Analyzing Dollarama's Supply Chain and Inventory Management Strategies

This report provides an overview of Dollarama's supply chain management. It details the company's inventory management practices, including warehouse operations and demand forecasting, emphasizing its strategies for managing a large number of stores. The report highlights the importance of inventory control, the role of third-party carriers, and the use of distribution centers. It also covers the company's technological adaptations, such as surveillance cameras and payment systems, while identifying areas for improvement in customer service and inventory access through technology. Furthermore, the report mentions the financial performance analysis using GAAP and the sales peak during holidays and festivals, along with the customer service initiatives like the 24-hour helpline, and also the lack of return and exchange policies. The analysis also provides insights into the company's expansion strategies and market positioning.

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Supply Chain Management

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The report gives an overview of supply chain management of Dollarama Manya.Various types of
techniques are used by the company to manage its inventory and satisfy its customers.
The main aspect of inventory management at Dollarama is that they deliver the goods into a
receiving area i.e. warehouse and then they count them. Then the product is moved to different
areas in accordance with the demands. Every Dollarama store has different inventory because
each and every store has a demand for different items. The one and only drawback of inventory
management at Dollarama is that the inventory for one location cannot be accessed by the other
store.
One of the ways in which Dollarama forecasts its demands is by analyzing the different areas of
operation and market demands in respect to those locations. The highest number of Dollarama
stores is with Ontario which is 449 in number. As the imported products are expensive therefore,
the company also analyses the demand for imported goods in respect to the neighborhoods
purchasing behaviors. With the help of this strategy, Dollarama deduces the stores and is able to
emphasize more on stocking well known branded items and hence it focus on the demographics
of the areas. Dollarama mostly buys its products from importers in a huge bulk to maintain their
low price and profit margin.
The performance is measured by the sale and demands and how Dollarama is doing at the store
levels. A report named as Z report is prepared at the end of sales of each day which includes the
total sales of products and then at the end of the month it is calculated with the average sales of
the month. Sales are at the peak at the time of holidays and festivals. Therefore, they prepare
themselves to boost their sales during holidays so that the customers’ demands meet with the
supply. Along with this, GAAP is calculated to analyses the financial performance and according
to that the annual budgets are prepared.
Dollarama relies extensively on third party carriers for acquiring goods from their suppliers
overseas. Dollarama has one distribution center and 7 warehouses of which 5 are owned by
entities under corporation’s executive chairman Larry Rose which are subject to lease
agreements expiring on November, 2024.The newest warehouse costing $67.9 million is situated

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in Montreal, Quebec covering an area of 500,000sq ft., and this warehouse has increased the
storage capacity by 40%.
Dollarama have a 24 hour helpline and online portal on their website so that the customers can
file their complaints. There is no return or exchange policies therefore it has a negative impact on
the customer services provided.
Few of the technology adaptations by the company are: 24 hour surveillance cameras, acceptance
of all types of payment cards, better hand scanners but still Dollarama has not yet met the
technology standards. One technological fact that would help improve both customer service and
inventory would be the availability of a software that would help one store access the inventory
information about all other stores in that area.
With these strategies of inventory management, Dollarama will easily capture the market around
the globe.

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References
Dollarama Inc. (2017). Annual Information Form. Retrieved 11 January 2018, from
http://www.dollarama.com/wp-content/uploads/2017/04/2017-Annual-Information-Form-
vFinal-EN.pdf.
Dollarama Inc. (2015). Fourth Quarter MDA. Retrieved 11 January 2018, from
http://www.dollarama.com/wp-content/uploads/2015/03/Fourth-Quarter-MDA.pdf.