Supply Chain Management Industry Essay

Submitted By burnout2588
Words: 2461
Pages: 10

The chosen company for this assignment is Home Depot Inc. In order to better understand the complexities related to the supply chain of the company it is vital to understand the corporate activities and the industry in which the company operates.
According the homepage of Home Deport, www.homedepot.com, Home depot was created in 1978 and is a company that uses a warehouse-style stores in order to sell various building materials, house supplies, lawn and garden products. Home depot sells to both the households as well as to the improvement contractors, salespeople, and various building professionals. Home depot also owns Expo Design Center stores, which deals with the house renovation, Home Depot Landscape, Home Depot supply stores, and Home Depot floor stores.

In 2004, Home Depot Inc owns over 1800 stores in the USA and abroad (Canada, and Mexico). Home Depot formed strategic alliances with the suppliers in order to market numerous products under different existing names. For instance, Home Depot Inc sells products created by John Deere, Thomasville, Silestone, Ridgid, Behr Premium Plus, Mill’s Pride, Husky, Toro, Vigoro, GAF, Lithonia, Honda and others. Home Depot Inc also provides installation services, for the Do-it-for-me (DIFM) customers.

Home Depot Inc in 2003 had sales of over $13 billion and operates stores in 20 countries, while employing over 45 thousand people.

Prior to speaking about the actual supply chain of Home Depot it is necessary to understand that the supply chain is one of the most important parts of the logistics management, which if managed properly will certainly cut costs, speed up work at Home Depot and contribute to the improvement of the customer service.

Logistics at Home Depot is all about proper coordination of supply materials and information with respect to the overall organizational operations (Lambert, 91). Supply chain management at Home Depot deals with the chain issues from suppliers to the customers. Its main objective is to control the total costs, improve the total organizational quality, maximize Home Depot customer service and value, as well as increase corporate profit. Home Depot finds its supply chain management a rather complex subject simply because it involves a shaky between the proper buying, product storage, information flow, transportation and commercial relationships and thus has to consider many things at once. Yet, the game is worth the candles and if applied properly Home Depot is expected to remove no-value-added waste out of operations, while retain only value added products and become even more competitive.

Home Depot’s supply chain is about smooth and efficient flow of raw materials through the organization to the final customers (in the form of goods). Home Depot’s supply chain management indeed replaces the ‘traditional’ management practices of buying, storing and moving merchandise and raw materials used for production.

Historically, the production and operations management would focus on things like product. Thus it would deal with things like trains/cars/boats, warehouses, and factory production lines (Hugos, 88). In the past it was enough to buy enough of raw materials in advance to assure that there is enough for long production and there is no raw materials shortage. Yet once the competition intensified and created much shorter product life cycles, it became rather risky and expensive to buy a lot of raw materials in advance. Thus, it became understood that service-driven production systems should and will replace ‘inventory-driven production systems’. The latter has become the industry standard for virtually any company in the USA because it is pulled by the existing market demand for the product, rather than produced in advanced and then pushed by the company through its distributors as it has been a common practice in the past.

Speaking about Home Depot, I have to note that prior to getting a better management of its supply chain the…