Page 17 - 2019 Apple Supply Chain Co-op, Inc. Annual Report

Brand Programs

The Brand Programs Management (BPM) team is responsible for working with the Brand’s cross-functional team to support
new product development, testing, promotions, SKU transitions, and deletions. The collaboration begins with the new
product development process and ends with the implementation of promotions or menu changes. During new product
development, our Brand Programs team works with the Applebee’s Marketing and Culinary groups to identify and leverage
the appropriate suppliers in the item development process with the goal of providing transparency of cost drivers, supply
risks, and alternatives to help them make the most informed decisions going into test. Once in test, the team is responsible
for communicating expected demand to participating vendors and distributors, comparing sales to expected demand, and
reacting appropriately with either allocations or expediting to maintain continuity of supply for items that are doing better than
expected. At the conclusion of each test, the team manages the invoicing process to make sure vendors and distributors are
paid appropriately and timely. Once the Brand decides to move forward with a promotional or menu change, they provide a
forecast to the BPM team with the expected impact those changes will have to traffic and plate sales mix. The BPM team is
responsible for translating plate sales change into SKU change. We then work with the CSCS Procurement team to build out
a supply plan. The risks associated with that supply plan are specified in a document called an AIP. The AIP is signed by CSCS
and Brand leadership as well as the Co-op Board Chairman. That document designates liability and authorizes CSCS to act as
a purchasing agent for the event.

For every menu or promotional event supported, a detailed scorecard is completed that measures our performance. These
scorecards are reviewed with the CSCS Co-op Board of Directors. The key attributes measured are:
• Timely Forecast – Forecast delivered to CSCS complete and with appropriate lead time
• Timely Authorization of Inventory Purchase (AIP) – All appropriate signatures
• Forecast Integrity – Absolute value variance of weighted average sales versus forecast
• Product Availability – Products available for start-up and throughout promotional period
• Obsolescence / Cost – Dollar impact to Members and Brand

CSCS restructured a portion of the BPM team to enhance productivity of the work team in Kansas City by splitting inventory
strategy and distributor inventory management into distinct roles at the end of 2018. This change has resulted in increased
collaboration between BPM and the vendors and distribution centers. The Inventory Strategist works closely with the Brand
Liaison and the vendors to build the supply plans out to manage change in the system. The Distribution Center (DC) Liaisons
are broken up geographically to work directly with their subset of distribution centers to make sure they understand the
change coming from the Inventory Strategists as well as ensure the DCs are taking the appropriate actions required to
manage that change. They utilize a Microsoft Teams interactive platform to collaborate in real time. They participate in the
DC business review meetings that includes CSCS, distribution, and Member leadership. They also help the DCs work through
any unexpected vendor production issues, item transitions, substitutions, shipping delays, payment issues, etc. This past year
the team worked through a multitude of changes driven by both cost savings with RPM as well as Brand driven changes with
the Marketing calendar. RPM accounted for 170 projects, and 1062 SKU/DC transitions. Additionally, the Marketing calendar
created 25 new tests with 48 new SKUs. The Marketing calendar had 10 promotions, 12 national drink of the month
windows, 4 core menu changes including 21 new SKUs, 20 deletions and 3 LTO SKUs. The BPM team continues to make
improvements to technology, processes, and personnel investment to ensure product availability for our Members as well as
execute the changes being driven by RPM.

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