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Key Challenges Why SAP Was Selected Industry • Support growth with integrated processes • Breadth and fit of software offering matched across 3 distinct businesses Wawa’s needs Revenue • Improve cost management and business • Superior integration across SAP® modules US$6.0 billion analysis with 1 version of the truth (enterprise resource planning, supply chain • Maximize square foot profitability through management, and retail) Employees assortments and clustering • SAP’s commitment to the retail industry 17,000 • Enable customer focus by store • Cost-effective upgrade strategy Headquarters associates • Extensive SAP ecosystem and partners Wawa, • Empower store managers to drive • Strong customer references efficiency Web Site • Replace complex, disparate legacy www.wawa.com systems

SAP® Solutions and Services SAP® ERP application, SAP for Retail solu- Implementation Best Practices Low Total Cost of Ownership tion portfolio, SAP NetWeaver® technology • Focused on active executive engagement • Replaced multiple legacy systems platform, SAP NetWeaver Business Ware- • Established a program management office • Simplified IT infrastructure house component, SAP NetWeaver Busi- • Defined project deliverables clearly • Reduced the cost of information manage- ness Warehouse Accelerator software, • Partnered closely with SAP to leverage ment, adding $250,000 annually to net treasury applications from SAP, SAP Collab- technology and implementation expertise income orative Project Management application, SAP Supply Chain Management application, • Executed an extended pilot in 50 stores SAP Forecasting and Replenishment applica- tion, SAP Extended Procurement for Retail Financial and Strategic Benefi ts Projected Operational Benefi ts and Wholesale Distribution package • Enhanced visibility of business operations Key Performance Indicator Impact • Better decision making with better data Increased sales due to better +1.5%1 Since opening its first • Automated business processes store order management in 1964, Wawa Inc. has expanded to over • Better yield management in food services 570 locations across five mid-Atlantic • More efficient distribution and stock levels Increased sales due to better +1.5%2 • Lower store labor costs foodservice management states. Today, with products ranging from • Improved visibility to shrink and spoilage Increased sales due to better +1%3 award-winning and management category management to pay-at-the-pump , Wawa is a • Annual savings of approximately regional icon. When the company’s US$1.3 million Increased gross margin +.35%3 • Merchandising based on buying habits Increased rebate collections +1% disparate legacy systems could no • Enablement of direct product profitability longer support this rapidly growing busi- • Improved inventory management Reduced project cost overruns –25% ness, Wawa executives decided to fuel new revenue growth and manage their costs more efficiently with SAP® soft- ware optimized for the retail industry.

1. All categories except foodservice, , and some drink products 2. Hot and cold foodservice categories 3. Non-foodservice categories

SAP Business Transformation Study Retail “As our competition heated up, we needed to be a more process-centric organiza- www.sap.com/contactsap tion. Wawa’s success depends on self-discipline, self-reliance, and the ability to glue our three business segments together.”

Howard Stoeckel, CEO, Wawa Inc.

Stiff Competition in a High-Volume Wawa established a program manage- those processes and the business areas,” World ment office to shepherd the effort and to says Baldino. ensure that the implementation started For millions of regional customers, a trip with clearly defined objectives and clean Wawa is simplifying the daily lives of cus- to the local Wawa is a daily event. Wawa master data. Wawa went live with finan- tomers and employees alike. In the past, Inc. – headquartered in suburban Philadel- cials first, then piloted the retail solution in associates preparing store orders roamed phia – is a chain of 570 convenience selected stores before an enterprise- the floor with clipboards. Today, all Wawa stores famous for its freshly brewed cof- wide rollout. stores use a single, automated ordering fee and made-to-order hoagie - system. Moreover, improved processes es. However, as John Baldino, the Richer Data and Improved Processes streamline the management of highly reg- company’s enterprise director of program ulated categories such as tobacco. As a management, explains, “Wawa is really Company executives now enjoy a deeper result, the company estimates that store three distinct businesses under one roof. view of the business along with their labor costs have decreased by an average We are a convenience store, a foodser- morning cup of Wawa coffee. With visibili- of $715,000 a year. vice business, and a fuel business.” ty down to the category and item level, managers can focus on key retail con- The Future of Convenience Wawa has expanded dramatically in cerns such as store stock levels, product recent years. “But the bad news,” says costs, spoilage, and shrinkage. At Wawa, where most stores are open CEO Howard Stoeckel, “is now every- 24 hours a day, 365 days a year, process body wants to be in convenience.” These This richer information enables better- improvement doesn’t take a rest either. days, the company’s high-volume busi- informed decisions across the organiza- Currently the company is seeking further ness segments face increasing pressure tion. In foodservice, for instance, Wawa benefits through revenue optimization, from a growing number of hungry compet- has the tools to fully analyze the demand space optimization, and direct product itors – from fast-food vendors to drug- and yields for specific recipes and menu profitability. Looking forward, Stoeckel stores. To serve up continued revenue mixes. Greater control over total quanti- only sees more of the same. “At Wawa, and profit growth in this environment, ties and individual portioning has delivered we fully expect to continue transforming Wawa executives knew they had to an estimated US$4 million annual impact our business for decades to come.” replace the legacy “spaghetti architec- on the business. In another example, a ture” that stifled their IT systems. single change in the distribution strategy for Wawa-branded nuts saved the compa- SAP® Software Is the Enabler of ny $1.5 million. Change Wawa also optimizes inventory control by To help Wawa become more process- leveraging insights about customer buying centric, the company’s executives chose habits. This reduces out-of-stock situa- the SAP® ERP application, software from tions and enables the company to the SAP for Retail solution portfolio, and respond effectively to seasonal needs, the SAP NetWeaver® technology platform. such as the increased holiday demand for The software’s superior integration and film and batteries. “SAP helped us to SAP’s commitment to the retail industry think of our processes as end-to-end and were key factors in their decision. to see the interconnections between

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