By Kim S. Nash  |  Posted 2004-07-20 Print this article Print

Day 2 - A Midstream Shift

  • IBM cash registers arrive

  • More shelves to build, an office to outfit

  • "Little Debbie" on the wall

    With checkout counters finished on Day 1, a FedEx van arrives by noon with two to five Model 4694 point-of-sale terminals from IBM. Setters such as Rambus take charge of the machines, unpacking them and planting them on counters.

    The registers come loaded with a simple piece of command-line-driven sales-tracking software from Triversity in Toronto. A graphical application was voted down a few years ago partly because the Microsoft Windows operating system was deemed too slow and complicated to reboot after a power outage—a frequent problem for Dollar General in rural areas in the South and Midwest.

    The IBM machines are capable of e-mail but Dollar General doesnt use it. Instead, managers broadcast voice mail to employees on the companys private telecommunications system from Sprint.

    Today the crew organizes a stockroom for excess inventory that will inevitably accumulate as distribution centers truck goods—sometimes too many—out to stores every week. The room is usually in the back of the store, behind a wall of shelves full of laundry detergent (Arm & Hammer, $4; Tide with Bleach, $5). "Chemicals" are one of Dollar Generals biggest sellers.

    A managers office also takes shape. Hooks are screwed into the walls of Ethel Longways small office in Whitesboro to hold the 15 clipboards that will track employee contact information, store sales, cash deposit logs and the arrival of items as varied as sewing notions and Little Debbie snack cakes. Longways spartan gray-metal desk takes up most of the space.

    Dollar General operates top-down, with senior executives at headquarters controlling nearly every aspect of how field staff work. Planograms dictate how a store looks, and handbooks tell employees how to communicate. A monthly calendar mailed from Tennessee includes corporate phone numbers for everything from tracking the status of a bonus check to reporting an open safe. As one Pennsylvania clerk puts it, "Theres a department and a process for everything."

    Even so, plans deviate.

    The opening of a new store in Jersey Shore, Pa., is pressed ahead four weeks, from June to May, because the setter in this area, Mike Koehn, as well as district manager John Anzor are available.

    Never mind that local staff isnt yet hired.

    To help, Anzor drafts Valerie Hallstrom, a reliable manager he knows from another Dollar General store in nearby Williamsport. "John called me Saturday," Hallstrom says. " I need you, he tells me."

    While assistant managers fill in for her in Williamsport, Hallstrom spends her weekend hanging help-wanted signs and calling in an ad for the Sunday paper to recruit helpers for the opening. At 7:45 a.m. Monday, Hallstrom gets to the Jersey Shore store to find a dozen job seekers waiting. Eight hours later, she has hired 20 people to set up a store that isnt her responsibility.

    "Thats how it is," laughs Hallstrom, who has been with Dollar General for 15 years. "I know how to get these things done."

    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 dont validate the contents of the cartons off the truck; they cant.

    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 were 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 Generals 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 companys goal of 1.75% to 2%.

    A Loss Prevention application from NSB Group installed in 2002 to flag unusual cash register transactions hasnt 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 managers 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 theyre 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.

    Next Page: Goodlettsville to go.

    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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