The Home Depot Shares Delivery Improvements
When it comes to delivery, a paramount component of the value chain, The Home Depot's journey toward optimization has also evolved. As The Home Depot started to build out the next generation of its supply chain, the company recognized the pivotal role that efficient delivery plays in its operations.
During the conference, Decker highlighted three main components of delivery in its supply chain, commenting that while "you are never done with your supply chain," the goals Home Depot articulated back in 2017 are largely done.
Market Delivery Operations
The first of the three components being what The Home Depot calls market delivery operations (MDOs), box truck-enabled last mile delivery through Home Depot’s distribution hub.
Home Depot currently operates around 100 of these MDOs around the country, he said. This network predominantly caters to the retailer’s appliance business, handling millions of appliance deliveries a year.
Additionally, Decker said the last mile of the box truck operation itself has largely been third-party, but the recent acquisition of Temco marked a significant step toward insourcing more of this last-mile delivery. Future plans include expanding the product range, encompassing items like large grills and patio sets, to optimize efficiency.
Direct Fulfillment Centers
The second component, Decker noted, is Home Depot’s direct fulfillment centers (DFCs).
“We had a goal to be able to ship next-day to 90% of the country,” he said. “That’s essentially complete. We are high 80-percents. These are 1-million-square-foot big, big operations and largely complete.”
Flatbed Distribution Centers
The third component, he explained, is what the retailer calls “flatbed distribution centers.” These FDCs offer the capability to deliver products directly to customer job sites, alleviating the burden on in-store operations.
“They are a combination of a national footprint we have had for some time on lumber replenishment in big and bulky building material replenishment for our stores,” Decker said. “We now move those older BDCs into these new flatbed facilities and you add customer job site delivery capability in addition to the store re-plan.”
“So you are leveraging the inventory, you are leveraging the operation, you are taking that activity out of the store. We have always delivered that type product for years out of our store, but you just think of the double and triple handling that goes on the product out of the store. It’s a retail environment. It’s not a wholesale distribution environment.”
This approach of taking that activity out of the store ensures more effective service, improved customer satisfaction, and on-time, complete deliveries. While a number of the flatbed distribution centers are up and running, the company still has room to grow, Decker noted. “I don’t even know if we are halfway done in terms of the flatbed to the customer,” he said.