Home Depot Supplier Compliance & Dispute Process Explained

The Home Depot operates one of the most complex retail supply chains in the United States. With hundreds of distribution centers, fulfillment facilities, and retail stores, maintaining consistent product availability depends on strong supplier performance.

To manage this scale, The Home Depot enforces a structured Supplier Compliance Program supported by performance reporting tools and a formal dispute process.

What Is The Home Depot Supplier Compliance Program

The Home Depot Supplier Compliance Program defines the operational rules US Merchandising suppliers must follow when fulfilling purchase orders. These rules apply across Rapid Deployment Centres, Direct Fulfillment Centers, Direct to Store, and Dropship Direct to Customer programs.

The program has two primary objectives:

1. Increase in stock levels across stores and fulfilment centres.

2. Reduce variability and disruption in the supply chain.

Supplier performance is tracked monthly through the Supplier Performance Management tool in Supplier Hub. Performance is evaluated at the Merchandise Vendor (MVendor) level, while any resulting financial offsets are applied at the Payables Vendor (PVendor) level and deducted from future payments.

Suppliers who disagree with a violation or offset have the right to challenge it through The Home Depot’s formal Non-Compliance Dispute Process.

How Supplier Performance Is Measured and Evaluated

Supplier performance is tracked at the Merchandise Vendor level and evaluated separately for each fulfillment channel and facility. Performance is reviewed monthly using defined thresholds for each compliance metric. Financial offsets are applied at the Payables Vendor level and deducted from future payments.

Performance measurement focuses on:

• Consistency in order fulfillment.

• Accuracy of shipment and item data.

• Timeliness of shipping and delivery.

• Adherence to routing and transportation rules.

Key elements of performance evaluation include:

• Measurement by Merchandise Vendor number and by distribution center location

• Monthly reporting cadence with prior month results visible in the current fiscal month

• Offsets are assessed only when a supplier’s average monthly performance falls below the required threshold, not for isolated shipment errors.

• Financial offsets are calculated per metric and deducted at the Payables Vendor level.

Suppliers who believe a violation was applied incorrectly may challenge it through the compliance dispute process.

Key Compliance Metrics Suppliers Must Understand

The Home Depot evaluates suppliers across multiple fulfillment channels, including Rapid Deployment Centers, Direct Fulfillment Centers, Direct to Store, and Direct to Customer dropship programs.

The most important compliance metrics include:

1. Fill Rate Compliance

A purchase order is considered compliant only when all ordered units are shipped and received in full. Partial shipments reduce stock levels and may result in financial offsets if performance falls below the threshold.

2. On Time Shipping Performance

On-time shipping is measured differently depending on the shipment type.

• Collect shipments must ship on or before the purchase order ship by date, or correctly follow the Ready to Ship requirement.s

• Prepaid shipments must arrive at the Home Depot facility on or before the expected delivery date

3. Advanced Ship Notice Timeliness

Suppliers must transmit an accurate EDI 856 Advanced Ship Notice before trailer check-in. Late or missing ASNs disrupt receiving operations and negatively impact compliance scores.

4. Data Quality Compliance

Suppliers are responsible for maintaining accurate product data, images, specifications, and regulatory information in the Item Data Management system. Items that remain non-compliant beyond grace periods may generate recurring weekly offsets.

5. Routing and Transportation Compliance

Suppliers must follow parcel and LTL routing rules based on the ship method listed on the purchase order. Violations may include incorrect carrier usage, service level mismatches, or over maximum parcel shipments.

Financial offsets are assessed only when a supplier’s average monthly performance falls below the defined threshold for a metric.

Compliance Reporting Tools Used by The Home Depot

The Home Depot provides several tools through Supplier Hub to help suppliers monitor and manage compliance. Most tools require access approval from a designated Partner Guardian.

If tools are not visible in your Supplier Hub profile, contact your company's designated Partner Guardian. If your company does not have the tool enabled, the Partner Guardian can submit a request at thdsupport.homedepot.com.

How The Home Depot Compliance Dispute Process Works

The Home Depot offers a formal dispute process to ensure compliance offsets are applied fairly and accurately. Suppliers may dispute offsets they believe were issued in error or under qualifying circumstances.

Dispute Process Steps

1. Compliance violations appear in the Supplier Performance Management tool.

2. Suppliers review violations and submit disputes during the monthly dispute window.

3. Supporting documentation is uploaded for review.

4. Disputes are submitted only through the Supplier Performance Management tool.

5. The Home Depot compliance team evaluates disputes during the following fiscal month.

6. Decisions are issued as approved or denied with documented reason codes.

Impact of Dispute Decisions

When a dispute is approved, The Home Depot recalculates the supplier’s performance metrics:

• If revised performance meets or exceeds the threshold, the offset is fully removed.

• If performance improves but remains below the threshold, the offset is reduced.

Final offsets are applied to the supplier’s account after the dispute window closes and are deducted from the next payment cycle.

The Home Depot Compliance Dispute Timeline and Deadlines

Suppliers should reference the annual Home Depot Compliance Calendar available in Supplier Hub to confirm the exact opening and closing dates for each fiscal month's dispute window throughout the year.

The dispute process follows a strict monthly calendar. The following is a general example of how the timeline typically runs, though exact dates may vary by fiscal month:

1. Dispute window opens: The second Wednesday of the fiscal month.

2. Dispute submission deadline: The second Tuesday of the following month, by close of business.

3. Review period: Approximately one full fiscal month following the close of the dispute window.

4. Final settlement: Offset applied to the supplier's account after all approved adjustments are completed.

Disputes submitted after the deadline are automatically denied with no exceptions. Always refer to the official Home Depot Compliance Calendar in Supplier Hub for the confirmed dates applicable to each fiscal month.

The Home Depot Compliance Dispute Categories Explained

The dispute process applies to several compliance areas, each with its own methodology.

RDC, DFC, and DTS Disputes

Cover fill rate, on-time shipping, ASN timeliness, fluid receiving, and barcode reject rate violations.

Transportation Disputes

Include routing compliance and V Code vendor-driven delay charges.

• V Code disputes must be submitted within 48 business hours in Vendor PlanEx.

• Multi-stop shipments require a Carrier Missed Pickup support ticket within 48 hours.

US Dropship Disputes

• Overmax chargebacks are assessed quarterly by the sixth week of each fiscal quarter.

• LTL Routing Guide disputes may require submitting an exception request with documentation.

Data Quality Compliance Disputes

• Items must be resolved in IDM before disputes can be submitted.

• DQC disputes must be filed by the end of the fiscal month following the infraction.

• DQC disputes are submitted through the DQC Dispute Form, not the standard SPM workflow.

Best Practices for Submitting Successful Disputes

The Home Depot evaluates disputes against defined Dispute Matrices that specify valid reason codes and required documentation.

Suppliers improve approval rates by:

1. Monitoring the Supplier Performance Management tool regularly based on the monthly compliance cadence, with the prior month's performance visible in the current month.

2. Selecting the correct dispute reason code for each violation based on the applicable compliance area, ensuring all required documentation is included.

3. Submitting clear and concise supporting documentation through the SPM tool, with key details clearly identified.

4. Reviewing all Merchandise Vendor numbers associated with the Payables Vendor, as each MVendor is evaluated separately.

5. Communicating inventory constraints to Merchants, IPR analysts, and Procurement within 24 hours of PO receipt, with documented email communication.

6. Submitting disputes by the established monthly deadline, as late submissions are automatically denied.

Manage The Home Depot Compliance at Scale With iNymbus

Home Depot compliance disputes are rarely difficult because the rules are unclear. The challenge comes from volume, timing, and precision. As shipments increase across RDC, DFC, DTS, and Dropship channels, suppliers must track more violations, gather documentation, and meet tight submission windows across multiple systems.

When this work relies on spreadsheets, inboxes, and manual follow-ups, even well-run teams can fall behind. Missed deadlines, incomplete documentation, and delayed reconciliations often result in revenue that is never recovered.

iNymbus changes how compliance work is handled day to day by automating core steps such as monitoring compliance data, preparing dispute submissions, applying retailer-specific rules, and reconciling outcomes after decisions are issued.

The result is a process that is repeatable, auditable, and less dependent on individual effort.

Built with native support for Home Depot and more than 40 other major retailers, iNymbus enables teams to manage higher dispute volumes without increasing headcount or operational risk.

For suppliers focused on protecting margin while scaling their Home Depot business, iNymbus provides a practical way to maintain control and execute disputes with consistency.