A major supply chain transformation project launched by Home Depot in 2007 continues to move forward "at full speed," says Charles Armstrong, vice president for supply chain and distribution. The ultimate goal of this ongoing project is to make Home Depot "a fully interconnected retailer," capable of providing end customers with a host of options in terms of how they purchase and take delivery of goods. This goal, in turn, requires Home Depot to excel in supply chain execution across all channels, Armstrong says.
The most comprehensive and challenging aspect of Home Depot's transformation effort to date has been the completion of 19 new rapid deployment centers (RDCs). "An RDC is not a warehouse; it is a large flow-through facility that typically serves about a hundred stores," Armstrong explains. "RDCs do last-minute allocations and deploy to the stores as quickly as possible," resulting in better in-stock positions and higher service levels, he says.
In addition to streamlining the efficiency of its replenishment and stocking operations, Home Depot also has made significant investments in inventory planning and transportation management systems and has quadrupled the size of its workforce, Armstrong says. And the project is far from over. "We continue to work on channel optimization, cycle-time acceleration and in-stock improvements," Armstrong says. "We still have several years of hard work ahead, but the bottom line is the transformation is moving forward a full speed," he says.
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