Supply Chain Management of Lowe's Home Improvement Stores - Research Paper Example

In recent times, business and technological trends have restructured the performance requirements for distribution channels in many industries. New challenges crop up every day for instance higher service level expectations of retail customers due to their high level of sophistication, distribution outsourcing by manufacturers, and the proliferation of advanced information technologies (Coyle et al, 2009). Distributors face a multiplicity of challenges in curbing the immense box retailers’ rigid supply requirements to support their high volume, high variety sales strategy.

These strategies are required in delivery; Scheduled deliveries whereby each store requires periodic normally weekly deliveries on the same day and time each week. Unconstrained order quantities where stores can order items in any desired quantities, without limits on minimum or maximum order sizes in that orders can be placed as late as the day before a scheduled delivery. Single consolidated delivery where orders placed before each scheduled delivery must be fully delivered on a single truck, unless the magnitude of the order exceeds a full truckload.

Stores need single, programmed deliveries because of the bottlenecks they encounter at their unloading docks. Since stores stock a wide range of products supplied by several manufacturers and since they need frequent deliveries in small batch sizes to reduce inventories, their loading docks are excessively congested and as a consequent, they call for a well coordinated deliveries from suppliers. A case study of Lowe’s Home Improvement Stores Lowe’s is a U.S based retail chain which deals with making improvements on retail home and appliances stores, with a market base of over 14 million customers, 1,710 from U.

S and 20 from Canada stores. It expansion continued into countries such as Mexico, Australia amongst others. The expansion strategy which was laid down made it to become the second largest hardware chain store in the U.S after the well known Home Depot and ahead of Menards (Baker and Powell, 2005). Home depot opened its first store in Atlanta in 1978 before expanding from Georgia into Florida and then into the rest of the United States. Home Depot was framed around the concept of the ‘built from scratch’ warehouse and it was quickly embraced by professional contractors as well as by the rapidly expanding do it yourself market.

The Home Depot concept was so successful that the traditional hardware and building supply stores were quickly eliminated from the markets in which the firm opened its outlets. Lowe’s began changing its strategy in a bid to counter Home Depot’s in the early 1990s, in that it converted most of its retail centers into a similar warehouse format. However, Lowe’s refined the Home Depot model by shifting from the rugged contractor appearance, tilting its focus to the female population based on research that concluded most home improvement decisions are initiated by females.

Consequently, it developed better looking stores with sophisticated products while still managing to maintain similarly low prices and high levels of inventory and selection. It designed its stores with less rugged looking upholstery (Amason, 2010). Supply management work plan strategy Hawawini and Viallet (2002), argues that responsiveness is the best way to differentiate among competitors in the current market. In this day and age, the consumer has the overall authority since he has absolute information.

This makes