By Paul Scott Abbott, AJOT
The Home Depot’s Holifield meets big retailer supply chain challenges
As senior vice president of supply chain at The Home Depot Inc., Mark Holifield is responding to many challenges, including through use of the Georgia Ports Authority’s Port of Savannah as one of four primary import gateways.
Holifield shared industry and personal insights in an exclusive interview as the American Journal of Transportation caught up with him – in his orange company apron and providing assistance to shoppers – at The Home Depot store in the shadow of the company’s headquarters in suburban Atlanta’s Cobb County.
As the largest U.S. home improvement retailer, The Home Depot has more than 2,200 stores, in each of the 50 states and beyond. Based solely upon those numbers, the company’s supply chain operations must pose significant challenges. What are the greatest of those challenges, and how are you responding?
Certainly, the size and scope of The Home Depot supply chain is vast. One of the things I first learned when I came here [in 2006] was that you can add three zeros to pretty much any number that you look at, because the volume can be just staggering.
There are many, many interesting things about The Home Depot from a supply chain perspective. One of the challenges we have is related to the type of construction that takes place in different parts of the country. Homes that are built in Boston are quite different from those in Florida or Phoenix… different construction techniques, different vendors for windows, doors, flooring, those sorts of things. So it does lead to a complexity in the supply chain beyond that of many other retailers. We work with our merchandising team to assort the stores correctly for the local area. That’s been a real education for me.
Another key challenge in The Home Depot supply chain is that our business is very, very seasonal compared to other retailers in many cases. At Office Depot, we were able to find out when the first day of school was in every school district in the country and manage our supply chain around those dates. What we don’t know with The Home Depot is exactly when that first day of spring is going to be. And, once that first day of spring has arrived, that weekend, our stores go crazy with the volume spike that occurs. So our supply chain has to be poised to respond when spring breaks anywhere in the country, and it breaks at different times around the country. It does make just-in-time delivery and some of the key aspects of the supply chain difficult to execute. You have to plan for that and be ready when that first beautiful weekend happens and be ready to replenish stores based upon that.
One of the things The Home Depot has been engaged in recently is the expansion of online business. How has the supply chain evolved to support this e-business?
We do operate direct fulfillment distribution centers that actually fulfill online orders. We also fulfill online orders direct from vendor to the customer, and we’re working on fulfilling online direct orders from our stores.
Today, you can buy online and pick up product in your local store and have that order picked and packed and ready to go for you when you come into the store. You can buy online and return in store, which is a great convenience for our customers. That’s one of the unique advantages that bricks-and-mortar retailers enjoy over pure-play-online competition.
We’re working more and more on what we call “interconnected retail,” and that’s really delivering on the promise for our customers to be able to fulfill what they need anywhere, anyhow, anyway they want, whether that’s picked up in the store or delivered to their jobsite or their home. We see this as a key challenge going