Home Depot: Supply Chain Excellence at its Finest
Home Depot had ignored its supply chain for a long time, as it was not a focus of the company. While the company had rapidly expanded and was very successful, the downturn in the housing market caused construction and credit to slow, forcing Home Depot to cut expenses by streamlining its operations.
It was time to stop ignoring the logistics side of their business and start a formal distribution network. After conducting an in-depth distribution network study, Home Depot came up with a strategy for rebuilding their distribution process and controlling costs by centralizing operations, rather than being so store-centric.
Their new strategy focuses on 24 rapid deployment centers, or RDCs, that will be strategically located throughout the country, each serving approximately 100 stores.
The centers will act as a gateway distribution facility, designed for quick cross-docking of large volumes of merchandise, so very few items will actually be stored there.
Although only about a third of the RDCs are up and running at the moment, Home Depot has already reaped enormous benefits such as flexibility, improved replenishment, and less forecasting errors. By upgrading their technology and implementing a better method of distribution, Home Depot was able to greatly improve their supply chain, going from almost non-existent to superb.
If your supply chain could use an upgrade, you may want to look into some solutions that will help streamline your operations and improve efficiency.