4 Middle Out: Preseason Planning

The middle out role is usually associated with middle management in the merchandise planning organization. The middle out user receives group targets from the top down user. The middle out user references those targets when creating the department targets. After the middle user has created the department targets, the user provides those targets to the bottom up user, who is usually a merchandise planner.

The Middle Out MFP Plan workbook contains the following tabs:

• Getting Started Tab

• Sales / Markdowns Tab

• Receipts / Inventory Tab

• Margin Tab

• Review Plan / Publish Targets Tab

• Submitted Plan Review / Approval Tab

The last tab in the middle out workbook is the Submitted Plan Review / Approval tab. This is where the middle out user approves or rejects the plan that was created by the bottom up user. To learn more about approving or rejecting the original plan, see Chapter 6, "Middle Out: Plan Approval".

During in-season, the middle out user can publish new middle out targets as necessary to the bottom up user. For more information about in-season activities, see Chapter 8, "In-Season Management".

Middle Out MFP Plan Wizard

To open a Middle Out MFP Plan workbook:

1. Select New from the File menu, or click the New button in the toolbar.

2. On the Planning tab, select Middle Out MFP Plan and click OK.

   Figure 4-1 Creating a New Middle Out MFP Plan Workbook

   
   

3. The Calendar Selection step appears. Select the half you want to examine and click Next.

   Figure 4-2 Middle Out MFP Plan Wizard: Calendar Selection

   
   

4. The Product Selection step appears. Select the divisions you want to examine and click Next.

   Figure 4-3 Middle Out MFP Plan Wizard: Product Selection

   
   

5. The Location Selection step appears. Select the channels you want to examine and click Finish.

   Figure 4-4 Middle Out Role Wizard: Location Selection

   
   

The Middle Out MFP Plan workbook is built.

Getting Started Tab

The following sections describe the worksheets available under the Getting Started Tab:

• Initialize Plan Worksheet

• Target Overview Worksheet

Initialize Plan Worksheet

The first step that middle out users perform after they build the workbook is to seed the plan with the Initialize Plan worksheet.

Figure 4-5 Initialize Plan Worksheet

The following table lists the measures available on this worksheet.

Table 4-1 Initialize Plan Worksheet Measures

Measure	Description
Seed Source	The seed source used to seed the working plan. Use this option to seed or not seed the working plan. You can seed with Last Year's (Ly) or Adjusted Last Year's data. Or, you can choose the Do Nothing option if you do not want to seed the working plan.
Last Seed Source	The last type of seed that was performed in this workbook. One of three options is shown: Seed from Last Year Seed from Adjusted Last Year Do Nothing
Last Seeded Date	The last time the working plan was seeded.

With this worksheet, you can choose to seed your plan with Last Year (Ly) or Adjusted Last Year data to create a demand curve on which to spread the new plan's initial targets. Or, you can instead choose to not seed the plan, which allows you to create a plan that is not influenced by last year's performance.

In the preceding example, both the Half1 FY2011 and Half2 FY2011 halves have been selected to be seeded with Ly data.

Seeding the Plan

When seeding the plan, you can choose which information is seeded. For instance, you can seed just one half or all halves in the workbook. You can also choose what locations and products to seed.

There are two ways you can seed. You can seed each dimension individually, or you can seed several dimensions at once by changing the hierarchy dimension shown in the worksheet.

Seeding One Dimension at a Time

As shown in Figure 4-5, only the 22 Men's Casualwear group of the Brick & Mortar channel has been selected to be seeded. This means that the other product groups have not been selected to be seeded yet. To seed the next department in the Product hierarchy within the Brick & Mortar channel, perform the following steps:

1. Click within the hierarchy field that you want to change, as shown in Figure 4-6.

2. Click the Next or Previous arrow, as shown in Figure 4-6.

   Figure 4-6 Changing a Hierarchy Dimension with Page Arrows

   
   

3. The next dimension in the hierarchy appears. Note that the Seeding Type measure is now set to Do Nothing.

4. Choose the seeding type for one or more halves.

5. Click the Next arrow to view and seed the next dimension.

6. When you have selected all the data you want to seed, click Seed in the Planning Actions menu.

   Figure 4-7 Planning Actions Menu: Seed

   
   

7. A confirmation message appears, stating that the data has been successfully seeded. Click OK.

   Figure 4-8 Seeding Success Message

   
   

After you have seeded, the worksheet is refreshed and the Last Seed Source and Last Seeded Date measures contain the type and date of the last seed, as shown in Figure 4-9.

Figure 4-9 Seeded Working Plan

Seeding Several Dimensions at Once

If you want to seed several locations and several products at once, you may want to change the dimension of the hierarchies shown in the worksheet.

The default setting of the Initialize Plan worksheet is set to show the Calendar hierarchy at the half dimension, the Location hierarchy at the channel dimension, and the Product hierarchy at the department dimension.

To change the hierarchy dimension shown in the worksheet, perform the following steps:

1. Right-click the hierarchy tile of the hierarchy dimension you want to change.

   Figure 4-10 Hierarchy Tiles

   
   

2. The right-click context menu appears. Select the dimension of the hierarchy that you want to appear, as shown in Figure 4-11.

   If you want to view more than one dimension at a time in the worksheet, select multiple dimensions.

   Figure 4-11 Seeding Several Dimensions at Once

   
   

3. Deselect the dimensions that you do not want to appear.

   In Figure 4-12, Channel and Department were deselected and all[Location] and all[Product] were selected instead.

   Figure 4-12 Seeding All Locations and All Products

   
   

4. After the hierarchies are at the dimension you want, select the Seeding Type for each half.

5. When you have selected all the data you want to seed, click Seed in the Planning Actions menu, as shown in Figure 4-13.

   Figure 4-13 Planning Actions Menu: Seed

   
   

6. A confirmation message appears, stating that the data has been successfully seeded. Click OK.

   Figure 4-14 Seeding Success Message

   
   

After you have seeded, the worksheet is refreshed and the Last Seed Source and Last Seeded Date measures contain the type and date of the last seed.

Figure 4-15 Seeded Working Plan

Setting Beginning of Season Inventory

After you have seeded, set the Beginning of Season (BOS) inventory. By entering the BOS inventory that you project for the season, you can set the BOS markup for that inventory, which allows the BOS cost to be calculated.

To set the BOS, perform the following steps:

1. In the Initialize Plan worksheet, change the measure profile to Seed and Set BOS Inventory.

2. The worksheet is refreshed and the Seed and Set BOS Inventory measures are visible.

   Figure 4-16 Initialize Plan Worksheet with Seed and Set BOS Inventory Measure Profile

   
   

3. Change the calendar hierarchy rollup to year.

4. Enter data in the BOS Inv R, BOS Inv IMU% , and Wp BOS Inv U measures.

   Figure 4-17 Initialize Plan Worksheet with Seeded and Set BOS Inventory

   
   

5. Click Calculate.

After the BOS is planned, the cost and AUR is calculated.

After you have seeded the departments and set the BOS, continue to the Target Overview Worksheet.

Target Overview Worksheet

After you have seeded the groups, use the Target Overview worksheet to review the targets created by the top down user to understand the goal that your plan should meet.

Note: The top down targets are at the group level, but the worksheet shows the department level by default. To see the targets, change the level of the Product hierarchy from department to group. To see the TD Tgt Publish Date and Info measures, change the level to division and include year in the Calendar rollup.

Figure 4-18 Target Overview Worksheet

The Target Overview worksheet contains the top down target (TD Tgt) measures as well as last year (Ly) measures.

Use this worksheet to compare the TD Tgt measures to the corresponding Ly measures. By understanding how the top down targets compare to last year's metrics, you can better understand what your plan needs to achieve.

Note: All measures in the Target Overview worksheet are read-only. The measures that you edit are in other worksheets.

The following table lists the measures available on this worksheet.

Table 4-2 Target Overview Worksheet Measures

Measure	Description
TD Tgt Sales R	The top down target for sales.
Ly Sales R	Last year's sales.
TD Tgt Sales var Ly R%	The top down target for variance between target sales value and last year's sales value, expressed as a percentage of the last year value.
TD Tgt Markdown R	The top down target value for markdowns.
TD Tgt Markdown R%	The top down target for markdown rate.
Ly Markdown R	Last year's value for markdowns.
Ly Markdown R%	Last year's markdown rate.
TD Tgt Mkd down Var Ly R%	The top down target for variance between target markdowns and the last year markdowns, expressed as a percentage of the last year value.
TD Tgt CMU%	The top down target for cumulative markup rate.
Ly CMU %	Last year's cumulative markup rate.
TD Tgt Gross Margin	The top down target for gross margin.
TD Tgt Gross Margin %	The top down target for gross margin rate.
Ly Gross Margin	Last year's gross margin.
Ly Gross Margin %	Last year's gross margin as a percentage of total sales.
TD Tgt GM Var Ly R%	The top down target for variance between the target gross margin and last year's gross margin, expressed as a percentage of the last year value.
TD Tgt Cum Turn R	The top down cumulative inventory turns (retail) target. It is cumulated from the start week of the workbook.
Ly Cum Turn R	Last year's cumulative inventory turns (retail). It is cumulated from the start week of the workbook.
TD Tgt Cum Avg Inv R	The top down average cumulative inventory turns (retail) target. It is cumulated from the start week of the workbook.
Ly Cum Avg Inv R	Last year's average cumulative inventory turns (retail). It is cumulated from the start week of the workbook.
TD Tgt Publish Date	The date that the top down target was published.
TD Tgt Publish Info	Additional information about the top down targets. This information was entered by the top down user who published the targets.

Retrieving Updated Top Down Targets

If the top down user updates the top down targets after you have created your department targets, retrieve those new targets in one of two ways. You can build a new workbook which uses the updated targets from the domain. Or, if you want to bring the new targets into one of your existing workbooks, you can refresh the workbook.

Refresh the Workbook

When refreshing a workbook, you can run a refresh group that has been configured in order to retrieve data from the master database.

To refresh a workbook, click the Refresh option in the File menu.

Figure 4-19 Refreshing a Workbook

For more information about the refresh option, see the Oracle Retail Predictive Application Server User Guide for the Classic Client. For information about creating refresh rule groups, see the Oracle Retail Predictive Application Server Configuration Tools User Guide.

After you have reviewed and compared the top down targets to the last year metrics, continue to the Sales / Markdowns Tab.

Sales / Markdowns Tab

The Sales / Markdowns tab contains one worksheet, the Plan Sales and Markdowns worksheet.

Plan Sales and Markdowns Worksheet

After you have seeded the groups and reviewed the top down group targets, you can plan the sales and markdown targets for the departments within those groups using the Plan Sales and Markdowns worksheet.

The top down user plans top down targets at the month level. As the middle out user, you should use those targets to create more detailed targets at the week level. This allows you to create a weekly EOP plan that has more accurate average inventory and turn-over plans.

Use the following best practices to plan the sales and markdowns.

1. Using the default measure profile, review and compare the total sales to the forecast.

2. Change the measure profile to Sales by Type.

   Figure 4-20 Plan Sales and Markdowns Worksheet, Sales by Type Measure Profile

   
   

3. In the Sales by Type measure profile, plan your sales by type. The sales types are regular (Reg), promotional (Promo), clearance (Clr), and regular and promotional (Reg + Promo).

   
   

   Note: Since Sales and Markdowns are both planned at the type level, the user must first complete the sales by type planning before they can plan the markdowns by type.

   
   

   Start by planning the regular sales. Then, using your marketing calendar as a guide, align the promotional sales to the calendar. Refer to the calendar again for the exit weeks for the products, and plan the clearance sales for those weeks.

   The planned figures for these sales types populates the Wp Sales R measure.

4. With the total Wp Sales R populated, you can adjust the total to your target while still maintaining the relationships between the different sales types.

5. Plan the shrink with either the Wp Shrink R or Wp Shrink R% measure.

6. Change the measure profile to Markdown by Type.

7. In the Markdown by Type profile, edit the Wp Markdown Promo R% to adjust the Wp Markdown Promo Rate.

   Figure 4-21 Plan Sales and Markdowns Worksheet, Markdown by Type Measure Profile

   
   

The following table lists the measures available on the default measure profile of this worksheet.

Table 4-3 Plan Sales and Markdowns Worksheet Measures

Measure	Description
Wp Fcst Pre-Season R	The preseason forecast.
Wp Sales R	The planned sales retail value.
Wp Sales var Fcst Pre-Season R%	The planned preseason sales variance forecast.
Ly Sales R	Last year's sales retail value.
Wp Sales var Ly R%	The planned sales retail variance to last year expressed as a rate.
Ly Sales contrib Prod R%	Last year's sales contribution, expressed as a percentage of sales of all products in the workbook for this period.
Ly Sales contrib Time R%	Last year's sales contribution, expressed as a percentage of sales to one product's total across the workbook for this period.
Wp Markdown R	The planned markdown value.
Wp Markdown R%	The planned markdown value expressed as a rate.
Ly Markdown R	Last year's markdown value.
Ly Markdown R%	Last year's markdown value expressed as a rate.
Wp Markdown Var Ly R%	The planned variance between the target markdown value and last year's actual markdown, expressed as a percentage of last year.
Wp Shrink R	The planned shrink for the period.
Wp Shrink R%	The planned shrink for the period, expressed as a rate.
Ly Shrink R	Last year's actual (or current plan) shrink. Shrink is loss due to reason such as damage or theft.
Ly Shrink R%	Last year's actual (or current plan) shrink, expressed as a percentage of retail sales value.

After you have created the sales and markdown plan, continue to the Receipts / Inventory Tab.

Receipts / Inventory Tab

The Receipts / Inventory tab contains one worksheet, the Plan Receipts / Inventory worksheet.

Plan Receipts / Inventory Worksheet

After you have developed the sales and markdowns plan, develop a receipts and inventory plan that can support the sales that you are projecting in the sales and markdown plan.

Like the Plan Sales and Markdowns Worksheet, the Plan Receipts / Inventory worksheet contains several Ly metrics that you can reference when setting your targets. There are also additional measures you can use to adjust your inventory targets. Note that the adjustments you made to the Wp Sales R measure in the Plan Sales and Markdowns Worksheet are visible in this worksheet if you have calculated.

Use the following best practices to plan the receipts and inventory.

1. Ensure that you have set the beginning of season (BOS) inventory in the Initialize Plan worksheet in the Getting Started tab. The BOS measures must be set before planning the receipts and inventory. To set the BOS measures, see the Setting Beginning of Season Inventory.

2. Plan the receipt flow and then evaluate the average inventory and turn.

3. Review the Wp CMU % measure. Cumulative markup rate (CMU %) is a blend of the beginning of period (BOP) inventory retail and cost with the future receipt retail and receipt cost. The Wp CMU % directly affects the cost of goods sold (COGS), which then affects the gross margin.

4. Adjust the Wp Stock to Sales R measure accordingly. These adjustments affect the receipts for both the current month and prior month. However, the total plan period receipts do not increase or decrease; they only shift from month to month.

Figure 4-22 Plan Receipts / Inventory Worksheet

The following table lists the measures available on this worksheet.

Table 4-4 Plan Receipts / Inventory Worksheet Measures

Measure	Description
Wp BOS Inv R	The planned beginning of season inventory.
Wp BOS Inv IMU %	The planned beginning of season initial markup. (The BOS Inv IMU% must be planned to get the BOS Cost).
Wp BOP Inv R	The planned beginning of period inventory. The period can be a week, month, or any other calendar period.
Ly BOP Inv R	Last year's beginning of period inventory. The period can be a week, month, or any other calendar period.
Wp Sales R	The planned sales retail value.
Ly Sales R	Last year's sales retail value.
Wp Markdown R	The planned markdown value.
Wp Shrink R	The planned shrink for the period.
Wp Receipts R	The planned receipt value.
Wp Receipts MU %	The planned receipts markup, expressed as a percentage of retail value.
Ly Receipts R	Last year's receipts.
Ly Receipts MU %	Last year's markup percent of receipts, expressed as a percentage of markup to net sales.
Wp Rec Var LY R%	The planned variance between the target receipts and last year's actual receipts, expressed as a percentage of last year.
Wp EOP Inv R	The planned end of period inventory. The period can be a week, month, or any other calendar period.
Ly EOP Inv R	Last year's end of period inventory.
Wp CMU %	The planned cumulative markup percent, cumulated from the start week of the workbook.
Ly CMU %	Last year's cumulative markup percent, cumulated for the same period last year, corresponding to the start week of this workbook until the current week.
Wp Cum Avg Inv R	The planned average cumulative inventory turns (retail). It is cumulated from the start week of the workbook.
Ly Cum Avg Inv R	Last year's cumulative average inventory value (retail), corresponding to the start week of the workbook until the current week.
Wp Cum Turn R	The planned cumulative inventory turns (retail). It is cumulated from the start week of the workbook.
Ly Cum Turn R	Last year's cumulative inventory turns (retail).
Wp Stock to Sales R Ratio	The planned ratio of the BOP inventory to the sales for the same period.
Ly Stock to Sales R Ratio	Last year's ratio of the BOP inventory to the sales for the same period.
Wp Forward Cover R	The planned number of weeks of forward cover for the period. Using the retail values sales of future weeks, this measure indicates how many weeks of sales can be fulfilled with the ending inventory of the period.
Ly Forward Cover R	Last year's forward cover for the period.

After you have created an achievable receipts and inventory plan, continue to the Margin Tab to see if your sales and inventory plans achieve your gross margin goal.

Margin Tab

The Margin tab contains one worksheet, the Gross Margin worksheet.

Gross Margin Worksheet

Use this worksheet to evaluate the gross margin created from your sales and markdown plan and receipts and inventory plan. Determine whether the planned gross margin meets your gross margin goal. If it does not, return to the Plan Sales and Markdowns Worksheet and Plan Receipts / Inventory Worksheet to adjust your receipt markups and receipt flow. When you return to the Plan Sales and Markdowns worksheet, adjust the markdown plans, but do not change the sales. Continue this process until you are satisfied with the gross margin.

Figure 4-23 Gross Margin Worksheet

The following table lists the measures available on this worksheet.

Table 4-5 Gross Margin Worksheet Measures

Measure	Description
Wp Gross Margin	The planned gross margin.
Wp Gross Margin %	The planned gross margin rate.
Ly Gross Margin	Last year's gross margin.
Ly Gross Margin %	Last year's gross margin rate.
Wp GM Var Ly R%	The planned variance between the gross margin and last year's actual gross margin, expressed as a percentage of last year.
Wp Sales R	The planned sales retail value.
Ly Sales R	Last year's sales retail value.
Wp Markdown R	The planned markdown value.
Wp Markdown R%	The planned markdown rate.
Ly Markdown R	Last year's actual markdown value.
Ly Markdown R%	Last year's markdown rate.
Wp Shrink R %	The planned shrink rate for the period.
Ly Shrink R%	Last year's shrink rate.
Wp Receipts R	The planned receipts.
Wp Receipts MU %	The planned markup rate for receipts, expressed as a percentage of markup to net sales.
Ly Receipts MU %	Last year's markup percept for receipts, expressed as a percentage of markup to net sales.
Wp MarkUp R	The planned markup value for receipts, expressed as a difference of net sales and cost.
Ly MarkUp R	Last year's markup value for receipts, expressed as a difference of net sales and cost.
Wp CMU %	The planned cumulative markup percent. It is cumulated for the same period last year. It corresponds to the start week of the workbook until the current week.
Ly CMU %	The cumulative markup percent from last year.
Wp Cum Avg Inv R	The planned average cumulative inventory turns (retail). It is cumulated from the start week of the workbook.
Ly Cum Avg Inv R	Last year's average cumulative inventory turns (retail).
Wp GMROI %	The planned gross margin return on inventory.
Ly GMROI %	Last year's gross margin return on inventory.

Now that you have developed your inventory and gross margin targets, continue to the Review Plan / Publish Targets Tab.

Note: The next tab after the Margin tab is Open to Buy. This is used only during in-season management. For more information about Open to Buy, see Chapter 8, "In-Season Management".

Review Plan / Publish Targets Tab

The following sections describe the worksheets available under the Review Plan / Publish Targets tab:

• Review Plan / Reconcile Targets Worksheet

• Publish Targets Worksheet

Review Plan / Reconcile Targets Worksheet

In this worksheet, review the targets created from previous steps. If you need to alter the targets shown in this worksheet, return to the worksheet where you created them and edit them there.

Use the default measure profile to the review the plan in total. Use the Reconcile to TD Targets measure profile to reconcile your plan to the top down targets. When using this profile, set the calendar hierarchy to month and product to group.

Figure 4-24 Review Plan / Reconcile Worksheet, Reconcile to TD Targets Measure Profile

If you are satisfied with the plan you have created, continue to the Publish Targets Worksheet.

Publish Targets Worksheet

Use the Publish Targets worksheet when you are ready to publish the targets you created. Publishing targets copies the target information to the middle out target (MO Tgt) measures in your workbook, and then copies them to the database. After you have published the targets, the targets are passed down to the bottom up user.

Figure 4-25 Publish Targets Worksheet

Publish and Commit Targets

Publishing and committing a target copies your middle out Wp measure information to the MO Tgt measures in your workbook.

To publish the targets, perform the following steps.

1. Select the halves in the Wp Publish Targets measure that you want to publish.

2. If needed, enter relevant information in the Wp Publish Info measure. This is optional.

3. Repeat steps 1 and 2 for other locations and products if necessary.

4. Click Publish Targets in the Planning Actions menu, as shown in Figure 4-26.

   Figure 4-26 Planning Actions Menu: Publish Targets

   
   

5. A success message appears. Click OK to close it.

   Figure 4-27 Success Message: Publish Targets

   
   

The worksheet is refreshed and the Wp Publish Targets and Wp Publish Info measures are cleared. The MO Tgt measures in this worksheet are populated. These measures are described in detail in the table below.

Figure 4-28 Successfully Published Targets

Table 4-6 Publish Targets Worksheet Measures

Measure	Description
Wp Publish Targets	Use this measure to select the targets you want to publish.
Wp Publish Info	Use this measure to enter relevant target information. This measure is optional.
MO Tgt Published By	After a target is published, this measure displays the username of the person who published the targets.
MO Tgt Publish Targets Date	After a target is published, this measure displays the date that the target was published.
MO Tgt Publish Info	After a target is published, this measure displays the information that was entered in the Wp Publish Info measure.

After you have published your targets, the bottom up user can use your department targets to create their class and subclass plans. To learn about the bottom up user's role, see the Bottom Up: Preseason Planning chapter.

If you need to revise your targets at any time during the preseason, you can follow the same procedures described in this chapter. Since you have already created a working plan, there is no need to seed the workbook again unless you want to start again with Ly (Last Year) data.

After the bottom up user has submitted their class and subclass plans to you, you can approve or reject them in the Submitted Plan Review / Approval Tab. For more information about approval, see Chapter 4, "Middle Out: Preseason Planning".

For information about Open to Buy (OTB) and in-season management, see Chapter 8, "In-Season Management".

Commit Wp Measures

If you want to commit your working plan (Wp) measures to the database, you need to perform a separate commit in addition to publishing your targets. For more information about committing, see the Oracle Retail Predictive Application Server User Guide for the Classic Client.

To commit your Wp measures, perform the following steps:

1. In the workbook that you have published the targets, click a Commit option in the File menu.

   Figure 4-29 Commit a Workbook