Running head: HOME DEPOT OPERATIONAL STRATEGY 1 HOME DEPOT OPERATIONAL STRATEGY 10 Vice President of Operations, Part 2 Bradford Gonzalez BUS 515: Operations Management Instructor: Phyllis Parise November 12, 2017 Home Depot Operational Strategy Weaknesses in Product Lifecycle The product lifecycle is the process that a product undergoes from its inception in the market until the point that its demand gradually drops to zero. The stages involved in the product lifecycle are introduction, growth, maturity, and finally decline. The products of Home Depot are no exception as they also undergo the same stages. However, they also have some limitations that do hinder their lifecycle. One such limitation is their lifespan and distribution during their lifecycle. It is apparent that Home Depot manufactures its products typically to fit the American population and as a result, the products fail to attain their maximum potential during their lifecycle (Lombardo, 2017). From their introduction to their decline stage, the Home Depot products are subject to limited distribution as well as exposure, which eventually makes them have a shorter time span than expected. For instance, when the organization concentrates on introducing its products to the American market and fails to pay attention to other global markets, it limits the lifecycle of the product, as it will not have a global impact that it should have. In addition, other stages that include maturity and growth are cut short since once the organization manages to exhaust the American market demand, it is unable to penetrate the other markets effectively and hence it speeds up the decline stage of the product. Another weakness that is apparent in the lifecycle of Home Depot products is the distribution of substandard products. Consumers are usually very keen on how they spend their financial resources especially when one considers the current tough economic times. This means that they are willing to either embrace a product or refuse it on many bases (Kems Jr, 2015). Regrettably, between 2012 and 2015, Home Depot managed to sabotage the lifecycle of some of their products by distributing and reselling already recalled merchandise. This was a big blow to the organization as it compromised the confidence that the consumers had in them. The faulty items included washing machines as well as fire extinguishers. As a result, Home Depot shortened the lifecycle of their products as the majority of their customers opted to get their merchandise from other distributors like Lowe or Nitori holdings who are peers as well as great competitors of Home Depot. Recommendations To counter these problems, Home Depot should first consider coming up with a product that will appeal to the global market. It should take the approach of multinationals such as Samsung, Sony, or LG that h ...

1. Running head: HOME DEPOT OPERATIONAL STRATEGY
1
HOME DEPOT OPERATIONAL STRATEGY
10
Vice President of Operations, Part 2
Bradford Gonzalez
BUS 515: Operations Management
Instructor: Phyllis Parise
November 12, 2017
Home Depot Operational Strategy
Weaknesses in Product Lifecycle
The product lifecycle is the process that a product undergoes
from its inception in the market until the point that its demand
gradually drops to zero. The stages involved in the product
lifecycle are introduction, growth, maturity, and finally decline.
The products of Home Depot are no exception as they also
undergo the same stages. However, they also have some
limitations that do hinder their lifecycle. One such limitation is
their lifespan and distribution during their lifecycle. It is

2. apparent that Home Depot manufactures its products typically to
fit the American population and as a result, the products fail to
attain their maximum potential during their lifecycle
(Lombardo, 2017). From their introduction to their decline
stage, the Home Depot products are subject to limited
distribution as well as exposure, which eventually makes them
have a shorter time span than expected. For instance, when the
organization concentrates on introducing its products to the
American market and fails to pay attention to other global
markets, it limits the lifecycle of the product, as it will not have
a global impact that it should have. In addition, other stages
that include maturity and growth are cut short since once the
organization manages to exhaust the American market demand,
it is unable to penetrate the other markets effectively and hence
it speeds up the decline stage of the product.
Another weakness that is apparent in the lifecycle of Home
Depot products is the distribution of substandard products.
Consumers are usually very keen on how they spend their
financial resources especially when one considers the current
tough economic times. This means that they are willing to either
embrace a product or refuse it on many bases (Kems Jr, 2015).
Regrettably, between 2012 and 2015, Home Depot managed to
sabotage the lifecycle of some of their products by distributing
and reselling already recalled merchandise. This was a big blow
to the organization as it compromised the confidence that the
consumers had in them. The faulty items included washing
machines as well as fire extinguishers. As a result, Home Depot
shortened the lifecycle of their products as the majority of their
customers opted to get their merchandise from other distributors
like Lowe or Nitori holdings who are peers as well as great
competitors of Home Depot.
Recommendations
To counter these problems, Home Depot should first consider
coming up with a product that will appeal to the global market.
It should take the approach of multinationals such as Samsung,
Sony, or LG that have created a global market for their

3. products. Increasing the market share of the organization to
international levels will enable Home Depot’s products to have
a longer life cycle. For example, the American economy is the
greatest determining factor for Home Depot's products lifecycle.
This means that in case the American economy collapses, their
products will ultimately lack demand and their lifecycle will be
shorter than expected.
This organization should penetrate evolving markets in Asia and
Africa. Such places have a lot of untapped market potential and
Home Depot can use this opportunity to showcase its products.
In addition, both continents have available markets as well as
labor that will be beneficial to Home Depot. In regards to the
distribution of faulty or recalled products, Home Depot should
come up with a compliance program that will take all its
products through rigorous sampling prior to presenting them to
the market. Since faulty products are bound to enter the market
occasionally, the compliance program should make sure that sell
recalled products to unsuspecting clients since they have
adverse effects on the organization (Kems Jr, 2015).
Supply Chain Management
Home Depot is among the largest retailers that deal in home
construction and improvement services and products. With more
than 2,000 stores and over 300,000 employees across the United
States, China, Mexico, and Canada, the organization has a
complex supply and logistics chain that it manages to operate
effectively given its overall success The Home Depot, 2016).
The major components of Home Depot’s supply management
include demand management, integration, and communication.
Demand Management
Burnson (2014) suggests that demand management is a very
critical component in Home Depot’s supply management chain
as it allows the company to focus on how it will meet the
demands of its customers. Through the management of demands,
the Home Depot markets its products to the customers who are
usually certain that the organization will meet their demands.
To address this aspect of its supply chain, Home Depot makes

4. its distributors and other partners aware of the needs of its
customers hence prompting them to maximize the quality of
supply and ass value to the finished products of the
organization. Through raising awareness of the customers’
needs and increasing collaboration between the suppliers, Home
Depot enhances the competitiveness of the entire supply chain
and increases business opportunities.
Communication
To make sure that it meets the demands of the consumers, Home
Depot has ensured that there exists effective communication
between all its stakeholders. The effective communication in the
whole supply chain of the organization helps to enhance
productivity and efficiency of its logistical operations by
allowing all the members to share the same operational and
demand information. Through effective communication, all
stakeholders in the supply chain are informed of the
developments in their contribution to the department thus
allowing them the ability of promptly adjust their operations to
be in line with any changing conditions in the existing demands.
In addition, the communication channels in Home Depot enable
them to respond rapidly to novel business opportunities that
assist them in getting new products and services to the market
quickly or increase the levels of supplies after a successful
market campaign.
Integration
To enhance its supply chain, Home Depot has integrated the
procurement processes in order to reduce its inventory costs. To
make sure that the integration works, Home Depot has created a
system where suppliers share up to date information concerning
demand to route their products to their warehouses for onward
shipment to stores and other delivery points with the least time
in inventory. Consequently, this cuts down Home Depot’s costs
significantly thus enabling them to offer their customers goods
at competitive prices. To achieve this level of integration, Home
Depot has developed a single information network that enables
its suppliers and distributors to access and share demand and

5. supply information more securely (Burnson, 2014).
Challenges and
Solution
s in the Supply Chain
Access to Latest Technology
It is quite evident that one of the biggest challenges that Home
Depot can face in its supply chain is the access to the latest
technology. In the current world, organizations are keen on
upgrading their technology to ensure that they offer the best to
their clients (Stefansson, 2012). However, in the case where
Home Depot fails to access the best and latest technology, it can
run the risk of losing some of its market share to its
competition. To solve this issue, the organization should
outsource technology-related issues to organizations specialized
in such matters. This will allow Home Depot to concentrate on
its core business of home improvement and construction.
Safety and Quality Products
Home Depot has imminent pressure from the consumers to
produce high-quality products. An increase in the recalling of
products can damage the reputation of the organization, which
can be a very expensive matter. To avoid such instances, Home
Depot should ensure that it thoroughly tests all its products to

6. make sure that they meet the minimum required standards.
Rapid Changing Markets
Psychological, economic, social, as well as cultural factors have
a way of influencing the behaviors of customers and hence the
demand for goods or services. Home Depot runs the risk of
having consumers perceive their products as obsolete
(Stefansson, 2012). To address this issue, Home Depot’s supply
chain should be vigilant in following the market trends. They
should be active on social media platforms and make any
necessary adjustments to their business model.
Quality Management Tool
The Cause and effect or Fishbone Diagram
This is a very effective quality management tool as it allows
organizations to simulate different circumstances and be able to
know the effects of implementing certain strategies. It is a
significant tool as organizations can use it in structuring
brainstorming sessions and sort out ideas into useful categories
thereafter. In this instance, Home Depot should use this tool in
sorting out its challenges in the methods it uses, machinery,
personnel, materials, and the market environment. Integrating
all these factors while making a decision based on the
organization will enable Home Depot to come up with a
working formula that will improve its quality (Ilie & Ciocoiu,
2010).

7. Just in Time Philosophy
Organizations use this inventory strategy to increase efficiency
and reduce waste through the receipt of products strictly when
needed in production. As a result, the organizations reduce the
inventory costs. However, to employ this approach, the
organization has to be very accurate in forecasting.
Advantages
Compared to the conventional approaches, this method has three
main advantages. First, organizations spend relatively less
finances on raw materials as they purchase just enough to
produce the finished products. Secondly, organizations are able
to save on their operational costs since they do not need plenty
of warehousing space. Lastly, the production runs are not long
meaning that the manufacturers can move from production of
one product to another easily thus making their products appeal
to the demand.
How Just in Time Philosophy Impacts Quality Assurance
It is first prudent to note that this approach only advocates for
production of goods needed at a particular time. As a result,
organizations do not end up storing the finished products that
may depreciate with time hence compromising their quality.
Secondly, the approach promotes flexibility in the production
line of a company hence fostering invention and innovation that

8. eventually leads to the production of high-quality products.
Lastly, this philosophy enhances the quality of customer service
as the organizations that employ this approach have better
relationships with their clients because they always meet their
demands (Reid, 2013).
Qualitative and Quantitative Forecasting Methods
Qualitative forecasting methods are based on the judgmental or
intuitive evaluation. Organizations typically use such
approaches when there is scarcity of data. The common
qualitative methods include market research, Delphi method,
personal insight, panel consensus and sales force estimates.
Quantitative methods, on the other hand, rely on historical
demand data. They entail the use of time series and associative
models. In this instance, the use of Delphi method and time
series can be effective in explaining the qualitative as well as
quantitative approaches (Dubrin, 2011).
Delphi Methods
Time Series Approach
The supply chain relies on existing market information to
predict demand and supply
Supply chain relies on past trends to determine demand or
supply
Applicable when there is a sudden shift in the demand for
products
Applicable when suppliers and distributors anticipate a repeat in

9. demand for certain products. For example, they anticipate
certain products to be on demand during the Christmas festive
season.
Delphi Method Advantages and Disadvantages
The main advantage of the Delphi approach is that it relies on
the feedback of market experts. Such individuals have a higher
probability of giving the correct forecast related to the demand
and supply forces of the market. However, the main challenge
with this process is that it is complicated and that the
questionnaires may limit the responses of the experts hence
limiting their insight (Dubrin, 2011).
Time Series Approach Advantages and Disadvantages
It is evident that humans are creatures of habit and that they are
most likely to repeat their behaviors. Therefore, the use of time
series analysis can be beneficial as it will enable organizations
to forecast when certain products or demands may be back in
demand. However, the main weakness that lies in the use of
time series is that the historical data may be obsolete and that
the consumers may have changed their tastes and preferences
towards certain products or services completely. If that is the
case, the use of time series analysis can be disadvantageous to
an organization (Dubrin, 2011).

10. References
Burnson, P. (2014, June 10). Omni-channel retailing creates
new challenges for supply chain managers. Retrieved from
Logistics Management:
http://www.logisticsmgmt.com/article/omni_channel_retailing_c
reates_new_challenges_for_supply_chain_managers
DuBrin, A. (2011). Essentials of management. Nelson
Education.
Ilie, G., & Ciocoiu, C. N. (2010). Application of fishbone
diagram to determine the risk of an event with multiple

11. causes. Management Research and Practice, 2(1), 1-20.
Kerns Jr, R. W. (2015). The Counterfeit Good Crisis in China:
A Systemic Problem and Possible