DMAIC

Phases of Process Improvement at

Home Depot

1. Define2. Measure3. Analyze4. Improve5. Control

Define

Problem

• 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

A New VisionCompetitive Landscape

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.

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.

Creating a presence worldwideBusiness plan and results

Metrics

Availability of Information

• Flow chart material

• Compute six sigma process

Source

• Just in time (JIT)

• Key performance indicators (KPI)

Customer Service Levels• Feedback to company perceptions

• Sales, complaints, contracts, delivery information, and returned goods and services

Service and Manufacturing Business Strategy

Supply Chain Strategy

Supply Chain Objectives

Customer Demands & Expectations Organization QualityOperational Approach Used

• JIT- inventory plan• TQM- improvement• PR- rethink• Benchmarking- partners

Advantages

• JIT- inconsistent• TQM- no commitment• PR- miss a step; revive• Benchmarking- errors

Disadvantages

EthicalConcerns

Capacity Constraint Physical

Strategy Impact

Capacity Constraint Policy

SUPPLY CHAIN CONSTRAINT

DIAGRAM

Flow Chart

Statistical Process Chart

Analyze

Brainstorm

• Measure or quantify the system

• Factors for adjustment

Methods for selection of problem causes

• Gap step examination

• Process proficiency

Purchasing or Procurement Cycle

Ordering Cycle

Electronic Data Interchange

Distribution

Purchase Orders

Store Environment

Manufacturing Excellence

Customs Compliance

Transportation

• Know customer demands and trends

• Change focus• Modify direction• Supplier

relationship• Increase

visibility

• Assign Logistics Department to be the circuit board

• Streamline inventory management using order management

• Improve the company’s supply chain functions

Process Proficiency

Improve

Resolutions

• Plans / Tactics

• Timelines / Schedule

Test

• Interpret charts

• Design solutions

•Know the customer

•Fine-tune Strategy

•Target local demographi

cs

•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.

Total Quality Management Innovative SolutionsStrategy

Six Sigma Waste Elimination

Cost Reduction Information Systems External and Internal

Sourcing

Control

Document

• Record system results / outcomes

• Summarize major learnings

Update and Improve

• Monitor execution / implementation

• Require training for new procedures

Cause-and-effect Diagrams in Supply Management

Methods andDesign Factors

Human Factors

Numerous suppliersIncorrect specification

Disparity in acquiredcomponents

Faulty parts designIncorrect

manufacturingprocess

Insufficient tools

Inappropriate speed

Meagermaintenance

Insufficientsupervision

Poor trainingNew operator

• External Customers• Domestic Customers

• Novice Homeowners• Experienced Homeowners

• Contractors• International Customers

• Internal Customers• Support Core Competencies

• MET

Knowing Customers and Work Performance

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.

SUMMARY AND RESULTS

References:

REFERENCE Bendorf, R. (2004) Global Sourcing: What You Need to Know Retrieved from online wed address:

http://www.ism.ws/files/Pubs/Proceedings/CKBendorf.pdf

Christensen, T. (2010) How Does Outsourcing Affect the U.S. Economy Retrieved from online web address: http://www.wisegeek.com/how-does-outsourcing-affect-the-us-economy.htm

Media Tech Target (2011) Define Measure Analyze Improve Control (DMAIC) Retrieved from online web address: http://media.techtarget.com/searchSoftwareQuality/downloads/ect01TreasurechestSixSigma.pdf

Microsoft (2011) Home Depot CEO: Sorry we let you down Retrieved from online web address: http://articles.moneycentral.msn.com/Investing/Extra/HomeDepotCEOWeLetYouDown.aspx

More Stream.com (2000-2011) Statistical Process Control Retrieved from online web address: http://www.moresteam.com/toolbox/t402.cfm

Reh, J. (2010) Key Performance Indicators (KPI) retrieved from online web address http://management.about.com/cs/generalmanagement/a/keyperfindic.htm

Rockford Consulting Group, Ltd. (1999) Supply Chain Management Retrieved from http://rockfordconsulting.com/supply-chain-management.htm

The Home Depot Foundation (2010). What we do. Retrieved from http://www.homedepotfoundation.org/what-we-do.html

Wisner, J. G., Leong, K. G., & Tan, K. (2005). Principles of Supply Chain Management. Nasib, OH: Thomson/Southwestern.