Page 17 - Pancake_Supply_Chain_Co-op_Inc._2016_Annual_Report

administration

The Administration team is responsible This year was the Administration department’s second year
for support functions at the Co-op, including tracking overall performance against a Modified Producer
cost management reporting, information technology, Price Index (“MPPI”). The Pancake market basket is
data analytics, process improvement, communications, comprised of a group of key products from different categories
membership services, accounting, finance, auditing, that represent approximately 75% of the total spend in IHOP
compliance, and human resources. The team also manages restaurants, while the MPPI is made of PPI sub-indices
third-party vendors who provide additional services in these that resemble those same products with the same mix.
areas. Comparing the relative change in both indexes creates a
more comprehensive view of the impact of contract savings,
A cross-functional team in the department delivered new increases, cost avoidances, and underlying commodity market
functionality in 2016 that ensures Members are being charged movements. Combined with performance measurements for
the correct prices in real time, also known as the “price inventory management and the cost savings pipeline, CSCS
variance analysis” process or “PVA”. PVA has traditionally achieved 65% of its overall Co-op company goals for 2016.
been done manually and in arrears, sometimes up to six
months, which resulted in refund checks for our Members. Co-op membership and active participation are foundational to
The new process compares invoice pricing to contracted building the volume and credibility required to unlock savings

Combined with performance measurements for
inventory management and the cost savings pipeline,

CSCS achieved 65% of its overall Co-op company
goals for 2016.

costs on a near real-time basis, and automatically alerts the that only large-scale systems can realize. At the end of 2016,
appropriate distribution center when discrepancies exist. The 99.3% of the IHOP restaurants in the U.S. were Members in
new automated approach not only reduces the headcount the Pancake Supply Chain Co-op. The Pancake Supply Chain
required to perform PVA, it also significantly improves pricing Co-op Board of Directors and the Board committees met
accuracy so you are paying the correct price at all times and throughout the year to provide oversight and guidance on the
not waiting on the distributor to “true up” with you at the end Co-op’s activities to ensure proper alignment with Member
of a period. interests. Membership was kept informed through weekly Co-
op newsletters and special news blasts.
The Co-op relies on system-wide supplier, distributor, and
restaurant data to achieve our vision of end-to-end supply In addition, in 2016 we maintained several distributor
chain visibility. Co-op activities such as contract negotiations, programs to ensure balanced pricing was realized across all
inventory management, and pricing compliance all depend on Members, received clean audit opinions for the eighth year in
timely and accurate information. Strides were made again this a row, tackled hundreds of information technology requests,
year to realize additional pieces of this vision. Improvements conducted our fourth annual employee engagement survey,
were implemented in the CSCS vendor portal to increase conducted our fifth annual Member Maniac week, completed
user adoption. Increased levels of supplier inventory data now planning for a Supply Chain Partner Summit to be held in
complement distributor inventories with nearly fifty suppliers January 2017, and the list goes on. In addition to the team’s
providing real-time visibility, and another 20-30 on the daily responsibilities, we are looking forward to 2017 and
docket. The team also developed and rolled out a customer the opportunities to continuously improve our processes and
relationship management tool to better organize Member data. programs resulting in increased value for our Members.

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