Linda Bounds Vice President – Financial Services

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


• Linked to Organizational Goals


• 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 Management2. Strategic Planning (Expertise, Speed and Agil ity) 2. Workforce Training and Development3. 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 Management7. Inventory Management 7. Project Management8. Order Fulfi llment Capabilities (Nitro Express) 8. Business Intel l igence (Information Management and Analysis)

9. Larry Positioned as Face and Voice of Midway Representing our Brand

9. Market Research, Analysis and Benchmarking

10. Vendor Relationship Management 10. Succession Planning11. Key Conservation Group Strategic Al l iances 11. Long-Term Planning12. Culture of Continuous Improvement and Innovation

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

14. High Performing Employees15. Internal Information Systems Capabil ities16. In-House Video Production Capability (GunTec)

Threats1. Entering New Markets and Growing Market Share 1. MAP Programs Limiting Promotional Opportunities2. Becoming an Internet-Only Retai ler 2. Competition from Websites Doing Fulfi llment Only 3. Internet Advertising and Marketing 3. Increasing/Changing or Unknown Regulations on Products4. Social Marketing and Monitoring 4. Business Downturn due to Market Conditions5. Sourcing MidwayUSA Branded Products 5. Vendors Restricting Exports

6. Knowledge Content & Product Information Creation, Management and Distribution

6. 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 Professionals9. 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 Capabilities12. Expanding Repack/Bulk Component Business13. Negotiating Improved Freight Programs14. 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

Key Elements - Performance Measurement System 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

Key Elements - Performance Measurement System Establish the Measures • Integrate stakeholder requirement, process, measure and value

Key Elements - Performance Measurement SystemBalanced Scorecards

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

Company Key Measures*2011 YTD

Actual2011 YTD

GoalApril/Q2

Actual April/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.

Customer Satisfaction


Customer SatisfactionDetail


7.1 Customer Satisfaction Detail 2011 April/Q2Measure 2009 2010 Actual Goal Actual Goal7.1.3 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 Scorecard

2009 2010 April AprilEOY EOY Actual Goal Actual Goal

Stocking Cost per Invoice - Stocking $0.25 $0.22 $0.18 $0.25 $0.27 $0.30Cost per Line - Stocking $1.31 $0.90 $0.92 $1.00 $1.45 $1.50Dock 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 $0.35Cost per Line - Receiving $1.77 $1.55 $1.44 $1.46 $1.40 $1.46Receiving 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 160Ship QC Invoices per hour 57 51 51 50 53 50Cost 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 $0.08Cost 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 $1.87Same 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 NADept - 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 $5,000Productivity: 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 Measures 2011 YTD


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

Employee IDName Home Dept

Packages Shipped

Shipping Hours

Packages per Hour

Picking Scans

Picking Hours

Scans/Hr

11111 Stan Frink Shipping 202 4.5 44.9 364 2.2 165.522222 John Doe Picking 678 10.3 65.8 2196 15.1 145.433333 Jane Doe Shipping 472 6.6 71.5 891 4.4 202.544444 Jim Smith Shipping 392 5.3 74.0 1548 9.9 156.455555 Jill Smith Picking 187 4.2 44.5 1447 10.6 136.5


Daily Dashboard - Company Level

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


CompanyScorecard

Employee Performance

Area Process Measures

Department Scorecard

Monthly SLT Review

Supervisor Daily Review

Monthly DLT Review

Monthly Review with

President

Key Elements – Performance Measurement SystemSystematic Review Process

Key Elements – Performance Measurement SystemTake 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

Key Elements – Performance Measurement SystemTake Action - Value Creation

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


Key Elements – Performance Measurement System 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 10/30/2012UPC Acquisition* Completed 2/1/2012 5/31/2012 5/31/2012Slotting (2-Year Plan)* In progress 1/3/2011 11/7/2012 11/7/2012Sitka Niche Marketing Campaign* Completed 1/23/2012 12/31/2012 12/31/2012Reward and Recognition Process Re-engineering In progress 1/3/2012 9/30/2012 9/30/2012Relocate Support Departments to Roosevelt Building In progress 11/15/2011 10/31/2012 10/31/2012Receiving Rewrite (2-Year Plan) In progress 7/1/2011 11/19/2012 11/13/2012Product Recommendations In progress 2/1/2012 8/31/2012 8/31/2012Product 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

Key Elements – Performance Measurement SystemCommunicate

• Communicate Improvements – SOTB and Qtrly DKS– Monthly DLT and staff review– Daily dashboard review

• Celebrate Improvements – Formal/informal R & R – Engages Employees

Key Elements – Performance Measurement SystemValue 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 Innovation3. Organizational and personal learning

– Engagement– Organizational DNA

Questions?

Documents

Linda Bounds Vice President – Financial Services