Home Depot could ship those items from fulfillment centers directly to the stores where the orders are to be picked up, but that would involve costly parcel or LTL shipments, with no offsetting shipping fees from the customer. And Home Depot has trucks going from its RDCs with the cross docked inventories virtually every day, where these on-line orders could ride for free.

The answer, it turned out, was a sophisticated process in which those pick up in store orders are picked and if possible packed at the fulfillment centers, shipped in line haul trucks to the right RDC, then cross docked onto the truck heading to a particular store for the customer pick up.

That is according to Charlie Armstrong, a former Home Depot supply chain executive who recently left the company after more than seven years, where he was heavily involved in building out both the RDC and fulfillment networks for the company. Armstrong, a partner at Orion Advisors Group, made his comments at this week's MHI annual conference in Ponte Vedra Beach, Florida, during a panel discussion on omnichannel fulfillment.

Armstrong says the process works like this. On-line orders are picked at the fulfilment centers and directed to packing areas serving outbound doors with the linehaul trucks headed to the appropriate RDC. If the item can be packed in a traditional box, it is, but if not (say some type of large garden tool), it nonetheless receives a unique identifier bar code as with the boxed goods so that they can be tracked throughout the rest of the logistics process.

In addition, Armstrong says a simple but effective tool is used to identify these store pick up items – they are partially wrapped in colored tape that identifies them as being associated with this type of order.

The items are scanned as they are loaded into the truck trailer. Consider that each RDC serves about 100 retail stores, so that many ecommerce orders are likely to be loaded onto the linehaul truck. But Armstrong said that even if the trailer is only partially full, the relatively low cost linehaul move from the fulfillment center to the RDC will generally still be far less expensive then sending them direct to the store by parcel or LTL.

The RDCs have visibility into what trucks and what items are coming their way, and schedule the store deliveries considering this new type of inventory they previously did not have to plan for.

The trucks from the DC arrive, and the items unloaded. They are scanned again to confirm delivery to the RDC, and if conveyable may be placed on an RDC conveyor system and sent to the right outbound door, or manually moved to the door if non-conveyable (a few RDCs are also not yet automated).

The goods are of course then scanned on to the truck, with alert systems to notify RDC personnel if an item that is supposed to be on that truck headed for a store is not year scanned onto the trailer.

Armstrong said the store pick up items are not segregated on the truck headed to the store. Once ithe trailer arrives at the store and is unloaded, the colored tape tells receivers that they need to place those items in a special holding area of the backroom, where again they are scanned to confirm the receipt. Armstrong said processes are being developed at Home Depot to move these pick-up items to an area at the front of the store upon receipt.

So all told a pretty neat process to leverage both of Home Depot's networks to move goods to store for customer pick up that not only reduces transportation costs, but generally gets the product to the store faster than it would arrive if shipped parcel LTL from the fulfillment center, in a win for both Home Depot and its customers.

Seems like smart logistics to us.

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