Make Your Suppliers Feel at Home

[From iSource Business, May 2001] How do you get 700 new suppliers of all sizes and shapes integrated into your automated supply chain as quickly and as seamlessly as possible?

No, wait. That's too easy. How about tackling this project during a major corporate reorganization, which is capped by new product lines and a new name? Given the circumstances, this project may seem daunting, but HomeBase thinks it has what it takes to tackle supply chain integration and, ultimately, turn a profit by the fourth quarter of the 2002 fiscal year.

In September 2000, the Irvine, Calif.-based home improvement giant (which is one of the West Coast's largest, with 10,000 employees, $1.5 billion in annual sales and 89 stores in 10 states) began its experimentation with the House2Home concept. It converted five existing stores in Southern California and Las Vegas to the new moniker, focusing on decorating rather than improvement.

The theory behind the shift is that the home decorating business is less dependent on fluctuations in the housing market than the home improvement business. Furthermore, the new stores feature flexible formats, so departments are better able to expand or shrink in size, according to fluctuations in consumer preference.

This new, flexible corporate mentality also necessitates tighter B2B linkages with supply chain partners; and Glen Hamilton, manager of the company's quick response, logistics and replenishment department, is in a unique position to help shape these vital linkages.

With well over 1,000 suppliers, more than $1 billion in expenditures last year and 500,000 purchase orders (POs) processed annually, Hamilton says the company is ripe for cost savings and improved efficiencies through procurement and supply chain initiatives.

The company's e-commerce application provider, IPNet Solutions of Newport Beach, Calif., plans to help the new House2Home step by step. By year-end, expect to see another 66 store conversions, as well as 22 store closures.

Behind the scenes, Hamilton and IPNet hope to achieve 100 percent trading-partner participation. The challenge: Each partner must be seamlessly connected, using as little technology as possible.

Up Close and Personal

Thus far, IPNet has helped hundreds of suppliers connect to HomeBase via three staggered methods that are based on supplier size and resources. Its eBizness Suite, an Internet-based solution, features: