1. Process Improvement at Home Depot
DMAIC
Phases of
Process Improvement at Home Depot
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
This presentation will attempt to understand and clarify the uses of various data, operation management and various statistical process controls within Home Depot. It will also discuss process improvements that are implemented in the company on everyday by both the new and existing employees. In addition, how the current and new operations will experience different procedures such as core competencies and, key performance indicators, operations management, productivity, strategy, and supply chain management functions will be presented. In efforts to support the research, several objectives and business goals will be addressed into many procedures and aspects.
At the end of this presentation DMAIC will disclose an iterative problem solving methods that will create a better outlook and understanding of operations and management of data and various process controls.

2. Define Problem Work Effort and Scope Customer Requirements
Duration of the existing Problem
Objective to prevent recurrence of the events cycle
Work Effort and Scope
Elimination of the problem
Know supplier input and customer process output
Determine competences and limitations
The process step structure of DMAIC, according to Media Tech Target (2011) consists of defining, measuring and analysis, improving, and controlling the assumption or hypothesis to discover the base of a problem in an organization and be able to aid in the formulation of solutions and alternatives. Through its core competencies, companies will be able to identify the direction that it must take. In spite of arguments for or against growth, there are anticipated benefits and inadvertent consequences in any organization operations. Media Tech Target (2011) notes that organizations must define the problem and the scope of work will be the effort of the project team.
Let us consider the positive result of defining. Defining is the first stage in the six sigma process. During the process improvement phase, define is an asset to strategic requirements that are used in determining direct problems in a business that are the outcome of a declining business, income, legalities and business channels.
The negative outcome of defining is intentionally creating problems to end the venture with series of limits that associate businesses on a rational and emotional level. Usually, the define process eradicates negative issues and creates positive results.
Home Depot
Home Depot customers complain about the small number of staff in Home Depot retail stores. This is because Home Depot staff, according to Microsoft (2011), cannot accommodate multiple customers, and there is a need to hire skilled sales people, improve store appearance, and devise better processes to solve home improvement problems.
The defining process recognizes the need to create a competitive setting as well as the need to create a global presence coupled with a business plan consisting of new business processes.

3. A New Vision Competitive Landscape
The key to success of Home Depot is its approach of treating its people well. Associates are encouraged by the company to express themselves and take the risk in development and leadership for advancement opportunities.
The corporate core values includes caring for the people, being a responsible citizen, being effective, and providing excellent customer service, increase value of shareholders, maintain respect, must have an entrepreneurial spirit, and must build robust relationships its stakeholders.
Home Depot’s supply chain is centered on facilitating “do-it-yourself” philosophy succeed.
Home Depot provides the products and training that permit its customers to undertake home improvement projects of any size. For Home Depot, building relationships with the clientele and providing them with excellent service results in increasing the company’s shareholder value.
Treating people right is a core value at Home Depot
Home Depot values its employee. It looks to its employees for ideas on how to advance operations and customer support. The training that is obtained by each employee allows them to do the best job possible. This is because the customer is the reason for our presence, hence, at Home Depot employees are dedicated in doing what ever it takes to please the customers.
Home Depot is an American merchant of home improvement and construction products and services. “Home Improvement Retailers” is the type of service discussed in this presentation.
The supply chain strategy offers methods for customers to integrate overall consumer friendly and usable strategies that allow customers learn “do it yourself” techniques in improving their homes. These moves will also provide higher level of service for customers.
The core value and vision of the company, according to The Home Depot Foundation (2010) include taking care of the people, giving back to the community, doing the right things, and providing excellent customer service. Also included are creating shareholders value, respect, maintaining an entrepreneurial spirit, and building strong relationships with customers, associates communities, and suppliers.

4. Creating a presence worldwide Business plan and results
Restructure contractor’s quote submission procedure
Once the initial bid has been submitted in-store with the aid of a Contractor Services associate, approved contractors will be able to requests for quotes (volume discounts) through the Internet with a secured log in in the future.
Enhance Imaging Solutions Software
Provide access of customers to the company’s Imaging Solutions software through the Internet, and hosted by the company website. New templates will be added to the software to take in other “do-it-yourself” Home Depot products.
Increase visibility of the Home Depot Foundation
Projects on community service that are sustained by The Home Depot employee and volunteers will be posted every month via a live web-cam feed. Also, a review of preceding Home Depot Foundation activities on the company’s website will be featured. The goal of this move is to inform the public regarding the community service activities that The Home Depot and its employees deliver.
Through the years, Home Depot’s business had changed, however, the supply chain remained the same. To eliminate the weaknesses generated by the obsolete supply chain, Home Depot shifted from a decentralized inventory distribution logistics model to a centralized one. In addition to revamping the inventory distribution model, Home Depot revised the supplier performance standards and generated an automated technique of providing instant as well as historical feedback of each supplier. According to The Home Depot Foundation (2010) changes in the company’s supply chain provided Home Depot a solid competitive edge.

5. Metrics Customer Service Levels Availability of Information Source
Flow chart material
Compute six sigma process
Source
Just in time (JIT)
Key performance indicators (KPI)
The second phase of the DMAIC process is called measure. Media Tech Target (2011) refers measure to the existing process or performance level. Measure is the feat to show development and reflect organizational objectives.  Measurements are taken in advance to validate proven considerations within an organization. As the goals of the organizations change, indicators like customer service levels, accurate forecast, and data on manufacturing cycle time is required. Monitoring tools or key performance indicators assess the performance of an organization’s supply chain. It also helps an organization delineate, accomplish and measure the progress of objectives in an organization.
The significance of service levels is to gauge customer’s satisfaction levels as well as how the organization takes action with regards to consumer expectations. Also, determining and quantifying the accuracy of forecast designs is important in decision-making and planning elements. This is because it creates changes into the systems and helps validate and update trends and cycle data. The manufacturing cycle time evaluation is another performance indicator that looks for a solution for time compression. It consists of benefits such as value equations. In general, the significance of the three performance indicators, according to Reh (2010) comprises of dynamism, increased customer service levels, accurate forecast, and manufacturing cycle time. These are complex models used in organizations supply chain performance in which each indicator relies on another indicators performance.
Customer Service Levels
Feedback to company perceptions
Sales, complaints, contracts, delivery information, and returned goods and services

6. Supply Chain Constraint
DIAGRAM
Service and Manufacturing Business Strategy
JIT- inventory plan
TQM- improvement
PR- rethink
Benchmarking- partners
Advantages
Disadvantages
Supply Chain Strategy
JIT- inconsistent
TQM- no commitment
PR- miss a step; revive
Benchmarking- errors
Supply Chain Objectives
Ethical
Concerns
Capacity Constraint
Physical
Capacity Constraint
Policy
Strategy Impact
The diagram addresses the following points:
If a responsive and efficient supply chain is present, what organizations have in the middle of the performance is a receptive spectrum.
Certain and uncertain demand suggests uncertainty or ambiguous spectrum.
There is always a decision to be made. Strategic fit and limitations will always make the difference in achieving success or failure in a firm’s supply chain system and approaches.
Operational Approach Used
Organization Quality
Customer Demands & Expectations

7. Flow Chart
Removal of the lines between the functional parts has improved real-time communication. It has also created a conducive environment wherein Home Depot associates can work together in improving customer service. In addition, revamping the inventory management functions in the firm has led to lead time reduction between order and delivery, hence, guaranteeing that the items will be available for the customer.
The Home Depot supply chain overview seems straightforward. However, through an exhaustive evaluation of the existing inefficiencies of the previous inventory system, Home Depot management took the plunge in making a change. The Home Depot Foundation (2010) confirms that even though an action was added to the new supply chain model, the redundant activities and inefficient processes that were present in the previous inventory model were abolished.

8. Statistical Process Chart
The following statistical process chart assists the enforcement of commitment from the entire organization across various aspects of the business. According to More Stream.com ( ), an operative SPC chart helps gauge the efforts as well as the numerous component of business functions while achieving the organizational objectives.

9. Analyze Brainstorm Methods for selection of problem causes
Measure or quantify the system
Factors for adjustment
Methods
for selection of problem causes
Gap step examination
Process proficiency
The third step in the DMAIC process discusses Analyze. Media Tech Target (2011) states that organizations must analyze present progress to separate the problem. This step generates an innovative leverage in a firm’s production processes, while productivity challenges are being considered. This greatly helps in decision making activities, particularly in building and buying solutions.
Analyzing business operations, especially its advantages and disadvantages, has its own challenges and rewards.
Bendorf (2004) lists some of the factors that the organization have to analyze. This includes cognizant personnel support, product selection, analysis, sourcing strategy, potential countries as suppliers, freight and import cost, export, shipping and import information, as well as information of contracts and processes that expand both potential business movement.
Moreover, services and products are managed by establishing and managing business relationships and following standard procedures in an environment where a business operates. Independent relations, skills, expertise and investments are established. Organizational pride and cultural barriers are less likely to exist in such work settings.
Christensen (2010) notes that the identification of cultural barriers can effect product and services. Instead of doing it across channels to preserve product and service spheres in a timely manner within the organization, the supply channels and new market niches and business models are created at the top of the organization within the organization.
Another factor is productivity which is intended to attract new markets, niches, and business models. Also, commercialization discovers logistics HR, production machinery, capital management, and customer management. Products and services are diversified where innovative product line is achieved through partner establishment.
Lastly, by concentrating influence, financial responsibilities are shared and more resources can be found in global external resources, hence, risk is reduced. Christensen (2010) adds that a wide range of sources is presented and no single organization has the answer to every problem. That is, intellectual property value is pooled through external connections beyond core competencies of organizations.

10. Ordering Cycle Purchasing or Procurement Cycle
Electronic Data Interchange
Distribution
Purchase Orders
Store Environment
Manufacturing Excellence
Customs Compliance
Transportation
The Home Depot’s procurement cycle comprises of electronic data interchange (EDI), information distribution, purchase order systems, store environment settings, manufacturing quality, customs compliance, and transportation restrictions. Failure to analyze these steps, the company would not be efficient in delivering what the clients need.
The first aspect of the cycle, the EDI system allows The Home Depot merchant to effectively collaborate with suppliers. Suppliers in turn are required to possess the necessary technical equipment to ensure continuous communication.
Knowledge distribution is the second aspect of the procurement cycle. It consists of product, packaging and shipping requirements defined by The Home Depot. By controlling how the products are received permits the company’s employees to focus on more important needs like inventory control and replenishing.
The third aspect is the purchase order which is indispensable in the procurement process. Without it, products and services cannot be received or paid for. The company requires that suppliers must have the proper knowledge of its policies. In addition, The Home Depot’s store settings and manufacturing superiority requirements is essential for safety and environmental concerns. Suppliers must also have a clear comprehension of the company’s expectations prior to the incorporation or support tools.
For international business to be successful customs compliance is crucial. Hence, The Home Depot must understand the requirements set forth by various agencies of foreign regions. The final key factor of The Home Depot’s procurement cycle is logistics. It is necessary for The Home Depot to know where and when product will be delivered as well as the probable gaps in the delivery process so that applicable resources can be made available. The Home Depot Foundation (2010) states that requirements for transportation acknowledgement are drawn by the company in the supplier toolbox. 10

11. Process Proficiency
Assign Logistics Department to be the circuit board
Streamline inventory management using order management
Improve the company’s supply chain functions
Know customer demands and trends
Change focus
Modify direction
Supplier relationship
Increase visibility
Home Depot’s domestic procurement strategy has evolved as the trend in the housing market and customers’ needs changed. The company did not gain profits from this segment of the market as the combining of design and product purchase approach failed. This is maybe because of the fact that the home products’ market is very competitive and the clientele will always search for the best price available. This fact left Home Depot with inventory specific to design on the stores shelves or floor.
A change in strategies was necessary so that the company can move away from the design-product aspect to a wider assortment of product availability. That is, the company must focus on the total scale of building, from the regular home owner to the commercial industrialist. The Home Depot Foundation (2010) confirms that The Home Depot has been realizing this by streamlining the supplier relationship and increasing visibility throughout the chain. In turn, this makes the ordering process much easier. This also offers leaner inventory levels, by linking the output of an in-control process while decreasing cycle times.

12. Improve Resolutions Test Plans / Tactics Timelines / Schedule
Interpret charts
Design solutions
The fourth step DMAIC process tackles about improve. Media Tech Target (2011) notes that organizations must improve the problem by deciding on the solution.

13. Target local demographic s
Know the customer
Fine-tune Strategy
Target local demographic s
Balance local and national purchasing
The corporate core values of Home Depot includes caring for the people, being a responsible citizen, being effective, and providing excellent customer service, increase value of shareholders, maintain respect, must have an entrepreneurial spirit, and must build robust relationships its stakeholders.
A company can fill every vacant shelf; however, if the products do not answer customer needs, there is a need for buying schemes to be reanalyzed. This mean that acquisition of inventory that is not suitable for the market is a great wastage of valuable assets. A product that is popular in New York may be wasting shelf space in a store in California. Home Depot has been fine tuning the purchasing strategies to be more market specific. This move reduce avoidable inventory and targets the local consumer. For retailers, the change in Home Depots buying patterns is tricky: there is a need to balance local demand with national efficiency. In the case of The Home Depot, the innovative, specific buying activities helped lower merchandise costs by lessening unsold goods (Microsoft, 2011). In essence, the goal of Home Depot is to have the necessary inventory needed by the stores in its respective demographic areas while upholding the national buying power for standard goods. With this the company can leverage bulk buying, while the local customer demand is taken care of. 13

14. Strategy Total Quality Management Six Sigma Waste Elimination
Cost Reduction
Information Systems
External and Internal Sourcing
Total Quality Management
Innovative Solutions
Strategy
Organizations in the current competitive business settings attempt to improve financial performance and realize sustainable competitive advantage through supply chain management and numerous strategies. Gaining competitive advantage is a tactic that can be accomplished by enhancing competences and reducing waste within the organization. That is, by unifying company assets and determining the production capacity and ability to deliver products and services, organizations can decide on the business’ future. As what Bendorf (2004) says, this specific process gives and organization an advantage to meet customer demands due to efficient supply chain management.
Sustainable competitive advantage is gained through improving competencies, quality, inventory management, and operations scheduling. These are some of the ways by which an organization can improve its edge and have a better financial performance. Also, by evaluating various internal operations of the supply chain, firms can locate prevailing deficiencies and can recognize the points that need improvement while reducing avoidable waste. In addition, utilizing a alert business approach, strategies like total quality management, recognized methods of waste elimination, cost reduction, and increased productivity will inevitably result in excellent customer service and satisfaction of the customers. Moreover, Bendorf (2004) stated that modifications in the proven quality control systems will increase the consistency in quality. This can be done by establishing standard quality control system in locations intended to exceed customer expectations.
Lastly, information flow can be enhanced by aligning information system technologies with system processes combined with the provision of accurate and timely information within the organization and throughout the supply chain. This is because sustainable competitive advantage and better financial performance are essential objectives that drive decision-making strategies in many businesses. In turn, aligned supply chain objectives with the business strategies and implementation of improvements in inventory management and quality control are some of the few tactics that businesses can exceed customer demands expectations while improving organizational business goals and objectives.

15. Control Document Update and Improve Record system results / outcomes
Summarize major learnings
Update and Improve
Monitor execution / implementation
Require training for new procedures
The fifth stage in the DMAIC process is control. Media Tech Target (2011) defines control as the enhanced process or product performance that ensures that the objectives are met. That is, solutions in solving the problems and concerns must be monitored to sustain the organization in the long run. Also, plan revisions and evaluation can keep the operation in tact.

16. Cause-and-effect Diagrams in Supply Management
Human Factors
Methods and
Design Factors
Insufficient
supervision
Poor training
New operator
Faulty parts design
Incorrect
manufacturing
process
Insufficient tools
Inappropriate speed
Meager
maintenance
Numerous suppliers
Incorrect specification
Disparity in acquired
components
According to Rockford Consulting Group, Ltd. (1999), the beginning of the supply chain management system begins with a series of events that transfers products, good and services via consumer orders or business partners, usage of raw materials, production of goods or services, and distribution of the goods that utilizes an information service network. The major concepts in the supply chain management functions include logistics components and drivers of change, information flow, location and transportation, and performance indicators. The cause and effects to error and progression depends on the design and mechanisms that put emphasis on training an maintenance.
To control the efforts in trends and purchasing procurement, Wisner, et. al. (2005) notes that forecasting of sales and demands, material handling and production and controlling, inventory management and distribution, and customer management keep an eye on an efficient coordination of planning decisions. Also, supply activities are updated as internal and external environments change.

17. Knowing Customers and Work Performance
External Customers
Domestic Customers
Novice Homeowners
Experienced Homeowners
Contractors
International Customers
Internal Customers
Support Core Competencies
MET
The Home Depot’s client base is extensive and includes both external and internal customers. External customers are the ones usually considered when describing a retail business like The Home Depot. Its external customers are domestic and international. The domestic customers range from novice homeowners to experienced contractors.
Some clienteles do not even own homes, but need materials for the rooms or apartment rented or are moving into. The Home Depot provides an collection of products and services that people could use at some point in their lives. New clients can profit from the experience and information of the friendly associates, while experienced homeowners can advance their skills through lessons and seminars held at their local Home Depot facility.
Contractors can use The Home Depot to acquire necessary products and equipment to let their own businesses thrive. Internal customers of the company depend on the expertise of suppliers to make sure needs are met so that daily contributions can continue. The Home Depot’s merchandising execution team (MET) and New Supplier Toolbox are tools necessary to realize success and can helps both internal and external clients and suppliers (The Home Depot Foundation, 2010).
The key to success of Home Depot is its approach of treating its people well. Associates are encouraged by the company to express themselves and take the risk in development and leadership for advancement opportunities. 17

18. Summary and Results
Media Tech Target (2011) says “DMAIC project is to improve PFQT—Productivity (how many), Financial
(how much money), Quality (how well), and Time (how fast)” (pg 25. para 5.).
Define- Big Y
Measure-Y = f(X); Big “Y” and
of Data little “Ys”
Analyze- Y = f(X); Big “Y”; little
requirements vs. “Ys” and the “Xs”
Improve- Y = f(X)
Control- Measurement system
Six sigma methods characterize DMAIC
Common measures are output, process, and inputs
Media Tech Target (2011) says that the relationship of these three key items namely, output, process, and inputs is described as an equation:
Y = f(x), which reads, “Y is a function of X.” The “Y” refers to the output(s); the “X” refers to the key measures from the process variables
(inputs and/or the process itself).
Media Tech Target (2011) also adds that the DMAIC project’s objective is to identify the critical Xs, which is the
root cause of the problem—and select their optimal level(s) to best drive which is the most sought after progress in the output performance. It is sometimes called the “Big Y.”

19. References: REFERENCE
Bendorf, R. (2004) Global Sourcing: What You Need to Know Retrieved from online wed address:
Christensen, T. (2010) How Does Outsourcing Affect the U.S. Economy Retrieved from online web address:
Media Tech Target (2011) Define Measure Analyze Improve Control (DMAIC) Retrieved from online web address:
Microsoft (2011) Home Depot CEO: Sorry we let you down Retrieved from online web address:
More Stream.com ( ) Statistical Process Control Retrieved from online web address:
Reh, J. (2010) Key Performance Indicators (KPI) retrieved from online web address
Rockford Consulting Group, Ltd. (1999) Supply Chain Management Retrieved from management.htm
The Home Depot Foundation (2010). What we do. Retrieved from
Wisner, J. G., Leong, K. G., & Tan, K. (2005). Principles of Supply Chain Management. Nasib, OH: Thomson/Southwestern.
All information has been acquired from the following authors listed above.
Thank you for tuning in and I hope all learned something from the presentation.