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Daniel G. Reynolds 
October 31, 2014
Collaborate with Suppliers 
Using Technology 
to Drive Performance 2
About Our Industry 
• 
Retail lawn and garden centers 
– 
Independents 
– 
Local/regional chains 
• 
No Internet retailers...
Fragmented Suppliers 4 
Local/Regional Chains
No Imports of Live Plants 
CFR § 319.37-8: 
– 
Plants for planting at the time of importation into the United States must ...
About Our Company 
• 
2nd largest garden center chain 
• 
Dallas and Houston markets 
• 
Public company (SEC exempt) 
• 
7...
Today’s Agenda 
• 
Competitive challenge 
• 
Strategic response 
• 
Rethinking how we stock our stores 
• 
Rethinking how ...
Competitive Challenge 
• 
Launch of Home Depot Landscape Supply 
– 
5 stores in Atlanta 
– 
6 stores in Dallas 
• 
Dallas ...
Strategic Response 
• 
Total retail focus 
• 
The best merchandise 
• 
The best people 
• 
The best shopping experience 9
Total retail focus 
• 
Divested all growing & wholesale operations 
– 
Distraction of management attention 
– 
Money pit 
...
The Best Merchandise 
• 
Live plants drive everything else 
• 
The best quality 
• 
The best selection 
• 
Reasonable pric...
The Best People 
• 
Training 
• 
State certifications 
• 
Low-value paperwork tasks 12
The Best Shopping Experience 
• 
Take care of the customer first 
• 
Everything else comes second 
• 
Make the store look,...
How We Stock Our Stores 
• 
Before 
– 
No UPCs on live plants 
– 
Manual cash registers 
– 
No item sales data 
– 
Cycle c...
How We Work With Our Suppliers 
• 
Before 
– 
Store manager purchased inventory 
– 
Over 500 live plant suppliers 
– 
Avai...
Transition 1: Centralize Buying 
• 
Vice President of Merchandising 
– 
With full staff 
– 
Best people from the stores 
•...
Transition 2: Planning 
Items – use Pareto (80/20) 
– 
Sales plans 
– 
Stock plans 
Suppliers – use Pareto (80/20) 
– 
Sup...
Transition 3: Execute 
• 
Manual cash registers 
• 
Spreadsheets 
• 
Cycle counts 
• 
Updated plans with results data 
• 
...
Transition 4: Automate 
• 
POS system 
• 
Back office purchasing 
• 
Our own UPCs 
• 
Web application for collaboration 
–...
Web Application for Collaboration 
• 
Buyer develops plans 
– 
Sales 
– 
Stock 
– 
Supply 20
Web Application for Collaboration 
• 
Supplier reviews plans 
– 
Confirm 
– 
Propose changes 21
Web Application for Collaboration 
• 
Supplier updates quantity 
• 
Retail-ready merchandise 22
Web Application for Collaboration 
• 
Buyer completes 
– 
Supplier selection 
– 
Store allocation 
– 
Purchase order 23
Results 24 
Before 
After 
Number of SKUs 
? 
73,000 
Number of live plants suppliers 
500+ 
138 
Weekly store manager hou...
Take-Aways 
Designing the new process: 
– 
Put your top people on it 
– 
Show them the goal 
– 
Let them show you how to r...
Take-Aways 
Getting your suppliers on board: 
• 
Understand your suppliers’ business 
– 
Know their pain points 
– 
Be the...
Take-Aways 
Implementing the technology: 
• 
Use Web apps in the cloud 
– 
Faster to develop 
– 
Runs anywhere on anything...
One More Thing… 
• 
…Home Depot Landscape supply closed all 11 of its stores 
• 
And shut down the division 28
Questions 29
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Presentation to CFO West 2014

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My presentation to CFO West conference in San Francisco on Friday, 31 October 2014. I review our company's strategic response to a competitive challenge, and provide key take-aways for the audience of approximately 300 financial executives.

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Presentation to CFO West 2014

  1. 1. Daniel G. Reynolds October 31, 2014
  2. 2. Collaborate with Suppliers Using Technology to Drive Performance 2
  3. 3. About Our Industry • Retail lawn and garden centers – Independents – Local/regional chains • No Internet retailers • Fragmented suppliers • No imports of live plants 3
  4. 4. Fragmented Suppliers 4 Local/Regional Chains
  5. 5. No Imports of Live Plants CFR § 319.37-8: – Plants for planting at the time of importation into the United States must be free of • Sand • Soil • Earth • and other growing media 5
  6. 6. About Our Company • 2nd largest garden center chain • Dallas and Houston markets • Public company (SEC exempt) • 70% of revenue from live plants 6
  7. 7. Today’s Agenda • Competitive challenge • Strategic response • Rethinking how we stock our stores • Rethinking how we work with suppliers • Key take-aways 7
  8. 8. Competitive Challenge • Launch of Home Depot Landscape Supply – 5 stores in Atlanta – 6 stores in Dallas • Dallas stores within close proximity to our Calloway’s stores 8
  9. 9. Strategic Response • Total retail focus • The best merchandise • The best people • The best shopping experience 9
  10. 10. Total retail focus • Divested all growing & wholesale operations – Distraction of management attention – Money pit – Antagonized supply chain • Deregistered from SEC – Odd-lot share buyback – Reduced administrative overhead 10
  11. 11. The Best Merchandise • Live plants drive everything else • The best quality • The best selection • Reasonable pricing 11
  12. 12. The Best People • Training • State certifications • Low-value paperwork tasks 12
  13. 13. The Best Shopping Experience • Take care of the customer first • Everything else comes second • Make the store look, feel and smell great • Have fun and informative events 13
  14. 14. How We Stock Our Stores • Before – No UPCs on live plants – Manual cash registers – No item sales data – Cycle counts several times/week 14
  15. 15. How We Work With Our Suppliers • Before – Store manager purchased inventory – Over 500 live plant suppliers – Availability via fax 15
  16. 16. Transition 1: Centralize Buying • Vice President of Merchandising – With full staff – Best people from the stores • Team self-assigned product lines to Buyers based on supply chain • Plan, source, stock, replenish, promote 16
  17. 17. Transition 2: Planning Items – use Pareto (80/20) – Sales plans – Stock plans Suppliers – use Pareto (80/20) – Supply plans 17
  18. 18. Transition 3: Execute • Manual cash registers • Spreadsheets • Cycle counts • Updated plans with results data • Continuously refine methodology 18
  19. 19. Transition 4: Automate • POS system • Back office purchasing • Our own UPCs • Web application for collaboration – Buyers – Suppliers 19
  20. 20. Web Application for Collaboration • Buyer develops plans – Sales – Stock – Supply 20
  21. 21. Web Application for Collaboration • Supplier reviews plans – Confirm – Propose changes 21
  22. 22. Web Application for Collaboration • Supplier updates quantity • Retail-ready merchandise 22
  23. 23. Web Application for Collaboration • Buyer completes – Supplier selection – Store allocation – Purchase order 23
  24. 24. Results 24 Before After Number of SKUs ? 73,000 Number of live plants suppliers 500+ 138 Weekly store manager hours spent on purchasing 20+ 0 Average inventory per store $315,000 $196,000 Finance, IT, administrative staff 28 9 Web application development cost $60,000
  25. 25. Take-Aways Designing the new process: – Put your top people on it – Show them the goal – Let them show you how to reach it – Give them the tools and authority – They will take you past your goal – And be missionaries for the change 25
  26. 26. Take-Aways Getting your suppliers on board: • Understand your suppliers’ business – Know their pain points – Be their best customer • Pick reliable suppliers • Make sure both of you make more money 26
  27. 27. Take-Aways Implementing the technology: • Use Web apps in the cloud – Faster to develop – Runs anywhere on anything – Keeps your network secure • Share all the data • Give away the technology 27
  28. 28. One More Thing… • …Home Depot Landscape supply closed all 11 of its stores • And shut down the division 28
  29. 29. Questions 29

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