MAP Financial Planning Implementation/ REI. Tom Kimmet and Kelly Hasty

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1 [ MAP Financial Planning Implementation/ REI Tom Kimmet and Kelly Hasty

2 [ Learning Points Successful implementation of the MAP Financial Planning tool Benefits seen in using SAP MAP Best practices 2

3 [ Who is REI? Outdoor Specialty Retailer Co-op structure Established in 1938 Based in Seattle, WA $2.0B in sales 11,000 employees 125 Stores/robust online business 2 DC s Private Brand 3

4 [ REI Footprint SAP IS-Retail Solution ECC 6 FI MM CO SD Merchandise & Assortment Planning Business Warehouse POSDM SCM Forecasting & Replenishment Process Integration Enterprise Portal * REI also owns the BusinessObjects tool suite (Crystal, WebI, Xcelsius)

5 [ Scope of SAP Retail Footprint/Roadmap 2010 implemented ECC, FICO, POSDM, BW, netweaver, handheld scanning 2011implemented MAP Financial planning 2011 executed substantial hierarchy reclassification Future: F&R 5.2 Future-Future: MAP Assortment planning 5

6 [ Why SAP MAP Legacy system unstable Legacy system would not support a hierarchy reclassification Change from Retail method of accounting to Cost method of accounting Leverage the SAP ECC/BW platform Include Private Brand planning Supports location, product and strategic planning levels 6

7 [ Implementation Started in May went live in September 2011 Karabus as a consult for development of planning process SAP as implementation team Total team: 2 SAP/4 REI Full greenfield effort Product: Monthly, class level, Sales/Turn/ Margin/ Inv SAP support for Calculation Engine rebuild Inconsistent performance using portal interface Web Application Designer (WAD) used to develop UI front end. 7

8 [ REI Product Hierarchy Total Specialty Shop Department Class: Lowest level of product planning Merch-Cat 8

9 [ Product Planning KPI s Sales Inline, Clearance, Promo Inventory Inline, Clearance, Promo Gross Margin Average Unit Retail (AUR) Average Unit Cost (AUC) Monthly at class level Number of Departments: 52 Number of Classes: 238 9

10 [ Planning Layouts/Reports Open to buy Preseason Strategic Location Private Brands 3 plan versions 10

11 [ Channel Hierarchy Total Retail/Direct Region District Store: Lowest planning level DMA 11

12 [ Location Planning KPI s Line of Business Planning (Retail, Online) Region, District, Location Sales only Monthly Total Store (created to go to Specialty Shop) Created concepts for planning Comp Stores, New Stores and non-comp stores 12

13 [ Benefits Stable platform Less Administration Allowed for Hierarchy reclass Better management of perishable inventory due to CMA Integration of Private Brand planning System Flexibility 13

[ Key Learnings Define future planning process before starting implementation Pick a good time in the planning cycle to go live Spend more time understanding CMA impacts Think

14 [ Key Learnings Define future planning process before starting implementation Pick a good time in the planning cycle to go live Spend more time understanding CMA impacts Think twice about the triple play: CMA, Hierarchy, new System Be more thoughtful on strategy for transition on Retail vs. CMA reporting KPI s EOP$ don t equal BOP$ Developed reporting last 14

15 [ Best Practices Define planning process prior to start of implementation Layout/Tab management Leadership level support (REI) Executive alignment REI-SAP Agile development 15

16 [ ] Thank you for participating. Please remember to complete and return your evaluation form following this session. For ongoing education on this area of focus, visit the Year-Round Community page at [ SESSION CODE:

E-Learning Course: Understanding Retail

E-Learning Course: Understanding Retail Target Audience This program is designed for people who sell or market to retailers. It is ideal for both merchandise suppliers who sell directly to retailers, and