Page 13 - Pancake_Supply_Chain_Co-op_Inc._2016_Annual_Report

Freight Management Produce

CSCS monitors each produce distribution center to ensure
Our freight management strategy continued to improve freight all mandated items sold to IHOP restaurants are purchased
costs for our Members. Four main initiatives contributed to the from approved suppliers. The primary focus in 2016 was to
overall savings plan by leveraging logistics partners, scrutinizing eliminate non-compliant distributors who were consistently
transportation costs, and coordinating lane transitions resulting non-compliant.
in immediate freight benefits to Members. In 2016, CSCS
delivered $2.6M in annualized savings for the Pancake Co-op. Produce Distribution Optimization Project
starting in 2017 is a three-year plan.
3PL RFP Program (Third Party Logistic) Currently there are 93 produce distributors servicing Applebee’s
The 3PL RFP gained momentum in generating freight savings. and IHOP restaurants. CSCS initiated a project to optimize
Over 1,700 freight lanes were issued to third party partners the produce distribution network by reducing the number of
(3PL’s) for bid. By the close of 2016, over 70 lanes were distribution centers to provide improved economic benefit and
transitioned resulting in annualized savings of $700K. better contracting to Members.

Shared Savings Programs pancake co-op freight savings
apple co-op freight savings
CSCS partners with each distributor to maximize the number
target vs. actual
of backhauls and lanes designated for revenue sharing. These target vs. actual
3500000
3500000
3500000 3500000
partnerships along with extensive collaboration produced
Program target
3000000
3000000
3000000 $330k in annualized savings. Funds generated from this 3000000 Program target
program are returned to Co-op Members in the form of a
2500000
2500000
2500000 rebate. 2500000
2000000 Redistribution 2000000
2000000
2000000
Freight redistribution enables CSCS to consolidate and
1500000
1500000
1500000 redirect slow moving less than truckload (LTL) shipments to a 1500000
redistributor to move in full truck loads. In 2016, redistribution
1000000
1000000
1000000 savings reached $1.5M. 1000000
500000 Retarget Analysis 500000
500000
500000
Retargeting allows CSCS to generate freight savings by
0 0 0 0
maximizing distributor purchase order size. The retarget analysis
red/iti
3pl rfp
2016 annualized savings frt bracket retarget 2016 annualized savings frt bracket retarget
delivered a total of $140K in annualized savings in 2016. 3pl rfp red/iti
2016 target shared savings 2016 target shared savings
12%
pancake co-op distribution
of freight savings
Shared savings
56% 27% 3PL RFP
Frt Bracket Retarget
ReD/ITI
5%

11

apple co-op distribution
33% 39% of freight savings
Shared savings
3PL RFP
Frt Bracket Retarget
9% ReD/ITI
19%