Starting in 2019, Lowe’s began implementing new processes to their supply chain to improve efficiencies and cut costs. The article quoted this process to be at approximately $1.7 billion dollars. Because Lowe’s is switching more towards a market based distribution model, their inventories and fulfillments can be much more efficient and customizable. However, once COVID-19 hit, the demand for Lowe’s rapidly increased as everyone began to do at home projects and other projects that require Lowe’s materials. Given the nature of the pandemic, most of these sales were online as people were trying to stay home as much as possible. The article says that “online sales in Q4 2020 were up 121% YoY.” Because this spike in online sales was so fast, Lowe’s technology and fulfillment centers were a bit behind as this demand had never existed before. This led Lowe’s to launch their curbside pickup feature and pickup lockers at the beginning of 2020. In order for these in-person pick ups to become more efficient, Lowe’s also implemented geofencing technology that can track the customers store arrival, ultimately saving both Lowe’s and the customer time. The article states that in 2020, Lowe’s fulfilled 60% of online orders from stores. This has allowed for Lowe’s to fulfill orders 6 times faster than what they were doing a year ago (2019). Lowe’s also plans to open a distribution center in Southern California to help maximize efficiency with same day and next day delivery orders.
Lauren Palmer
References:
https://www.supplychaindive.com/news/lowes-order-fulfillment-supply-chain-ellison/ 595925/
