The Home Depot’s stores in Mexico represent a small but growing footprint on an ever-expanding global map. As new locations open there at a rate of seven to 10 stores a year, demand for more efficient operations — as well as the stakes — increases.
The Home Depot Mexico banner began flying in 2001 with the Atlanta-based retailer’s acquisition of a Mexican home improvement chain. While the 100-plus stores operating in Mexico are only a small percentage of the chain’s overall global presence, Mexico is emerging as a fertile and important market for The Home Depot and the home improvement industry generally.
Primary competitor Lowe’s Companies opened its first store there in 2010, and currently has five stores in operation. Both companies view Mexico as a linchpin in the strategy for long-term growth.
José A. Del Angel, The Home Depot Mexico’s merchandising support senior manager at its store support center in Monterrey, characterizes the Mexican home improvement market as being fragmented and less mature than in the United States. Many smaller Mexican competitors focus on specific parts of the market, like lumber and building materials — similar to the United States in the late 1970s and early ’80s, when The Home Depot founders Bernie Marcus and Arthur Blank effectively remade the home improvement market.
The Home Depot Mexico has been expanding at an annual rate of about 10 percent, but that growth has brought some corporate growing pains. Some 100 workers are employed at each store, plus another 30-40 third-party workers per store, according to Del Angel. Stores are formatted as 54,000-, 66,000- and 77,000-sq.-ft. facilities, with more than 20,000 products in each store.
With a much larger operation to account for, it adopted a series of workforce management software tools to align major operations areas like human resources, merchandise auditing and employee and management communications. The company turned to Reflexis Systems, a vendor that provides workforce management/task execution solutions to retailers, and began deploying three Reflexis Systems tools — Time and Attendance, Task Manager and StoreWalk.
Time and Attendance gave the company better visibility into its workforce. Task Manager formalized the communications process to the stores from headquarters and the store support center; StoreWalk enhanced store merchandising and execution by focusing on best practices and standardization among stores.
“By implementing these solutions, we solved a number of challenges and it made operations at our stores more efficient,” says Jaime Gonzalez, The Home Depot Mexico’s in store services department head for merchandising.
The Time and Attendance solution was particularly beneficial. Gonzalez says it was very important for the company to be able to accurately track the billable hours of third-party employees at stores working as security guards, janitors or in merchandising services. Previously, The Home Depot Mexico had relied on handwritten logbooks for tracking time and attendance, which created errors and inefficiencies. It reports that the Time and Attendance application reduced absenteeism, tardiness and billable hours at its stores.
“We now have excellent visibility as to who is at each store every day and at any certain time,” Gonzalez says. “And if the people are not there we know we are not getting billed for hours that were not worked. The result is we’re getting better service and better coverage at our stores.”
Del Angel says Task Manager helped The Home Depot Mexico break dependence on e-mail as the primary form of communication. Store managers were constrained because they had to spend considerable time reading e-mails and independently determining priority tasks, he says.
Task Manager is designed to help retailers gain active control of stores across the corporate enterprise by streamlining operations via a single communication channel that also provides real-time feedback to ensure store-level tasks are accomplished. For uncompleted tasks, managers can quickly hone in on and correct areas of non-compliance.
“In the beginning it was very easy to just send out e-mails for memos to give instructions on the different duties to be performed at the stores,” Del Angel says. “As we grew, it became very hard to monitor the execution at the stores.”
The corporate office can now provide coordination with store managers for planning and communicating objectives in areas like introducing new merchandise, running promotions or conducting product recalls.
“There was no certainty that things would be executed on time or would reach all of the parties,” Del Angel says. “Now we believe we have a much better execution for communications. Through better execution, we know that we are getting better sales and better customer service. It is hard to pinpoint in terms of percentage of sales or additional transactions, but we know that it is there.”
The third peg for improving store operations is implementation of the Reflexis Systems’ StoreWalk application. StoreWalk, a module that allows managers to perform efficient in-store audits, arms retailers with a checklist of questions in an exception-based system that automatically triggers tasks to fix issues, particularly in merchandising.
Del Angel says StoreWalk positioned The Home Depot Mexico managers to view the operation of their stores in a more proactive manner as a means for directing improvements, and that improvements in store operations across the board are positioning the company for greater future growth.
“We have more customers coming into our stores every day,” he says. “We are going to smaller markets, and we are educating people so there is a lot more interest in do-it-yourself projects. They come into the stores not only to buy the products, but also to learn how to install products. It’s a changing culture that brings us additional growth.”