Home Depot is using its first dedicated flatbed distribution center in Dallas to deliver construction materials directly to customers, part of a plan to serve 40 major markets with the format. Its January 28, 2020 account describes loads of concrete, lumber and drywall rather than ordinary parcels. This was not an opening-day announcement: supply-chain chief Mark Holifield had told the company's public investor conference on December 11 that the Dallas center was already running. [S1][S2][S3]

The format changes what Home Depot can stock, as well as where an order comes from. At that December conference, chief executive Craig Menear said many stores lacked room for products such as 20-foot lumber. Flatbed centers would allow the company to extend its assortment beyond those space limits and deliver the goods to customers. For contractors, that could widen the choice of materials beyond the local store’s stock. Menear was describing the format’s capabilities, rather than giving an inventory list for Dallas. [S2]

The delivery plan also reaches back toward the supplier. Holifield said most flatbed centers would be combined with bulk distribution centers that already supplied stores with lumber and building materials. Home Depot intended to take more control of inbound rail and truck movements, an area he said it had previously left to vendors. Putting customer delivery beside store-replenishment facilities would connect the incoming materials to both destinations. [S2]

Home Depot also wanted to change the work left to stores. Chief financial officer Richard McPhail told the December conference that moving deliveries from stores into the new network was intended to simplify store operations. That describes a transfer of delivery activity, not its elimination. His account did not measure the effect on employee hours or establish that workers would have shorter shifts. [S2]

The scale figures refer to different parts of the expansion. Home Depot's January account places flatbed centers inside a $1.2 billion program to build approximately 150 facilities of several types, aiming to reach 90 percent of U.S. customers with same-day and next-day delivery. That is a national program budget, not the cost of the Dallas building. Holifield said the company expected 40 flatbed centers in the 40 largest markets. Those were planned locations, not 40 operating hubs, and the broader reach target did not establish fast bulky-goods delivery at every address. The January account gives no Dallas order cutoff, delivery tariff or address-level service list. [S1]

Source documents

  1. Supply Chain Unveils First Flatbed Distribution Center (FDC)https://corporate.homedepot.com/news/company/supply-chain-unveils-first-flatbed-distribution-center-fdc
  2. 2019 Home Depot Investor & Analyst Conference — December 11, 2019 transcripthttps://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2019/2019%20IAC/2019%20Investor%20Conference%20Transcript_vf.pdf
  3. The Home Depot to Provide Update on Transformational One Home Depot Investment Strategy to Extend Market Leadershiphttps://ir.homedepot.com/news-releases/2019/12-11-2019-110001607