Expert, flexible training in the use of the most powerful scheduling software program in the world: Primavera P6 Professional Project Management by Oracle. Call today! (916) 779-4145
Primavera Scheduling

What Dollar General Tells Us About Planning

Those of you living in the United States are probably familiar with Dollar General stores. Mostly found in small towns, Dollar General stores sell a wide-variety of lower-priced items. But there is big money in this market. Dollar General currently has 14,000 stores pulling in $22 Billion a year. The CEO of Dollar General, John Vasos, received a lot of press recently on comments he made to the Wall Street Journal that caught my attention as well.

Most commentators seized upon Mr. Vasos’ comments that the U.S. economy was creating more of what they consider to be their core customer – someone making less than $40,000 a year. Dollar General is planning to build thousands of new stores and is moving into metropolitan areas that were not previously identified as their demographic (i.e. the arrive of a Dollar General store in some communities could be considered a backhanded compliment.)

There has certainly been a lot of debate in this country about the percentage of Americans who are unemployed or underemployed (working fewer hours than desired) and how to solve this problem. The disappearance of good paying manufacturing jobs has resulted in many individuals working somewhere else, but for a lot less money. The new job is also far less likely to offer a pension.

Dollar General and other similar “dollar” stores thrive by selling small quantities of items to lower-income households at prices they can afford. These households do not buy in bulk even though it would result in savings. Hence, they are more likely to run out of something and need a replacement quickly. I can buy a 32-pack of bottled water for about the price of three individual bottles at my favorite store so clearly buying in bulk makes a big difference.

But here is the quote by Mr. Vasos that really caught my attention. He was describing Dollar General’s typical customer:

“Doesn’t look at her pantry or her refrigerator and say, ‘You know, I’m going to be out of ketchup in the next few days. I’m going to order a few bottles.’ The core customer uses the last bit of ketchup at the table the night prior, and either on her way to work or on her way home picks up one bottle.”

In other words, the typical Dollar General customer is not a planner. They wait until they are out of something before they buy more. They overpay without thinking. This is not how we manage projects. We do not (CAN NOT) let ourselves run out of resources needed to complete a project. That would be an inexcusable delay. We figure out what we need and make sure sufficient quantities are on hand when it is needed.

The critical path of the project in particular is a difficult taskmaster. We must complete the amount of work we planned each and every work day. It is not good enough to complete tasks totaling 19 days during a 20-day work period. That puts us one day behind schedule. The critical path keeps us honest. I see a lot of arguments at the end of the month when the final tally is taken. “But we did so much work this month”, they will invariably say. “Not enough”, I will reply.

It takes a different mentality to be a planner. We have deadlines based on expectations of quality and scope of work. A bad plan leaves us uncertain as to where we should be at any given time. Every day is a deadline of sorts, because what we did not finish today becomes something else that must happen tomorrow. Granted, we have some leeway with non-critical activities but a recurring problem that I see on many projects is that the amount of float on a secondary task is exaggerated, thereby diminishing its importance. We reap what we schedule.

Planning is all about opportunity. We have many options during the planning stage. Some options are more attractive or feasible, and hopefully the least-expensive option generates the best result. But it can certainly be more complicated than that. The California Department of Transportation (Caltrans) utilizes an “A + B” approach on larger projects: each bidder must specify a contract duration and a price. Both numbers are considered when awarding projects. Caltrans’ experience is that A + B bids result in lower prices and fewer road usage delays.

The longer we wait to make decisions the fewer options that remain. Projects finish on time because we monitor our progress on a regular basis and implement mitigation strategies whenever slippage does occur. We do not use up float for bad reasons but rather to give ourselves flexibility. We do not allow ourselves to run out of ketchup.