Home Depot 2015 Annual Report Download - page 8

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more predictable and consistent freight flow. As we continue to roll out Project Sync throughout our supply chain over the
next several years, we plan to create an end-to-end solution that benefits all participants in our supply chain, from our
suppliers to our transportation providers to our RDC and store associates to our customers.
Over the past several years, we have centralized our inventory planning and replenishment function and continuously
improved our forecasting and replenishment technology. This has helped us improve our product availability and our
inventory productivity at the same time. At the end of fiscal 2015, over 95% of our U.S. store products were ordered through
central inventory management.
In addition to our RDCs, at the end of fiscal 2015, we operated 34 bulk distribution centers, which handle products
distributed optimally on flat bed trucks, in the U.S. and Canada; 22 stocking distribution centers in the U.S., Canada and
Mexico; and ten specialty distribution centers, which include offshore consolidation and return logistics centers, in the U.S.
and Canada. We also utilize four U.S. transload facilities, operated by third parties near ocean ports, for our imported product.
These facilities allow us to improve our import logistics costs and inventory management by postponing final inventory
deployment decisions until product arrives at destination ports. We remain committed to leveraging our supply chain
capabilities to fully utilize and optimize our improved logistics network.
Interconnecting Retail. To support our online growth, in fiscal 2015 we opened the third of our three new direct fulfillment
centers ("DFCs"). We expect these facilities to enable us to reach 90% of our U.S. customers in two business days or less
with parcel shipping, which provides our customers with a balance of cost efficiency and speed in shipping online orders. For
non-parcel orders originating from our DFCs, we have fully implemented BOSS via RDC delivery to provide our customers
with a less expensive store pick-up alternative. With our acquisition of Interline, we have also added more than 90
distribution points with fast delivery of a broad assortment of MRO products.
In addition to the distribution and fulfillment centers described above, we leverage our almost 2,000 U.S. stores as a network
of convenient customer pick-up, return and delivery fulfillment locations. For customers who shop online and wish to pick-
up or return merchandise at our U.S. stores, we have fully implemented our BOPIS, BOSS and BORIS programs, which we
believe provide us with a competitive advantage. For customers who would like the option to have store-based orders
delivered directly to their home or job site, we pick, pack and ship orders to customers from our stores. We will continue our
roll out of BODFS during fiscal 2016, allowing online customers to select their preferred delivery date and time windows for
store-based deliveries. Our supply chain and logistics strategies will continue to be focused on providing our customers high
product availability with convenient and low cost fulfillment options.
Commitment to Sustainability and Environmentally Responsible Operations. The Home Depot focuses on sustainable
operations and is committed to conducting business in an environmentally responsible manner. This commitment impacts all
areas of our business, including energy usage, supply chain, store construction and maintenance, and, as noted above under
"Environmentally-Friendly Products and Programs", product selection and recycling programs for our customers.
In our 2015 Sustainability Report, available on our corporate website under "Corporate Responsibility > THD and the
Environment", we reported that we had significantly surpassed our energy and carbon reduction goals set in 2010 and
announced two new sustainability goals for 2020. Our 2010 goals were to reduce our kilowatt hours (kWh) per square foot in
our U.S. stores by 20% over 2004 levels and to reduce our supply chain carbon emissions by 20% over 2010 levels by 2015.
We estimate that we have reduced those levels by over 30% and over 35%, respectively, as of the end of fiscal 2015. From
2014 to 2015 alone, we reduced our kWh per square foot by approximately 3.6%. Our new 2020 sustainability commitments
are to reduce our U.S. stores’ energy use by 20% over 2010 levels and to produce and procure, on an annual basis,
135 megawatts of energy for our stores through renewable or alternate energy sources, such as wind, solar and fuel cell
technology. We are committed to implementing strict operational standards that establish energy efficient operations in all of
our U.S. facilities and continuing to invest in renewable energy. Our 2015 Sustainability Report also uses the Global
Reporting Initiative (GRI) framework for sustainability reporting.
Additionally, we implemented a rainwater reclamation project in our stores in 2010. As of the end of fiscal 2015, 145 of our
stores used reclamation tanks to collect rainwater and condensation from HVAC units and garden center roofs, which is in
turn used to water plants in our outside garden centers. We estimate our annual water savings from these units to be
approximately 500,000 gallons per store for total water savings of over 68 million gallons in fiscal 2015.
Our commitment to corporate sustainability has resulted in a number of environmental awards and recognitions. In 2015, we
received three significant awards from the U.S. Environmental Protection Agency ("EPA"). The ENERGY STAR® division
named us "Retail Partner of the Year – Sustained Excellence" for our overall excellence in energy efficiency, and we received
the 2015 WaterSense® Sustained Excellence Award for our overall excellence in water efficiency. We also received the EPA’s