Home Depot to Invest $1.2b in Supply Chain Improvements
Companies are waking up to the importance of supply chain visibility and control. Home Depot Inc. recently announced their plans to spend $1.2 billion in the next five years to expedite their delivery to homes and job sites to compete with rising e-commerce delivery expectations.
In order to reach 90% of the U.S. population in a day or less, Home Depot will add 170 distribution facilities throughout the United States. The new facilities will incorporate direct fulfillment centers for same day or next day delivery and 100 local locations to consolidate bigger items for direct shipment to customers.
According to Mark Holifield, Home Depot’s executive vice president of supply chain and product development, the company is “realigning its supply chain to a changing retail landscape.”
Customers want deliveries to be free and timely, said Holifield. Customers are either willing to pay for quick delivery or wait for free delivery. The overhaul is about providing customers the right options, said Holifield.
This change is coming as Home Depot is trying to reduce transportation costs, improve inventory management, and integrate more strongly its developing online business with its around 2,280 physical stores. It is part of an $11 billion plan to update the company in preparation for the future of retail, said Holifield.
Shoppers are used to free two-day delivery from Amazon and are deciding to buy things based on factors like speed of delivery. This is forcing sellers to re-think their distribution networks, turning to strategies like drop-shipping and opening warehouses closer to customers.
As part of their five-year plan, Home Depot also plans to open seven e-commerce fulfillment centers stocked with products for direct shipment to homes and job sites.
The Need for Supply Chain Solutions Beyond TMS
Like Home Depot, many other companies are waking up to the reality that they need to re-evaluate and update their supply chain to increase visibility to meet consumer needs. NextGen TMS solutions like SwanLeap add innovations in visibility to your supply chain. In our increasingly digital world, supply chains and TMSs are the backbone of a connected information ecosystem where every action must be tracked to maximize efficiency and meet demands for increased flexibility, visibility, and transparency to all departments an organization.
The old way of doing TMS is inefficient. NextGen TMSs bring a level of efficiency and reliability unparalleled by the e-commerce technologies in place at most companies. Eliminate the confusion, streamline your shipping operations, and gain valuable insight. Learn more about SwanLeap’s supply chain management solutions.