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Innovative Supply Chain Management: A Case Study of The Home Depot and Convoy
Technology Category
- Functional Applications - Transportation Management Systems (TMS)
- Sensors - Level Sensors
Applicable Industries
- Specialty Vehicles
- Transportation
Applicable Functions
- Logistics & Transportation
- Product Research & Development
Use Cases
- Supply Chain Visibility
- Transportation Simulation
The Challenge
The Home Depot, a leading home improvement retailer, faced significant challenges during the COVID-19 pandemic. The company had to deal with the possibility of social distancing in warehouse and distribution facilities, and manage extraordinarily volatile demand. The nature of their freight, which includes bulky, heavy, and difficult-to-handle items such as appliances, lumber, light fixtures, and power tools, made loading and unloading time-consuming. This potentially delayed carriers and pushed detention costs higher. The company also had to manage the additional physical asset and matching problem in the yard due to their heavy reliance on drop trailers. The pandemic further complicated these issues, necessitating a quick response to lessen the impact on drivers and implement a flexible strategy for loading and unloading trucks.
About The Customer
The Home Depot is a leading home improvement retailer in the United States. In 2017, the company announced a $1.2 billion investment in its supply chain, with a goal to construct approximately 150 new logistics facilities in the United States within three years. The company's focus on serving customers both in-store and online supported 80% digital sales growth in the third quarter of 2020, with 60% of those orders fulfilled at stores. Despite the challenges posed by the COVID-19 pandemic, The Home Depot managed to increase its comparable U.S. sales by 24.6% year-over-year in the third quarter. The company's supply chain operation has fostered a culture of innovation, encouraging experimentation and collaboration with freight tech startups, a commitment to sustainability, and new ways of partnering with carriers.
The Solution
In response to these challenges, The Home Depot partnered with Convoy, a digital freight network, to implement a new transportation strategy. This strategy involved the use of Convoy's innovative solution, Convoy Go, which offered a gray trailer pool for drop trailer solutions. This was particularly beneficial as it did not require carriers to commit their trailers, a common requirement by most freight brokerages and non-asset transportation providers. This solution was especially useful for small carriers who lacked shipper relationships and extra trailer capacity. The new strategy helped carriers deal with difficult-to-handle freight and played a key role in keeping The Home Depot’s network fluid. This partnership was part of The Home Depot's broader commitment to supply chain innovation, which included a $1.2 billion investment in its supply chain infrastructure and a culture of technology experimentation.
Operational Impact
Quantitative Benefit
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