As one of the largest industrial distributors in North America, HD Supply oversees product inventories of more than one million SKUs. We continually strive to provide our customers the best experience with respect to product quality, availability, price, and delivery while ensuring a sound governance strategy. And, although we had confidence in our robust supplier governance and onboarding processes, as we grew our SKU count and supplier base, tracking began to get increasingly complex and emails more difficult to manage. The volume of paperwork began bogging down our processes. Our supply chain managers were inundated with emails and large file attachments which would quickly overwhelm internal systems. They were also spending considerable time and effort searching through multiple versions of spreadsheets to find the data they needed.
To resolve these issues, we focused our global supply chain management by adopting a more streamlined, automated and integrated approach to supplier onboarding and governance.
Our Supply Chain Governance Strategy
We researched and benchmarked workflow-based supplier governance systems that provided a single point of reference to manage and track all suppliers and associated SKUs. After evaluating proposals from five vendors, we selected the MetricStream Supplier Governance System because it provided the most flexibility and was able to be customized to meet some of our specific needs. Among its many features, users can quickly view crucial information about suppliers and factories, such as location, important contact information, qualifications and audit history. The system also automated our workflows such as selecting SKUs to be quoted, sending out quotes and comparing costs. All these features are critical to making the system easy to use and transparent to relevant internal customers.
Each time a new supplier goes through our approval process, HD Supply leverages a centralized framework to manage and track all factory assessments including but not necessarily limited to C-TPAT, quality audits, commercial risk audits, Environment, Health, and Safety (EHS) impact assessments and product testing. This integrated approach gives our supply chain managers a bird’s eye view regarding the entire supplier quality program. Product testers have also been trained to use the new system, and as soon as they enter their findings into the database, the system automatically alerts the next person in the work flow, our quality managers. The automated notification allows us to reduce cycle time to provide better service.
Regulatory certifications and standards like Department of Energy certifications and conflict minerals reporting requirements have been incorporated into SKU attributes and mapped to the relevant suppliers and factories. When a supply chain manager runs a report, he or she can quickly determine which SKUs have been certified and which ones haven’t.
When it comes to data entry, users can enter data directly into the supplier governance system or into spreadsheets which can then be uploaded into the system at once. They can also configure reports -- for example, we use color-coded spreadsheet rows to better understand factory audit schedules. Yellow rows indicate audits to be scheduled within the next 60 days and if a factory audit has not been completed on time, the row turns red to indicate past due. Supply chain managers can drill down to the SKU level to track the status of a product. They can also track supplier and factory issues, as well as areas where further supplier training is necessary.
Data security is critical to a great system. The MetricStream Governance System enables us to set security levels by function or user; therefore, if the management team wants to know about the status of supplier onboarding or testing, they can log into the supplier governance system to access the data. As for suppliers, they can interface through the same system, but will see only their results.
Conflict Minerals Governance and Customer Support
As part of our regulatory compliance tracking, we have launched an aggressive strategic plan for compliance with Section 1502 of the Dodd-Frank Act. Our supplier governance program has been expanded to conduct and manage Reasonable Country of Origin Inquiries (RCOIs) and due diligence processes to trace the presence and source of conflict minerals in our products. To provide our customers with the best service and value, we have committed to gathering the information for all our products – above and beyond those we are required to report to the SEC – as well as supplying timely reporting on conflict minerals for products sold to our customers. This holistic approach benefits customers because it means they will have less work researching products purchased through HD Supply.
HD Supply is committed to continually exploring ways and opportunities that allow us to not only meet but exceed our customers’ expectations in quality, social responsibility governance and regulatory compliance. The MetricStream System solution is a valuable tool because it allows us to easily monitor the improvements in these areas.
Susan Van Houten is the Sr. Director of Global Sourcing for HD Supply, Inc. She leads global sourcing, quality, and product regulatory compliance for HD Supply’s seven business units and one Canadian operation. Susan has more than 20 years experience in wholesale and retail operations with the majority of her time spent in Supply Chain Management. She has extensive knowledge of product life cycle management through her experiences in R&D, Logistics, Sourcing, Quality, and Retail Operations. Prior to HD Supply, Susan worked for The Home Depot, MTI Whirlpools, and Payless ShoeSource.
Sharon John is the Director of Supplier Quality for HD Supply, Inc. She leads a team of professionals responsible for quality assurance at both domestic and international factories producing goods for HD Supply. Sharon is an Engineering and Quality professional approaching 20 years of experience in Manufacturing, Quality Assurance, Sourcing and Six Sigma. She is currently responsible for ensuring the security and quality of HD Supply’s global supply chain. Sharon has also worked in various Engineering, Sourcing and Quality roles for General Electric and Entergy Corporation.