ZIFFPAGE TITLEChecking In, Kind Of

By Kim S. Nash  |  Posted 2004-07-01 Print this article Print

Dollar General opens two new stores every day. The secret isn't Miracle-Gro. Instead, there's a well-honed choreography of human muscle and precision logistics that sets up each new outlet in little more than a week. We take you inside what Dollar General

Day 3 - Checking In, Kind Of

  • Half of the store merchandise arrives

  • Shrink rates a problem

  • Is all the toilet paper there?

    The first of three truckloads of merchandise rolls in with 3,500 to 4,500 cartons of detergent, clothing, pet food and domestics such as sink mats and shelf paper.

    Koehn in Jersey Shore happens to have two other openers there. They were free at the time, so Corporate put them to work. The three speed the crew through unloading the boxes.

    They don't validate the contents of the cartons off the truck; they can't.

    While warehouse management software from Catalyst tracks inventory received and put away at distribution centers and goods packed into trucks bound for specific stores, the stores themselves lack any electronic means to monitor what comes through their loading bays.

    "We know roughly how many cases we're supposed to get," Anzor explains. While cases get counted, individual products do not. As a carton skips down metal rollers from the trailer to the store loading dock to the hands of a crew member, no one truly knows whether it contains all the Scott toilet paper (eight rolls for $5) or Rid A Bug insecticide ($3 per can) that a new store is supposed to get.

    "We take their word for it and just check to verify whether the seals have been tampered with," Anzor says.

    Dollar General's shrink rates—the percentage of sales written off to product theft and loss—have grown steadily since 1998, from 2.6% to 3.05% last year. The 2002 shrink rate of 3.5% was nearly twice the company's goal of 1.75% to 2%.

    A Loss Prevention application from NSB Group installed in 2002 to flag unusual cash register transactions hasn't seemed to make a dent. Corporate honchos routinely install video cameras at "watch stores" with high shrink, the lenses pointed at registers, the stockroom and the manager's office. Senior executives clearly believe employees are the risk.

    But some store managers say the big problem is check-in. Without scanners and software to check incoming goods, anything can happen to cartons after they're put on outbound trucks. And software that produces exception reports for activities at the registers does nothing to catch people stealing cases en route from the distribution center or shoppers stuffing Nutty Nougat candy bars into their pants.

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    Senior Writer
    Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.

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