Process Innovation, Going Paperless

The Home Depot Mexico

8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure 11. Sustainable Cities and Communities 12. Responsible Consumption and Production

Overview

This story is about how The Home Depot Mexico works with their stores to iteratively improve processes that drive its customer service. The company is very aligned with sustainable goals so when a process improvement can help the environment, they are pushed to the top of the priority, in this case, the store associates had been wanting Paperless Stores, in order to have a better working environment, when this proved to be a sustainable effort, it was fast-tracked and implemented through all the stores.

Authors

Fernando Villagomez

Fernando Villagomez

Francisco Fernandez

Francisco Fernandez

Fernando Albo

Fernando Albo

Fernando Cepeda

Fernando Cepeda

School

EGADE Business School Tecnologico de Monterrey

EGADE Business School Tecnologico de Monterrey

Professor

Ezequiel Reficco

Ezequiel Reficco

Innovation

What:

• Business process reengineering to have better customer service through better processes, that leads to cost and labor savings.

• The innovation, in this case, was a complete process revamp, to remove the paper from the most wasteful process in the store.

How:

• Through VOA (voice of associate) interviews with store associates.

Who:

• The operations team led by Mr. Valdez, they gather feedback from stores and seek feasible improvements, they are dedicated to process improvement.

• The company’s IT team, to seek technological solutions to eliminate analog procedures.

• The Finances team, since they used to audit the printed papers and their safekeeping.

• Asset Protection team, as they also used the printed papers for their process.

• Store associates and Field Training, to promote the new process.


Process Innovation, Going Paperless

Inspiration

How:

• A Store Associate brought it up through the VOA interview, then it was molded by the Operations team in the Store Support Center in Mexico.

• The main idea was seen as simple at first, with no clear benefit, but after the CSR team got involved and saw the potential green effects of avoiding paper usage, printing, storage, and removal the project got a lot of attention.

What:

• Getting a better process was the main purpose, as the old “paper-full” project took too many steps, and required a lot of side processes to handle the paper.

• Cost savings was also a big motivator, as was the positive impact on the environment, the company has a yearly goal to reduce carbon emissions.


Overall impact

• A new process rolled out to all the stores, training to almost 10,000 employees to phase out not only the paper but also the side processes that required it.

• As a customer in Mexico, you spend less time inside the store.

• They have less waste and less paper usage in the company, which helps the communities on which they work.

• Less paper used for processes that don’t require it, even if it is recyclable, THD Mexico reduced the in-store paper use and printing by 90%, so it is a very positive impact on the environment by itself, and if more companies start doing this with their processes the impact can be increased.

• Short term:

• Shorter sale time for our customers.

• Retraining of all store associates for the new process.

• Reduction of 90% paper usage in stores.

• Better P&L for the store.

• Long term:

• This project had paid for itself in 4 months, so the company is looking for ways of improving more processes that cause cost reduction and that will reduce its footprint.


Business benefit

Around 1 million dollars saved every year, mostly from paper cost reduction but also from labor reduction.

The company stopped buying paper, in a ratio of 90% less for each store, this also translated to less ink for printers needed, and fewer printers per store needed.
Another benefit is the “dead file” process, they had some audit controls that were very hard to maintain with analog paper that can get damaged, now everything is digital so it helped the company in that area as well.
In the long term, the store will be able to shift many of its points of contact with the customer, it used to be anchored around places near printers, now it is shifting more mobile.


Social and environmental benefit

The main environmental benefit comes from the complete obliteration of paper waste in the process, what little paper is still used is also being sought to be removed by subsequent projects. This is part of the company’s goal to reduce carbon emissions, by eliminating paper they save time, they save paper costs both direct and indirect and they reduce each Store’s waste (paper, ink, cardboard boxes, paper clips, etc.)

Interview

Alejandro Valdez, Operations Sr. Manager

Photo of interviewee

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The Home Depot Mexico

The Home Depot Mexico

San Pedro Garza Garcia, Nuevo Leon, MX

Business Website: www.homedepot.com.mx

Year Founded: 2004

Number of Employees: 10000+

The Home Depot, Mexico Division is the leader in Home Improvement Retail in Mexico, with over 100 stores located in all of the countries’ states, it operates as a Division of the USA based retail giant. In Mexico, The Home Depot seeks to fulfill customer needs in house improvement projects, as well as seeking business to business partners, some as big as government agencies, and public and private schools to help them maintain their physical infrastructure in top condition.