JOC Staff | Sep 23, 2011 9:59AM EDT
Home Depot, reaping new benefits from its massive, multi-year supply chain overhaul, will use Fidelitone for parts and distribution services under a new contract between the third-party logistics provider and the retailer.
The agreement comes as Home Depot completes a renovation of its U.S. supply chain that includes the rollout of a series of high-throughput distribution centers it calls Rapid Deployment Centers and a new warehousing and transportation management system.
Moody’s recently cited the supply chain effort in raising its ratings on Home Depot’s debt. "Home Depot's significant improvement in its in-store shopping experience and supply chain will continue to benefit its earnings," said Moody’s analyst Maggie Taylor.
The company last month reported a 14.3 percent gain in net income in the fiscal quarter ending July 31 that came on a 4.2 percent increase in sales to $20.2 billion. But the value of the inventory on Home Depot’s balance sheet actually declined slightly in the quarter compared to the same period a year ago.
“Our supply chain efforts are delivering significant benefits to the business as we leverage supply chain expenses even in the face of increasing fuel costs,” Home Depot Chairman and CEO Frank Blake said in a recent conference call with investment analysts. “We have more opportunities to pursue, particularly in optimizing our supply chain with a flow of international product, and we are beginning the process of optimizing our supply chain in Canada as well.”
Fidelitone, based in Wauconda, Ill., will support the home improvement retailer’s effort with order processing and fulfillment “for their various needs across the enterprise,” the logistics provider said.
