@ Supply Chain Management


Is an underperforming supply chain Home Depot’s pressing problem today?

I reported in this post (Item 2) – SCM Newz Roundup (originally reported at SC Digest) about Home Depot’s brand new panacea that is going to help it return to the top of its game. Only its no panacea. Its just foolhardy.
Here’s the gist of the SC Digest news report:

The moves clearly reflect in part the impact of Home Depot’s VP of Supply Chain Mark Holifield, who came to the post after a similar and well-respected stint at Office Depot.
He said that Home Depot would focus on improved inventory management, implement a system that will provide better visibility and control over products delivered to the home, improve visibility of product flow from suppliers all the way to the store shelf, and cut order-to-delivery lead times, and improve inbound distribution.
Home Depot said the company is also looking to improve its supply chain technology is in several other areas, including:
* Supply chain analytics and decision-support
* Demand planning and forecasting
* Store replenishment
* Financial planning relative to merchandising
Home Depot noted the power of inventory improvements, saying that every one-tenth improvement in inventory turns means drives an additional $200 million in cash flow.

Here’s what Home Depot wants to do – improve its operations in order to drive better cash flow through its supply chain. But is that Home Depot’s problem?
Like I have said before, I have not done a comprehensive survey of customer attitudes to Home Depot. So I do the next best thing i.e. stick my thumb in the air and ascertain the direction of the wind. And which way does that blow?
1. Home Depot’s Real Problem
Here’s what she recounted as her Home Depot experience:

I recently visited Home Depot so I could use a gift card. Was all primed and ready to spend several hundreds of dollars (in addition to the $50 gift card) on paint, ceiling fans, and the like. Net-net, I didn’t spend a dime at Home Depot. I ended up going to Lowe’s and Samon’s. Why? Well, the Depot was dirty, cramped and cluttered. I couldn’t even find the aisle with the ceiling fans. The paint selection was far smaller than that of other stores. Nobody seemed interested in helping me and I don’t know that I blame them. The employees I did see (huddled around the end of aisles or at the checkout counter) looked terminally depressed. Overall, a dismal shopping experience.

Whoever gave Mary Schmidt her gift card actually contributed to Home Depot’s cash flow except that it lost out Mary Schmidt in the process. That’s like getting a ‘F’ in Business 101

Read the rest of this entry »

About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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March 2007