DOLLAR GENERAL IMPROVES ALLOCATION

Christine Blank

GOODLETTSVILLE, Tenn. -- To develop a more targeted product allocation across its more than 6,000 stores, Dollar General here has adopted planning, assortment and analytical software, and is about to take the next step and employ a space planning system.

Previously, the discount chain, which sells such consumables as paper products, cleaning supplies, HBA, foods and snacks, along with toys and basic apparel, did not look at its products "beyond our 10 department levels," said Dana Lee, director of merchandise planning. "We knew we needed more merchandising support and better planning and analysis."

Dollar General switched from planning in Microsoft Excel to Arthur Planning software, from JDA Software Group, Scottsdale, Ariz. The chain also hired four planners, each assigned to one of the chain's four merchandising divisions: highly consumables, basic household, basic clothing and seasonal. "They are responsible for bottom-up plans for products and channel," Lee said. The planners also train buyers and assistants on JDA's analytical tool, Performance Analysis.

Lee said that next month, the chain will implement JDA's Intactix Knowledge Base system, which assists with planograms and floor planning.

Using the Arthur planning tool, planners channel stores into clusters, grouped by size, volume and similarly selling stockkeeping units. At a JDA Users conference in May, Lee showed a map of stores and classifications, demonstrating that stores in the same region are not necessarily grouped together. "We have a store in Florida that sells similarly to a store in Chicago," Lee said.

Classification of categories has increased significantly, which has led to better analysis and clustering. For example, laundry soap was expanded from one classification to two: liquid and dry. "They sell differently, depending on region," Lee said.

Before planning occurs, though, the software cleanses last year's data to develop an accurate pre-season forecast. "It's a powerful tool. It provides better data to start the planning cycle."

In addition to improving employee productivity, the new software has made planning much more accurate. "We have visibility of plan data at a lower level in our hierarchy than we did in the past, and data integrity. We were spending time at each meeting disagreeing on numbers," Lee said.

In the future, instead of just grouping stores together by similar sales, the chain will cluster stores based on how they sell SKUs within departments, Lee said.