W. FRANK DELL II, CMC DELLMART & COMPANY MODERN MANAGEMENT CONTROLS

DELLMART & COMPANY2 AGENDA INTRODUCTION FOUNDATION SYSTEMS

DELLMART & COMPANY3 Objectives Introduce approaches for management labor control Provide Management foundations Describe typical control systems Identify approach issues and drivers

DELLMART & COMPANY4 Management Is Difficult Own mind of employees Difficult to motivate –Working for success –Pride in work –Getting by Challenge –Getting the job done –Getting the job done right Increase –Productivity –Service –Accuracy

DELLMART & COMPANY5 Larger Company Factors ADVANTAGES Specialization Affordable Training Promote within Computer Systems DISADVANTAGES Span of Control Communications Local Interest

DELLMART & COMPANY6 Computer System Limitations Limitations in scope –Man Vs Machine Maintenance requirements –Changes in process or methods Data issues –Timely collection –Accuracy –Complete (all entries every day)

DELLMART & COMPANY7 AGENDA INTRODUCTION FOUNDATION SYSTEMS

DELLMART & COMPANY8 Forces On Management

DELLMART & COMPANY9 Controls Require Balance Assets EmployeesAssets

DELLMART & COMPANY10 Basic Controls Company Policies –Mission Statement –Personnel Policies –Financial Controls Job Description –Scope of responsibilities –Reporting relationship –Primary task description –Secondary task description

DELLMART & COMPANY11 Management Responsibilities Hire right people Train and educate –Employees –Supervisors Forecast requirements Assign and schedule employees Make employees accountable Verify work is performed correctly Follow up

DELLMART & COMPANY12 Labor Control Concept

DELLMART & COMPANY13 Cost Of Store Labor

DELLMART & COMPANY14 Levels Of Control General – everyone Area – store, warehouse or department Employee groups – stocking or selecting Computer monitoring Computer controlling

DELLMART & COMPANY15 AGENDA INTRODUCTION FOUNDATION SYSTEMS

DELLMART & COMPANY16 Control Systems STOREWAREHOUSEHEADQUARTERS Time & Attendance Front EndWarehouse Mgt.Promotion Mgt. InboundTransportation Mgt.Procurement Service Dept.MaintenanceBudgets Process Dept.

DELLMART & COMPANY17 Time & Attendance Core computer system –Hourly employee pay base Records by location –Days worked –Hours worked –No shows Identifies whose working, but not what they are doing Not a fool proof approach

DELLMART & COMPANY18 Time & Attendance - System

DELLMART & COMPANY19 Store Labor Overview TASKDRIVER ReceivingOrders/Cases StockingCases/Units OrderingItems ProcessingPounds/Cases/Batch/Units ServiceCustomers/Items Front EndCustomers/Items Support

DELLMART & COMPANY20 Inbound Represents 15% to 20% in store labor Service and control issues –Shelves fully stocked –Unauthorized items and product cost –Accurate store inventory Labor scheduling –Door coverage for receiving –Dry, refrigerated and frozen stocking

DELLMART & COMPANY21 DSD Receiving - System

DELLMART & COMPANY22 Stocking Method STEPTIME Push cart to aisle11.80 Position case2.94 Cut case3.22 Set label gun (optional)9.98 Price items (optional).40 Place item on shelf1.47 Rip and flatten cardboard7.93 Push cart to backroom1.78 Place cardboard in bailer2.21

DELLMART & COMPANY23 Process Department coverage –Customer service Production –Consistent method –Shrink control Periodic Task –Clean –Straighten –Re-supply –Ordering

DELLMART & COMPANY24 Process - System

DELLMART & COMPANY25 Service Department coverage –Minimum of one –Adjust to transactions Periodic task –Clean –Straighten –Re-supply –Ordering

DELLMART & COMPANY26 Front End Represents a third to half of store labor Central customer service point Control issues –Money –Shrink Scanning is a minimum requirement Can be a significant labor waste –Reassign labor during slow periods

DELLMART & COMPANY27 Front End - System

DELLMART & COMPANY28 Linking Store Systems

DELLMART & COMPANY29 Non Food Store Labor Open StoreAssist Customers Cover RegisterBuild Displays OrderPut Up & Take Down Promotions ReceiveComplete Headquarter Survey StockPrice Mark/Tag StraightenComplete Daily/Weekly Logs CleanClose Store

DELLMART & COMPANY30 Warehouse Labor Overview TASKDRIVER ReceivingOrders/Pallets/Cases Put AwayPallets/Travel SelectionTrips/Cases/Travel ReplenishmentPallets/Travel LoadingPallets Support

DELLMART & COMPANY31 Inbound Issues –Accurate inventory –Transfer inventory ownership Vendor performance –On time delivery –Complete delivery Operations –Door utilization –Dock congestion –Completing paperwork

DELLMART & COMPANY32 Receiving - System

DELLMART & COMPANY33 Receiving Method STEPTIME Walk from office to dock2.55 Open/close dock door.96 Set/remove dock plate4.11 Move pallet from truck to dock55.24 Count cases and record8.97 Walk from dock to office2.55 Log in delivery4.54 Process paperwork10.22

DELLMART & COMPANY34 Put Away Radio Frequency standard Complete computer control

DELLMART & COMPANY35 Selection Represents 50% of warehouse labor Issues –Accuracy –Productivity –Complete New equipment –Voice recognition –Pick-To-Light

DELLMART & COMPANY36 Selection - System

DELLMART & COMPANY37 Replenishment Approaches –Patrol –Directed

DELLMART & COMPANY38 Transportation Factors Labor Drivers –Stops –Kilometers –Pallets Control –Departure Time –Arrival Time –Quantity –Paperwork

DELLMART & COMPANY39 Summary Employees must be managed Clear communication required –What work is to be done –How is work to be done –When work is to be done –How often the task is performed –Who is responsible No substitution for good supervision

DELLMART & COMPANY40 Summary (Cont.) Computers & Technology –Planning & Scheduling –Tracking –Monitoring –Controlling

DELLMART & COMPANY41

DELLMART & COMPANY42 W. Frank Dell II, CMC President DELLMART & Company 125 Hardesty Road Stamford, CT USA Tel: Fax: