Back to the Future: Home Depot to buy HD Supply
by Dick Friedman
Once upon a time, 2006 to be exact, in a not far away land, Home Depot sold MRO products to the industrial and commercial markets. But top executives at Home Depot determined that their strategy should be to focus on homeowners and home contractors, so they spun off MRO products into an entity dubbed HD Supply, a threat to some of you. Part of that strategy was to establish Home Depot Pro, which has increased the threat to some traditional distributors. Now, new top executives at Home Depot have determined that their strategy should be to also sell to those same the industrial and commercial markets that were abandoned 14 years ago. But rather than start from scratch, they opted to buy HD Supply (for reportedly some $1.6 billion less than they received in 2007).
Will Home Depot integrate HD Supply into Home Depot, as it once was? Will Home Depot again stock a large breadth and depth of MRO products? Will Home Depot electronically request HD Supply to deliver to Home Depot customers, including Pro accounts? Regardless of the answers, MRO, industrial, fastener and tool distributors need to prepare for increased competition. And one aspect of heightened competition is to be able to deliver to customers all the products promised on an order, in the quantities ordered, and on time. If customers are disappointed too often they will place orders elsewhere, or perhaps take all their business elsewhere.
Here are some “tips” for insuring that the warehouse can fulfill customer expectations – tips for increasing warehouse accuracy to 99 percent or more.
Organization: Store the most frequently-picked items closest to the packing area, and even where items are stored by “family” or vendor line, store faster moving families closer to the front of that area. Regardless of arrangement, if more than one item is stored on the same shelf, location codes should contain the identification of each usable location (aisle, bay, level, slot). The exception is that heavy products should be stored on the lowest shelf or on the floor.
Receiving: If a unit of measure in PO/put-away data (on the screen of a scanner or on a printed put away list) is not the same as that on the corresponding packing list, the receiver should note that discrepancy on the packing list or record it via the scanner.
Put Away: High picking accuracy requires recording storage locations as soon as possible, and accurately. If there is no permanently-assigned storage location for a newly-received item because its location is determined after receiving, the person doing the put away must record the selected location on any document taken along during put away (e.g. copy of PO) or a put away form, or via bar code scanning of the location-ID code. If paper is used, the new location ID must be entered into the ERP system ASAP.
Pull Down: The time to replenish picking locations from bulk/overflow is before daily picking begins, regardless of whether someone is using a printed pull-down list or displays data on a bar code scanner. Pulling down and picking at the same time leads to congestion that tends to cause mistakes.
Picking: To avoid the rushing that causes mistakes, items must be picked in a sequence that minimizes walking time, which is minimized by storing items as described in “Organization”, above. But listing all items on one pick ticket or displaying all on a scanning device may not minimize picking time. If there is a great variation in item size or weight, using one person to pick all the lines for an order may take more time than splitting the order into two or more tickets or RF-displays – one for the smaller items, and one for the larger/heavier items.
Packing/QC: If possible, during packing, before an item is placed in a carton or wrapped or simply placed on a pallet, the checker should compare the code of the item to the data for the order; visually or via scanning bar coded labels; and verify the quantity being packed to the quantity on the order. To avoid repeating mistakes already made, an order checker should not be the same person who picked the order being checked.
Loading: To save time and reduce mistakes, the smaller and lighter items and packed cartons of an order should be placed on rolling shelves that are used only for staging outbound orders (not picking), with only one order on any section of a rolling shelf unit. Each rolling shelf can be pushed into or near the appropriate truck.
Although Home Depot and HD Supply have spent millions on their warehouses, traditional fastener, tool, industrial and MRO distributors can increase customer satisfaction by using these tips instead of spending large amounts of money.
For more than 20 years, Dick Friedman has helped fastener, tool, industrial and MRO distributors prevent warehouse mistakes that lose sales and customers. Dick has even helped significantly increase warehouse accuracy for distributors using bar codes but not achieving a high level of accuracy. He does Not sell systems, software or warehouse technology, and is an objective and unbiased Certified Management Consultant. Contact him at www.GenBusCon.com for a FREE consultation or more information.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
