Supply Chain Management

2. Supply Chain Management Jan de Jong Microsoft Worldwide Industry Manager Retail jandej@microsoft.com

3. Agenda • Retail Industry Background • Improving the Supply Chain • Microsoft Strategy for Improving the Supply Chain • Impact of GDS/RFID in Optimizing Supply Chain

4. Oracle Beats Out SAP For Retek: Now It's About Retailers With a clearer landscape, retailers will accelerate spending to address their enterprise application replacement strategies only if vendors work to increase value, improve core functionality, and raise the level of merchant thinking in their products. The Takeaway: The software vendor that figures out how to blend merchant thinking (the blend between functionality, workflow, demand intelligence, and usability oriented toward how a retail merchant works day-to-day) with the right level of core functionality will be the successful leader of this changing market. Scott Landon, AMR research, March 22, 2005 Retailers are going to spend on technology—or they will die against those that do.…Scott Landon, AMR Research, March 22, 2005 “ "With Oracle still busy integrating PeopleSoft and JD Edwards, and with Oracle management emphatic in stating that this purchase would be tiny compared to that effort, existing users will be faced with the same challenges they had before Retek went in play: The upgrade path from existing to new Retek releases won't get easier any time soon; the core application remains difficult and expensive to install.“ Paula Rosenblum, Aberdeen Group, March 2005

5. Deliver Business Value Keep the Business Running Manage Costs But driving down the operational costs allows focus on new capabilities Meet the Strategic Business Objectives

6. Agenda • Retail Industry Background • Improving the Supply Chain • Microsoft Strategy for Improving the Supply Chain • Impact of GDS/RFID in Optimizing Supply Chain

7. IT Spend for Supply ChainContinuing the investment Source: 15th Annual Retail Technology Trends Survey conducted by RIS News and Gartner, March 2005

8. Supply Chain Business Environment • Supply Chain Complexity • Demand variability • Supply inefficiencies • Uncertainty • Security • Shrinkage • Returns, Recalls, Recycling • Collaborative Supply Chain Standards • Global Data Synchronization • CPFR • Food safety standards • OPOS & RFID • The majority (67%) of retail systems are home grown legacy systems in Tier 1 retailers • The data that is captured by these systems is required in critical customer facing applications Source: Accenture Analysis, March 2004

9. The CPG and Retail industry is about to bridge internal and external collaboration Efficiency Inside the Organisation Efficiency Outside the Organisation Collaborative CRM RFID / intelligent Tagging Collaborative Supply Chain Productivity CRM SCM B2B e-business ERP Re-engineering MRP Quality Circles 08 85 95 00 05 10

10. Manual Process Islands Connected Processes Smart Processes

11. Agenda • Retail Industry Background • Improving the Supply Chain • Microsoft Strategy for Improving the Supply Chain • Impact of GDS/RFID to Optimizing Supply Chain

12. Focus on Integration of legacy and packaged based solutions as well as vendor collaboration Data Warehouse Legacy Applications Supply chain and merchandising systems Web Services With Vendors ERP Systems Merchandising and Supply Chain Systems supporting in-store systems delivering an End-to-End Microsoft solution

13. Microsoft and Partners provide Business Solutions Product Company Solutions Company MS Sales Teams withoutEnterprise Partners MS Sales Teams withEnterprise Partners

14. Development Tools Smarter Retailing Architecture – Integration Of The Partner Solution Store Enterprise Partner Solution Partner Solution Applications and Services Systems Management Hardware and Networks Microsoft Store Platform Microsoft Enterprise Platform Platform

15. Partnership With JDA http://verticalcontent\retail\videos 1. SCM JDA_MEIJER_MGB_2000K.wmv

16. JDA & Microsoft EMEA Eric Brambilla JDA EMEA

17. 1300 Retail Customers 61% Revenue 3400 Demand Chain Customers 35% JDA: integrated software and services for the retail demand chain EMEA Long term strategy since 1989 (UK) Global but localized approach Empowered and knowledgeable team 22% of 2004 revenues 770 customers - 165 associates United Kingdom · Netherlands · Norway · France · Spain · Italy · Dubai·South Africa

18. BoB Integrated Best of Breed Point Solution Acquisitions ARTHUR INTACTIX INTELLECT E3 SMART - IPP Programs Portfolio Synchronized Synchronized Integrated Releases PortfolioEnabled Integrated & Best of Breed 2002 2005 JDA: a 7 year lead in consolidating and integrating BoB solutions

19. EMEA customers Castorama GUCCI Spain CE France France Redcats World France Spain Conforama Spain CE Castorama B&Q BLOKKER – BOOKER – BRICO – CISALFA – COOP – ICELAND – LAURA ASHLEY – LEROY MERLIN – MANOR – MATALAN – NORGESGRUPPEN – OFFICE DEPOT – RIVER ISLAND – SAFEWAY – SOMERFIELD – STAPLES – THE BOOTS COMPANY – VOMAR - WORLD DUTY FREE Strong retail market footprint+370 retail customers in 4 years Product Category JDA Customers 527 Merchandise Management Store Operations 253 Merchandise and Assortment Planning & Allocation 495 610 Forecasting and Replenishment Category Management & Space Planning 3,606

20. JDA & Microsoft partnership Together, Microsoft and JDA transform decision making throughout the demand chain for retailers and their suppliers with agile, real-time, integrated solutions Enabling the Agile Enterprise Industry Specific Solutions ScalablePerformance Expertise and experience Interoperability& Integration

21. Microsoft JDA Portfolio Retail #1 integrated suite on .Net JDA JDA

22. Casino story • “I strongly believe that ERP is a mistake in retail because these systems favor data integration to the disadvantage of flexible processes.Maybe one day big companies like SAP will get the knowledge and expertise to deliver solutions that support the fast pace of retail, but I don’t see it in the short term and certainly not today” J.L. Galzi – President of IT – Casino Group • PRO Project • Everyone from the store to the warehouse will be in synch with a single demand forecast based on sales • Processes across the enterprise will be globalize to enable more precisely drive inventory replenishment decisions and strengthen the connection of the retailing disciplines

23. Enabling Customer Value with Partners Strategic Partnerships Systems & infrastructureexpertise Sizing & benchmarking Consulting andImplementationPartnerships Change Management Integration VAR UCS Solutions Smolan Group Demand Soft Strategix Solteq New markets Geographic Expansion

24. SAP for Retail SAP Runs Real Time Retailing on SQL 2005

25. SAP Installations and Customers Q4 2004 Installation Growth (Retail & Wholesale Distribution) 5.500 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 5.101 Customers Installations Productive Installations 4.725 4.312 3.999 3.736 3.411 3.171 2.991 2.824 2.599 2.443 2.428 2.290 2.205 2.140 1.984 1.943 1.825 1.853 1.723 1.706 1.433 1.573 1.358 1.499 1.282 1.456 1.405 1.178 1.315 1.804 1.229 1.646 1.130 1.675 1.468 1.472 1.427 1.571 1.367 1.483 1.274 1.306 1.200 1.115 1.158 1.225 1.081 Source: ISP/CIS reporting, not incl. are the customer types SAP internal, -partner, -hardware partner and -logo partner. Q1 /01 Q2 /01 Q3 /01 Q4 /01 Q1 /02 Q2 /02 Q3 /02 Q4 /02 Q1 /03 Q2 /03 Q3 /03 Q4 /03 Q1 /04 Q2 /04 Q3 /04 Q4 /04

26. An example of full integration: Exposing SAP Process through Microsoft Office SAP

27. Manhattan Product Overview Manhattan Supported Platform Current Platform Future Platform Warehouse Mgmt for Windows .NET / SQL / Windows 2003 .NET / Windows 2003-2005/ Webservices Written in RPG, running on iSeries, OS/400, B2/400 – No change Written in RPG, running on iSeries, OS/400, B2/400 IBM iSeries Open Systems J2EE-based largely written in Java with some C++ ported back to DB2, Oracle, SQL J2EE-based largely written in Java ported back to DB2, Oracle, Yukon Manhattan has embraced the .NET platform

28. Agenda • Retail Industry Background • Improving the Supply Chain • Microsoft Strategy for Improving the Supply Chain • Impact of GDS/RFID on optimizing Supply Chain

29. "RFID, or radio-frequency identification tags, has reduced out-of-stock merchandise by 16 percent at the company's stores that have begun to use the technology over the past 12 months, Linda Dillman, WalMart's chief information officer, said at the company's annual analyst meeting Wednesday. WalMart has been able to restock RFID-tagged items three times as fast as non-tagged items ... " Industry: Moving Beyond Hype… • Continued momentum in Retail/CPG • Other industries following • Progress on HW side: Gen 2 ratification • EPCGlobal as Int’l Standard • Getting into Execution Phase

30. Operational Efficiencies Total Supply Chain Visibility Shrinkage, counterfeit Security, Regulations Right items Right place Right time Why is RFID so Compelling ? Wal-Mart - cases have to be read 100 percent of the time at 540 feet per minute

31. Key Scenarios for Retailers Shrinkage and theft reduction Eliminating out of stock situations Promotions management Vendor managed inventory Fresh item management Returns management …..and many more!

32. Retail Partners

33. Agenda Summary

34. Retailers are implementing on Microsoft platform….. JDA new portfolio solution at Meijer, Casino and HEB SAP on SQL at Zale’s Jewelry House of Fraser, vendor managed inventory RFID solution at Marks & Spencer Ahold Global Data Synchronization Delhaize Product Information Manager Tesco-in-a box, complete SCM package Ann Taylor USA – Merchandise management (Torex)

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