.5% for fiscal 2004 (Jacobs, 2011).

The supply chain of Home Depot encompasses the business processes, people, organization, technology and physical infrastructure that allow the transformation of commodities into intermediate and finished products and services that are offered and distributed to satisfy consumer demand. Despite the number of common characteristics: the supply chain management of Home Depot is based on concepts such as coordination and integration , they emphasize the harmonization of procedures between members of the supply chain and provide cross-functional business processes at the center for value-added to achieve for the entire supply chain management. At Home Depot, the supply-chain management is manifested in particular as part of the Efficient Consumer Response concept (ECR). This is an industry-wide initiative to offer optimal structure for consumers in retail stores while streamlining of supply chain processes (Hugos, 2011).

Supply Chain Management at Home Depot

At Home Depot, the supply chain is a subsystem within the organizational system that covers planning activities involved in finding, obtaining and processing of ...