Assignment 3 Vice President of Operations, part 3 Cary Grant.docx

Assignment 3: Vice President of Operations, part 3
Cary Grant
Bus 515
December 7, 2017
HOME DEPOT
Statistical Technique
Six Sigma Approach
Statistical technique
Organized around five-step plan, DMAIC
Define
Measure
Analyze
Improve
Control (Reid, 2012)
This Photo by Unknown Author is licensed under CC BY-NC
Statistical Tools for Control Quality
Controlled by taking statistical samples

Sampling used for detecting and correcting faults
Provides:
Standard of desired action or result
Means of measuring or comparing the actual action or result
Corrective action when the result deviates from acceptable
standard
This Photo by Unknown Author is licensed under CC BY-NC-
ND
Just in Time
Faster customer response and reduced waiting time
Improves productivity
Reduces waste and excess inventory
This Photo by Unknown Author is licensed under CC BY-NC-
ND
Factors for Location Decision
Proximity to customers
Proximity to labor source
Proximity to suppliers
Community considerations
This Photo by Unknown Author is licensed under CC BY-SA

Three Step Process
Identify dominant location factors
Develop location alternatives
Evaluate location alternatives
Key Concepts
Key concepts related to capacity planning and facility location
for the new location
Current Work System Design
Feasibility in the job design
Work Designs Competitive Advantage

Running head: VICE PRESIDENT OF OPERATIONS, PART 1
1
VICE PRESIDENT OF OPERATIONS, PART 1
6
Vice President of Operations, Part 1
name
Bus 515

Strayer University
Professor Phyllise Parise
October 23, 2017
Introduction
With the intentions of providing one-stop shopping for do-it-
yourselfers, Bernie Marcus and Arthur Blank founded The
Home Depot in 1978. When the founders opened the first two
Home Depot stores in Atlanta, Georgia on June 22, 1979, they
did not realize how revolutionary the newly designed hardware
store would be for both the home improvement and retail
industry. The company has grown over the past thirty-eight
years to be the world’s largest home improvement retailer with
more than 2,200 stores and more than 400,000 employees in
Canada, Mexico and the United States (The Home Depot, 2016).
The closest competitor to The Home Depot is Lowe’s, which
was founded in North Carolina in 1946. The culture and
success of The Home Depot is built on the eight values or
guiding principles. The values that are upheld are creating
shareholder value, entrepreneurial spirit, taking care of
employees, respect for all people, doing the right thing,
building strong relationships, giving back and excellent
customer services. The Home Depot uses a unique three- legged
stool operating strategy based on customer experience, product
authority, capital allocation driven by productivity and
efficiency, and interconnected retail that drives lasting customer
and shareholder value (The Home Depot, 2016).
Key Elements of Operational Efficiency with its Operational
Strategy
A company’s organizational strategy consists of all the actions
they plan to take to achieve long-term goals. The strategy arises
from the company’s mission statement, which tells why the
company is in business and its vision statement which is what

the company will be achieved when it achieves its mission
(Johnson, 2012). According to Furguson (2017), The Home
Depot’s mission statement is “to provide the highest level of
service, the broadest selection of products and the most
competitive prices”. The mission statement identifies The Home
Depot’s key elements of its operational strategy as high-quality
service, broad product selection and competitive prices. The
Home Depot’s vision statements identify several more key
factors that define the company’s operations. The vision
statements are to provide “one-stop shopping for the do-it-
yourselfer” and “to create a company that would keep alive the
values that were important to us. Values like respect among all
people, excellent customer service and giving back to
communities and society” (Ferguson, 2017). The statement
shows that The Home Depot desires to be a one stop shopping
venue that offers a wide variety of products to do-it-yourselfers
and suggests values and corporate social responsibility that the
company is pursuing.
Tasks Out of Alignment with Operational Strategy
Operational efficiency has been a crucial part of achieving low
prices while still offering high levels of customer service,
however, some tasks do not align with the operational strategy.
One task is the hiring of outside services to complete projects
for consumers. This process takes away from the mission and
vision of the store. Another weakness is that e-commerce has
taken away from the customer service that The Home Depot
strives to provide. Because more people are shopping online and
having items shipped to store, The Home Depot is reducing the
amount of staff in store to reduce cost. This gives the brick and
mortar location a disadvantage because consumers have higher
expectations of a physical store. A third weakness would be
timely identifying and effectively responding to consumer
needs, expectations ad trends (The Home Depot, 2016).
New Operations Strategy
A new operations strategy can be created for The Home Depot

based on competitive priorities. The four competitive priorities
to be used are cost, flexibility, quality, time and innovation.
Competitive priorities represent different areas of focus by
which a firm can achieve a competitive advantage. Home Depot
can improve its operations strategy by continuing to not only
focus on low costs and quality products but also on the
flexibility of getting products and the amount of time it takes to
get products to customers. They have already started to head
this way by allowing products ordered inline to be picked up in
store or delivered to the customers home. It is also possible to
buy a product at one store and pick it up at another store (The
Home Depot 2016).
Enablers
In general, organizations can compete in five key competitive
priorities - cost, quality, time, flexibility and innovation.
Operation’s managers help to support a firm’s strategy to be a
low-price leader through good design and by eliminating costs.
Most of the costs are endured from the supply chain. Many
operations managers focus on improving the quality of goods
and services provided. Enablers of
design flexibility include outsourcing, empowering employees
as decision makers, information technology, and close
relationships with customers to understand the needs and wants
that are emerging. Innovation is supported by operations
managers by introducing new goods and services.
The Home Depot has equipped many relevant, instructive, and
extrapolative features to its system which will act as enablers to
guarantee the long-term achievement of their method. Three
facilitators that are used are inventory visibility, predictive
customer analytics, and fulfillment strategy. Inventory visibility
allows consumers to search online for products they need and
receive feedback to the availability at local stores. The pro of

this enabler is that consumers know if the store has what they
need prior to driving to the store. A con of this enabler is that
when the inventory is wrong, customer service has to deal with
unsatisfied customers. Another con is that if the product is
seasonal, it shows as being in stock even if it is not.
The use of data mining through social data, product reviews,
search trends and purchase patterns to forecast and direct
consumer purchasing options is predictive customer analytics.
The con of this enabler is the elevated level of data breaches,
which are causing fewer consumers to use e-commerce, restricts
the amount of data available. A pro is the personalized shopping
experience of consumers in comparison to the bond with sales
associates within the store. Fulfillment strategy must provide
numerous options to catch the attention of consumers. Retailers
are concentrated on building in-store, online, and direct-to-
consumer options and many are leveraging current and new
organization in creative ways. A con here is that product that
have already been inventoried into a store cannot be repackaged
and shipped to a consumer. A pro is that storefront locations
can be used as distribution centers making it possible for
consumers to buy products online and receive delivery quicker.
Conclusion
The Home Depot must remain aware of the operational
efficiency with its operational strategy and determine what
tasks are not in alignment with the company’s operational
strategy. After each determination, another operations strategy
can be developed using the competitive priorities of cost,
quality, time, flexibility and innovation. The company can also
develop new enablers that are aligned with the long-term
strategies. The pros and cons of the new enablers must be
evaluated as well. The Home Depot will continue to be an

industry leader as long as it continues to ensure operational
efficiency with its operational strategy and makes necessary
changes as needed.
References
Ferguson, E. (2017, February 3). Home Depot’s Vision
Statement & Mission Statement - Panmore Institute. Retrieved
from http://panmore.com/home-depot-vision-statement-mission-
statement
The Home Depot. (2016). The Home Depot | About Us.
Retrieved from https://corporate.homedepot.com/about
The Home Depot. (2016). The Home Depot 2016 annual report.
Retrieved from
http://ir.homedepot.com/~/media/Files/H/HomeDepot-
IR/reports-and-presentations/annual-reports/annual-report-
2016.pdf
Johnson, S. (2012, December 18). What Is the Meaning of
Organizational Strategy? | Chron.com. Retrieved from
http://smallbusiness.chron.com/meaning-organizational-
strategy-59427.html
Running head: VICE PRESIDENT OF OPERATIONS, PART 2
1
VICE PRESIDENT OF OPERATIONS, PART 2
8
Vice President of Operations, Part 2
name
Bus 515
Strayer University

Professor Phyllise Parise
November 16, 2017
Weaknesses in Home Depot’s Product Life-Cycle
Home Depot being a home improvement retailer in
the American, Canadian and Mexican communities, it has
developed a supply chain which helps to supply and distribute
products in these markets. It has developed rich community with
a strong brand and customer loyalty. Although it has achieved
over 270% growth, its product life cycles have different
weaknesses which influence the operations of the company the
market. These weaknesses include a drop in sales due to the
seasonality of its markets (The Home Depot, 2016). Consumers
do not use its products during the bad weather, especially
during the 1st quarter. It becomes a challenging aspect affecting
the Depot's products and services. There is also pricing changes
and fluctuations due to increased competitions in the
community. At the introduction stage the product has market
due to the loyalty of consumers, but at the growth stage, there is
a stiff competition from other companies such as Lowe's. There
are the weaknesses due to market trending changes especially
during the different seasons of the year. This influences how
consumers value the product and use the retailer’s products.
New product and Design
As a home improvement retailer, there is the need for
diversity due to the nature of its strong brands and market
share. Home Depot should focus on the global niche and
introduce new products to tap the gap between home
improvement and housing fashion. For instance, it can focus on
developing new products such as housing fashion from
improved and installed cloth wear. This should new a new brand
and style for the company to improve its reach into the
community and its markets (Hill, Jones & Schilling, 2014). The

nature of the new fashion such as from home or in-house wear
to bedroom comfort. Bedroom clothing and home comfort
should target home builders and designers in the community. As
a new product, the Home Depot community should focus on
developing the growth of its market share and base. This will
ultimately increase profitability and provide a new redesign to
the culture of its consumers in the market.
Strategies to Strengthen the Operation
There are different strategies the company can use in
strengthening the new products and brand. This is to directly
introduce the products in its stores and market them directly
through a vertical business model. The aim is to improve,
increase and maintain a common edge especially under
producing and providing the necessary resources to improve the
expectations of the new consumers. More importantly, the
company should also hold and introduce promotion through gift
vouchers on the first come serve basis (Hill, Jones & Schilling,
2014). The home clothing blended with an insight into home
improvement will help and introduce the value, resources, and
operational effectiveness. It is also a measure focusing on the
role and responsibility of the company's new brands and which
is through quality assurance for its consumers. This is through
the introduction in the markets through marketing and
improving consumer customization to meet the demands of its
consumers. This has worked for different companies in the
clothing industry such as Nike and Under Armour Inc.
Key Components of Home Depot’s Supply Chain
The components of the Home Depot's supply chain
include an effective inventory management system which helps
in tracking the company's stocking, consumer demands, and
distributions in the store across its international and local
markets. The application of the online stores has helped the

company to improve its consumption accessibility to consumers
and revamping its stores. It also helps in the reduction and
management of physical spaces in its stores nationwide (Adobor
&McMullen, 2007). More importantly, there is the integrating
of information technology solutions which have increased
consumer checkout at stores, inventory-taking, customization
and consumer order processing. There is the generation of value
through the development of improved distribution networks in
the markets (The Home Depot, 2016). This has helped the
company to overcome challenges of lack of products in the
market, poor distribution and improving operational
effectiveness in terms of performance, allocation of orders and
distribution to suppliers.
Major Issues Affecting Structuring, Sourcing, Purchasing and
Supply Chain
There are different issues affecting structuring of the
company and this include issues such as leadership in the
contemporary organization of the company. The structure of the
Home Depot organization is affected by poor leadership culture
which does not help in the integration of its employees and
distribution of its resources (Ferguson, 2017). There is also
poor market research and trends which affects the ability of the
company to maintain its sales during low demand seasons such
as the 1st quarter of the year. Thirdly, there are differences in
supplier diversity policies which sometimes hinders the
development of a better sourcing platform for the company.
Combined with increased operational costs and rates affects the
company’s supply chains (Hill, Jones & Schilling, 2014). The
supply chain also needs a better platform to engage in
operational effectiveness such as increasing and improving the
effectiveness of the company towards maintaining a profitable
trend and a higher market share.

Solution
s
The potential solutions to overcome leadership in the
Home Depot is focusing on the organizational goals and making
the necessary decisions which focus on the organizational
values and operations. This will help in aligning the operations
of the company with its objectives, mission, and values. There
is also the aim of influencing market research to understand the
consumer trends especially through the online surveys and its
stores (Ferguson, 2017). It will help the company in
understanding the importance and resources for meeting
operational effectiveness. It is also important and essential to
use supplier diversity programs in meeting to improve and
increase operational effectiveness in terms of projecting,
financing and managing resources such as operational
effectiveness. Also, there is the need for investing in supply
chain developed through the integration of technological
solutions (Ferguson, 2017). This will ultimately increase costs,
but it is a logical solution to improve and focus on meeting and
allocation of resources through the attraction of potential
investors.

Total Quality Management Tool
There is the need of developing a cause and effect
diagram as a tool for focusing on quality and potential. There is
the need for focusing on the company's processes. The aim of
the processes is to fully understand, plan and fulfill the nature,
affiliations, and concern on different levels such as processing,
planning, budgeting, supply diversity and control on monitoring
its inventory. A cause and effect will help in determining the
necessary issues affecting its core operations (Makridakis,
Wheelwright, & Hyndman, 2008). It will also highlight wastage
in the company's supply chains. This will help in conversing to
meet the demands of the community, especially when
controlling the flow of inventory, customization of consumer
orders and determining the possible costs to reduce or increase
spending.
Just-in-Time Philosophy for Home Depot
Toyota was the first company to implement the just-in-
time inventory and production management philosophy. As a
philosophy, it helped in managing and increasing the necessary
processes such as increasing and processing the demands of
consumers. The allocation of the potential needs helps to

improve and increase operational effectiveness by reducing
wastages especially in the production, customization and
manufacturing products which exceeds consumer expectations.
There is the need for developing and planning to meet the
expectations of the community (Hill, Jones & Schilling, 2014).
It helps to overcome, raise and improve the necessary services,
plans and operational effectiveness in terms of reducing
inventory stocks and this will help to curb the differences in
operational costs and revenues generated. It will be a tool to
increase effectiveness and logical organizations of Home
Depot’s operations.
Impact of the Philosophy on Quality Assurance
Considering the benefits of the just-in-time philosophy
for Toyota and MacDonald's, Home Depot will ultimately focus
on the quality of products for home improvement and how the
allocation of the products will help steer the company's quality.
The philosophy will change the company's supply chain from
stocking and keep inventory to production based on demands
and orders. This is a focus on the general resources as obtained
and developed through effective planning (Hill, Jones &
Schilling, 2014). The culture of the company will also change
from diversity developed through quality in value and timely
development to order as available and customization. It will

increase quality and pricing while changing the pricing of the
company’s products to meet the value of the consumers in the
market.
Quantitative and Qualitative Forecasting Methods
Qualitative Method: Market Research
Quantitative Method: Life Cycle Modelling
· Conduct market research through conducting online surveys.
· Using the online systems, it is also possible to view consumer
reviews through feedback boxes in the stores.
· There is a positive way of conducting research through
increased customer purchasing trends in the community and
through department stores. (Makridakis, Wheelwright, &
Hyndman, 2008)
· Generation of feedback through giving back to the community
and focusing on the value generated by the company towards
increasing consumer value and satisfaction.
· Focusing on the introduction of the product in the market.
This will monitor the marketing strategies and rates the
effectiveness of the market in terms of consumers retained
(Makridakis, Wheelwright, & Hyndman, 2008).

· Through the growth of the products in the market, it will also
take the surveying and take into consideration the profitability
of the product in the community and its potential retention in
the market.
· The rates of sales and products will also help in motivating the
understanding of the sale rates.
Strengths
· Offers considerable insight into the company’s’ consumer
preferences.
· It is easily achievable and inexpensive since it does not
require skilled personnel.
Strengths
· It offers real-time information and facts on product
performance in the market (Makridakis, Wheelwright, &
Hyndman, 2008).
· It is easily determined by qualified and experienced personnel
in the community.
Weaknesses

· It does not relate to the real-time facts since surveys can be
hindered based on different seasons (Makridakis, Wheelwright,
& Hyndman, 2008).
· Also, a challenge in the performance and attributions of the
necessary products to meet the expectations of the market
research method.
Weaknesses
· It is expensive to develop and planning on a new product
which has not already met the growth and lifecycle of the
product.
· It will time to understand the real-time facts and processes as
pertained to sales.
References
Adobor, H., & McMullen, R. (2007). Supplier diversity and
supply chain management: A strategic approach. Business
Horizons, 50(3), 219-229.
Ferguson, E. (2017, February 3). Home Depot’s Vision
Statement & Mission Statement - Panmore Institute. Retrieved
from http://panmore.com/home-depot-vision-statement-mission-
statement

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic
management: theory: an integrated approach. Cengage Learning.
Makridakis, S., Wheelwright, S. C., & Hyndman, R. J.
(2008). Forecasting methods and applications. John wiley &
sons.
The Home Depot. (2016). The Home Depot | About Us.
Retrieved from https://corporate.homedepot.com/about
The Home Depot. (2016). The Home Depot 2016 annual report.
Retrieved from
http://ir.homedepot.com/~/media/Files/H/HomeDepot-
IR/reports-and-presentations/annual-reports/annual-report-
2016.pdf

Assignment 3 Vice President of Operations, part 3 Cary Grant.docx

Recommended

Recommended

More Related Content

Similar to Assignment 3 Vice President of Operations, part 3 Cary Grant.docx

Similar to Assignment 3 Vice President of Operations, part 3 Cary Grant.docx (20)

More from rock73

More from rock73 (20)

Recently uploaded

Recently uploaded (20)

Assignment 3 Vice President of Operations, part 3 Cary Grant.docx