Focus on Results Balanced Scorecards...Focus on Results –Balanced Scorecard •Learning Objectives –Approach to Focus on Results •Identify key stakeholders and requirements •Alignment

Linda BoundsVice President – Financial Services

Focus on Results

Balanced Scorecards

Focus on Results

What approach do you use to achieve and maintain excellent results? -- Results that create loyalty customers and value for your employees, vendors/partners and shareholders.

The Question

Focus on Results – Balanced Scorecard

• Learning Objectives

– Approach to Focus on Results

• Identify key stakeholders and requirements

• Alignment of requirements and strategies

• Systematic review through Balanced Scorecard

– Approach to Creating Value

• Process improvement actions

• Innovation

– Key to Achievement

• Leadership System

• Results - Sustainability

Focus on Results – Creating Value

A Balanced Scorecard is simply:

• Your key stakeholders

• Their key requirements

• Indicators of your performance

• Displays your goals

• All of your important results on one page

Balanced Scorecard

Key Elements - Performance Measurement System

Set the Direction

• Align with Key Stakeholder Requirements


Set the Direction

• Linked to Organizational Goals


Set the Direction

• Align with SWOTS, Core Competencies and Company Strategies

MidwayUSA Company SWOT Analysis Reviewed 1/26/2012, Revised 1/26/2012

Weaknesses

1. Business Administration 1. Process Management

2. Strategic Planning (Expertise, Speed and Agility) 2. Workforce Training and Development

3. Customer Focus/Dedication to Customer Satisfaction 3. Capacity/Capability Planning

4. Product Selection (Just About Everything Concept) 4.Recruiting High-Performing Employees who Share Values

w/Passion for Industry

5. New Product Acquisition 5. Website Management (Features and Speed)

6. Promotional Business Model 6. Customer Complaint Management

7. Inventory Management 7. Project Management

8. Order Fulfi l lment Capabilities (Nitro Express) 8. Business Intelligence (Information Management and Analysis)

9.Larry Positioned as Face and Voice of Midway Representing

our Brand9. Market Research, Analysis and Benchmarking

10. Vendor Relationship Management 10. Succession Planning

11. Key Conservation Group Strategic Alliances 11. Long-Term Planning

12. Culture of Continuous Improvement and Innovation

13.Loyal Employees with a High Level of Industry Knowledge and

Passion

14. High Performing Employees

15. Internal Information Systems Capabilities

16. In-House Video Production Capability (GunTec)

Threats

1. Entering New Markets and Growing Market Share 1. MAP Programs Limiting Promotional Opportunities

2. Becoming an Internet-Only Retailer 2. Competition from Websites Doing Fulfi l lment Only

3. Internet Advertising and Marketing 3. Increasing/Changing or Unknown Regulations on Products

4. Social Marketing and Monitoring 4. Business Downturn due to Market Conditions

5. Sourcing MidwayUSA Branded Products 5. Vendors Restricting Exports

6.Knowledge Content & Product Information Creation,

Management and Distribution6. Computer Viruses, Malware, Phishing and Hacking

7. Leveraging Potterfield Donations to Key Conservation Groups 7. Legislation Affecting the Shooting/Hunting Industry

8. Customer Relationship Management 8. Limited Supply of Qualified IT and Web Professionals

9. User-Generated Web Content and Community Features 9. Internet Sales Tax

10. International Business Model Expansion 10. Non-Endemic Companies Competing in our Industry (Amazon)

11. Mobile Device Capabilities

12. Expanding Repack/Bulk Component Business

13. Negotiating Improved Freight Programs

14. Improving Customer Satisfaction by Revising PH&I

15. Employee Satisfaction and Engagement (Great Place to Work)

16. Risk Management (Legal & Regulatory Compliance)

Strengths - Allow us to Deliver Exceptional Results

Opportunities - Increases Satisfaction of our Stakeholders


Establish the Measures

• Align with performance and process areas

Key Elements – Performance Measurement System - Link Goals and Requirements to Department and

Individual Scorecards

Company Goals

Customer Satisfaction

Company Requirements

Product Availability

Accurate, Intact

Shipments

Easy to do business with

Department Scorecard

In-stock Rate

Shipping package quality

Fast Delivery

Abandoned Calls

Individual Scorecard

• In-stock rate by product line

• Package quality rate

• Picking error rate

• Ship QC invoices per hour


Establish the Measures

• Integrate stakeholder requirement, process, measure and value


Balanced Scorecards

- Measures provide depth and breadth for fact-based decision making

Company Key Measures*2011 YTD

Actual

2011 YTD

Goal

April/Q2

ActualApril/Q2 Goal 1 2 3 4 Benchmark source

Customer Satisfaction - Overall1 93.0% 92.0% 93.0% 92.6% Crutchfield, Orvis

Employee Satisfaction and Engagement 78% 84% 78% 84% N/A N/A N/A Hewitt & NBRI

Vendor Satisfaction 94% 92% 94% 92% N/A N/A N/A Cabela's, Bass Pro, Brownells

Gross Sales - Overall 100,000$ $92,000 50,000$ $50,000 Cabela's (rate of growth)

Net Income % of Net Sales 10.0% 9.9% 10.0% 9.9% Cabela's

Timely Payment of Earnings 100% 100% 100% 100% N/A

Inventory Turns (Paid) 10.6 10.0 10.5 10.0 2 Cabela's

% of Customer Orders with NRA Round-Up 64% 62% 64% 62% N/A

Receive Malcolm Baldrige National Quality Award 100% 100% 100% 100% N/A

Legal, Ethical and Regulatory Compliance 92% 100% N/A 100% N/A N/A N/A N/A

Strategic Plan Execution 17% 17% 17% 17% N/A

Continuous Improvement in Productivity 100% 100% 99% 100% N/A

MidwayUSA CEO/President Scorecard

* Not actual numbers. Numbers are for illustration purposes only.




Detail

* Not actual numbers.

Numbers are for illustration

purposes only.

7.1 Customer Satisfaction Detail 2011 April/Q2

Measure 2009 2010 Actual Goal Actual Goal

7.1.3 Fast shipping and delivery 94.0% 94.0% 94% 93% 94.0% 95%

7.1.4.1 Customer Satisfaction Survey Question #13 94.0% 94.0% 94.0% 93% 94.0% 95%

7.1.4.2 Same Day Shipping (all orders) 98.9% 95.0% 88.4% 99.0% 92.0% 99.0%

7.1.4.3 Same Day Shipping (Pick-up orders) Coming Coming Coming Coming Coming Coming

7.1.8 Friendly, courteous, respectful, ethical service 93.0% 94.0% 93.0% 92.6% 93.0% 92.5%



7.1.8.3 After Call CSR survey N/A 92.0% 93.8% 92.0% 94.4% 92.0%

7.1.8.4 Time Service Factor 69.3% 75.2% 83.2% 75-85% 84.1% 75-85%

7.1.8.5 Abandoned Calls 2.6% 2.5% 2.0% 3.0% 1.4% 3.0%

Logistics Department

Scorecard2009 2010 April April

EOY EOY Actual Goal Actual Goal

Stocking Cost per Invoice - Stocking $0.25 $0.22 $0.18 $0.25 $0.27 $0.30

Cost per Line - Stocking $1.31 $0.90 $0.92 $1.00 $1.45 $1.50

Dock to Stock: Total Cycle Time Average n/a 12.8 16.1 17.0 29.5 61.0

Repack Cost per Invoice - Repack ($0.05) $0.02 $0.01 +/- $0.02 $0.01 +/- $0.02Repack Labor Variance 22.4% -12.2% -1.0% +/- 10% -1.0% +/- 10%

Receiving Cost per Invoice - Receiving $0.37 $0.33 $0.30 $0.31 $0.20 $0.35

Cost per Line - Receiving $1.77 $1.55 $1.44 $1.46 $1.40 $1.46

Receiving Same Day 99.4% 97.6% 90.5% 95.0% 83.8% 99.0%

Product Control Inventory Adjustments $7,953 ($2,000) ($7,000) ($7,000) ($4,000) ($4,000)

Shipping & Picking Same Day Shipping 98.9% 95.0% 87.4% 99.0% 86.8% 99.0%Shipping Package Quality 99.7% 99.9% 99.9% 99.8% 99.5% 99.8%

Picking Scans per Hour 163 144 162 160 168 160

Ship QC Invoices per hour 57 51 51 50 53 50

Cost per Invoice - Shipping $1.62 $1.66 $1.20 $1.32 $1.00 $1.24

Warehouse Cost per Invoice - Warehouse $0.28 $0.23 $0.07 $0.08 $0.06 $0.08

Cost per Line - Warehouse $2.89 $2.36 $2.30 $2.70 $2.00 $2.70

Returns Cost per Return $2.48 $1.87 $1.37 $1.87 $1.06 $1.87

Same Day Returns 80.6% 100.0% 87.0% 99.0% 99.0% 99.0%

Training & ERG Reliability 99.1% 97.7% 92.9% 90.0% 92.0% 90.0%

Conduct DKS to Schedule 100.0% 100.0% 100.0% 100.0% Quarterly Quarterly NA NA NA

Dept - Direct Training Expenditures as % of Payroll2.7% 2.1% 3.5% 3.0% Quarterly Quarterly NA NA NA

Process Management ISO Corrective Action 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Results Management Performance to Budget $20,000 $20,000 $20,000 $25,000 $4,000 $5,000

Productivity: Profit $ per Employee Cost $ $4.98 $4.51 $5.80 $5.73 $5.80 $4.44

History

4321

LO Process Scorecard

Area Process Section Process Measures2011 YTD


Employee PerformanceShipping & Picking Productivity: 6/10/11 through 6/17/2011

Employee IDNameHome

Dept

Packages

Shipped

Shipping

Hours

Packages

per Hour

Picking

Scans

Picking

HoursScans/Hr

11111 Stan Frink Shipping 202 4.5 44.9 364 2.2 165.5

22222 John Doe Picking 678 10.3 65.8 2196 15.1 145.4

33333 Jane Doe Shipping 472 6.6 71.5 891 4.4 202.5

44444 Jim Smith Shipping 392 5.3 74.0 1548 9.9 156.4

55555 Jill Smith Picking 187 4.2 44.5 1447 10.6 136.5

* Not actual numbers. Numbers are

for illustration purposes only.

Daily Dashboard - Company Level

Date Range: 6/10/2011 thru 6/16/2011 11:59 PM

Date Invoices Gross Sales

(Actual)

Gross Sales

(Goal)

Gross

Sales %

of Goal

Margin

%

Inventory Inventory

Goal

Inventory

% of Goal

In Stock

Rate

(Goal =

85%)

Same Day

Shipping*

(Goal =

99%)

6/16/2011 1,000 $100,111 $119,265 84% 36% $153,000 $150,000 102% 79.3% 97.0%

6/15/2011 1,200 $98,148 $108,675 90% 32% $150,000 $150,000 100% 79.2% 96.8%

6/14/2011 1,300 $81,136 $78,434 103% 36% $124,000 $150,000 83% 78.8% 96.1%

6/13/2011 1,400 $75,247 $78,061 96% 32% $115,000 $150,000 77% 78.7% 97.1%

6/12/2011 1,500 $73,284 $70,591 104% 35% $112,000 $150,000 75% 77.7% 95.7%

6/11/2011 1,600 $79,173 $87,145 91% 34% $121,000 $150,000 81% 78.3% Saturday

6/10/2011 1,700 $100,765 $105,536 95% 34% $154,000 $150,000 103% 79.0% 95.7%

84.2%

Time

Service

Factor

(Goal = 75 -

85%)

76.2%

85.4%

63.8%

80.1%

71.8%

83.8%

Company Daily Dashboard


Company

Scorecard

Employee

Performance

Area Process

Measures

Department

Scorecard

Monthly SLT

Review

Supervisor

Daily Review

Monthly DLT

Review

Monthly

Review with

President

Key Elements – Performance Measurement System

Systematic Review Process


Take Action – Value Creation

Creating Value

Key Elements of Performance Measurement System

Take Action - Value Creation

• Review of results generate process improvement and innovation

• Three categories at Midway:

– Corrective Actions from review of process measures

– Innovation from continuous improvement ideas

– “Bucket List” for strategically significant ideas


Take Action - Value Creation

- Results not meeting goal for three months - establish Action Plan



Take Action – Company Action Plans (CAPs)

Department Action Plans (DAPs)

- Track Action Plan Results through integration into the process.

2012 MidwayUSA Strategic Plan Execution Measure

% Complete 16%

% Goal 16%Initiative (1) Status (2) Start (2) Complete (2) Proj Compl Date (2)

VAT Redesign In progress 4/1/2012 10/30/2012 10/30/2012

UPC Acquisition* Completed 2/1/2012 5/31/2012 5/31/2012

Slotting (2-Year Plan)* In progress 1/3/2011 11/7/2012 11/7/2012

Sitka Niche Marketing Campaign* Completed 1/23/2012 12/31/2012 12/31/2012

Reward and Recognition Process Re-engineering In progress 1/3/2012 9/30/2012 9/30/2012

Relocate Support Departments to Roosevelt Building In progress 11/15/2011 10/31/2012 10/31/2012

Receiving Rewrite (2-Year Plan) In progress 7/1/2011 11/19/2012 11/13/2012

Product Recommendations In progress 2/1/2012 8/31/2012 8/31/2012

Product Page Improvement In progress 2/6/2012 10/31/2012 10/31/2012

Product Center Re-engineering to Support Merchandising Work System (2011-13) In progress 10/1/2012 12/31/2013 12/31/2013


Communicate

• Communicate Improvements

– SOTB and Qtrly DKS

– Monthly DLT and staff review

– Daily dashboard review

• Celebrate Improvements

– Formal/informal R & R

– Engages Employees


Value Creation – Repeat the Process

Creating Value

Value Creation – Driven through Leadership System

“Results” of Excellent Performance Measurement System--

Value Creation and Performance Excellence

1. Deliver every improving value to customers and stakeholders

– Loyalty

– Growth

– Sustainability

2. Improves overall organizational

effectiveness and capabilities

– Continuous Innovation

3. Organizational and personal learning

– Engagement

– Organizational DNA

Questions?

Documents

Focus on Results Balanced Scorecards...Focus on Results –Balanced Scorecard •Learning Objectives –Approach to Focus on Results •Identify key stakeholders and requirements •Alignment