“Integrating Retail Planning & Forecasting with SAP – Brown Shoe’s Journey”

“Integrating Retail Planning & Forecasting with SAP – Brown Shoe’s Journey” Jeff Kuhn Vice President Demand Planning Ron Boschert Director Retail Planning & Forecasting

Agenda • Audience polling questions • Brown Shoe Company at a Glance • Objective of Brown Shoe Demand Planning • Demand Planning Process • Q&A

Audience polling questions: • Does your company have a Demand Planning process? • Is your system set up in weekly or monthly buckets? • What do you use for your demand signal? • Orders • Shipments • POS (consumer demand / retail info) • Would you like to win a $25 gift card for Famous Footwear?

Audience polling questions: Which shoe has the longer life cycle?

Audience polling answers Which shoe has the longest life cycle? Answer: Franco Sarto Bocca classic casual core shoe

Audience polling questions: Which shoe has been around the longest?

Audience polling answers Which shoe has been around the longest? Answer: Dr. Scholl’s Harrington non-slip DRTX brand is sold at our Famous Footwear stores & at Sears, Wal-Mart, Meijer, DSW, Shoe Carnival among many retailers. Work wear for restaurant and service personnel Most recent styles are Health & Wellness shoes designed to provide a workout from regular daily activities. Category emerged in 2009 Gladiator style sandals hit the fashion scene in 2008

Audience polling questions: Which shoe has been worn by presenter Jeff Kuhn at Brown Shoe company functions? Naturalizer Women’s Demetri or Converse Chuck Taylor?

Audience polling questions: Which shoe has been worn by presenter Jeff Kuhn at Brown Shoe company functions / presentations? Answer: Both

Brown Shoe Company • Famous Footwear 1100+ stores selling brand-name, value-priced shoes for the family • Major wholesale supplier of women’s fashion shoes to U.S. department stores & mass market

Some of Our Customers…

Agenda Audience polling questions Brown Shoe Company at a Glance Objective of Brown Shoe Demand Planning Demand Planning Process Q&A

Demand Planning Objective To provide timely accurate pairs forecasts to drive SAP supply planning decisions based on consumer and customer demand

Key steps in Retail Planning & Forecasting • Retail Planning loads retail selling data into RPF • POS forecast for core items generated in Logility • Sales reviews / adjusts forecasts for core items in RPF • Retail Planning & sales develop top line sales plans • Sales enters forecasts for fashion items into RPF • Retail Planning evaluates projected sell through in RPF • Demand Planning rationalizes volumes & pricing • Demand Planning uploads smoothed forecasts to SAP • Supply Planning uses forecast to plan capacity and execute the buy to factories to consume reserved factory space

1. Retail Planning loads retail selling data into RPF • Four retail metrics required: • Pairs sold • Pairs on hand • Retail sales dollars • On hand retail dollars Internal POS data processed automatically through internal systems • Famous Footwear, Naturalizer retail, e-commerce External customer POS data • Retail partner portal • EDI 852 transmission • Sales file emailed from customers Note: Brown Shoe receives POS for 76% of sales volume

1. Retail Planning loads retail selling data into RPFExamples of customer data sources -------------------------------------------------------------------------

2. POS forecast for core items generated in Logility

3. Sales reviews / adjusts forecasts for core items in RPF Account Director (Sales) can adjust system generated pairs forecast or weekly sell through % (weekly sales ÷ inventory)

Key steps in Retail Planning & Forecasting • Retail Planning loads retail selling data into RPF • POS forecast for core items generated in Logility • Sales reviews / adjusts forecasts for core items in RPF • Retail Planning & sales develop top line retailer sales plans • Sales enters forecasts for fashion items into RPF • Retail Planning evaluates projected sell through in RPF • Demand Planning rationalizes volumes & pricing • Demand Planning uploads smoothed forecasts to SAP • Supply Planning uses forecast to plan capacity and execute the buy to factories to consume reserved factory space

4. Retail Planning & sales develop top line retailer sales plans

5. Sales enters forecasts for fashion items into RPF

6. Retail Planning evaluates projected sell through Season sell thru % = season forecast sales pairs ÷ (beginning of season on hand + planned receipts) Adjust receipt quantity to yield desired sell through

7. Demand Planning rationalizes volumes & pricing

8. Demand Planning uploads smoothed forecasts to SAP

9. Supply Planning uses forecasts in SAP to plan capacity and execute orders to factories

Questions?

“Integrating Retail Planning & Forecasting with SAP – Brown Shoe’s Journey”