Dollar General: Supply Chain Challenges

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Earlier, you mentioned struggles with the supply chain, and I would say the solution you described aligns with what you've been discussing. Could you provide more details about the supply chain struggles you've observed?

A significant problem was the overbuying of inventory, which continued after Covid subsided. They didn't properly allocate the necessary space for that inventory, leading to overstuffed warehouses. This issue was compounded by the software not working at the hubs, causing overflow into trailer yards. There were about 10,000 trailers of excess inventory, which created cash flow problems and operational issues. It was difficult to access the needed inventory because the contents and locations of the trailers were unclear.

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Earlier, you mentioned struggles with the supply chain, and I would say the solution you described aligns with what you've been discussing. Could you provide more details about the supply chain struggles you've observed?

They ended up renting multiple off-site storage facilities, which is public information. They had around 14 or so off-site storage facilities, ranging from 50,000 to 500,000 square feet, and in some cases, even a million square feet, just to hold the excess inventory and get it out of the trailers. This created another set of problems as they tried to manage a vast amount of inventory they couldn't access. That's problem number two.

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Earlier, you mentioned struggles with the supply chain, and I would say the solution you described aligns with what you've been discussing. Could you provide more details about the supply chain struggles you've observed?

Problem number three is that the warehouses weren't designed for the additional number of products they tried to process with their non-core rotational home goods inventory. This effort aimed to compete with companies like Five Below, TJ Maxx, and HomeGoods. The warehouses, which are primarily manual, have a fixed number of spots for unique products to pick and send to stores. Overwhelming this system requires extra moves each day, which creates logistical challenges.

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