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10/19/2021

Dollar Tree improves internal supply chain collaboration

Dan Berthiaume
Senior Editor, Technology
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Dollar Tree is focusing on demand forecasting and replenishment.

A leading discount retailer is enhancing supply chain-related communications between its stores and central planning teams.

Dollar Tree, Inc. is partnering with unified retail planning technology provider Relex Solutions to improve demand forecasting and replenishment processes across both its Dollar Tree and Family Dollar discount retail banners. Dollar Tree will implement the Relex solution across all of its 15,800 stores and 26 distribution centers in North America to improve collaboration between stores and corporate central planning personnel.

Dollar Tree is enhancing its internal supply chain operational efficiency as the retailer prepares to make some significant changes in how it prices and merchandises goods. The company is expanding its Dollar Tree Plus initiative, which adds multi-price merchandise that exceeds Dollar Tree’s $1 price point and is currently in place in abut 340 stores. It expects to have the assortment in place in 500 stores by year-end, expanding it to an additional 1,500 stores in fiscal 2022.

In March 2021, the retailer announced its newest store format, the combo store, which leverages the strengths of both banners under one roof.  The company currently has 105 combo stores operating and sees an opportunity for up to 3,000 combo stores in rural markets alone.  More than 85% of new Family Dollar locations in fiscal 2022 will be combo stores.

The company is also improving supply chain efficiency as supply chain disruptions are impacting its stock levels and cost of obtaining and moving goods. In reporting its second-quarter results, Dollar Tree amended the updated freight outlook it gave after its first quarter. The outlook had assumed that its regular ocean carriers would fulfill only 85% of their contractual commitments and also assumed higher spot market rates. However, the company now projects that its regular carriers will fulfill only 60-65% of their commitments.

“The decision to partner with Relex is a continuation of our journey to utilize data, analytics and automation to drive accuracy, efficiency, and effectiveness throughout our supply chain, resulting in better on-shelf availability and an improved shopping experience for customers,” said Alasdair James, executive VP, Dollar Tree Inc.

“Relex has proven to be more configurable than other solutions in its field, allowing our planners to have full visibility into, and control of, our supply chain,” said Andy Paisley, Dollar Tree CIO. “It also empowers us to innovate, try new ideas, and evolve our use of the solution over time to continuously meet changing business needs.”

“We’re excited to play a central role in Dollar Tree and Family Dollar’s mission to grow their business while providing high service levels and quality products to their customers at affordable prices,” said Frank Lord, chief revenue officer at Relex. “Relex has deep experience with the challenges specific to price-point retailers, and we look forward to sharing our expertise as we help them improve in-store availability while lowering inventory balances across their supply chain.”

Dollar Tree operated 15,865 stores across 48 states and five Canadian provinces as of July 31, 2021. Stores operate under the banners of Dollar Tree, Family Dollar and Dollar Tree Canada.