Page 150 - Tom Finocchiaro - RPI Apple Onboarding

FREIGHT MANAGEMENT
2017 proved to be a year of change for the freight industry. APPLE CO-OP DISTRIBUTION OF
A new Washington administration, back-to-back devastating FREIGHT SAVINGS
hurricanes, and the implementation of a new regulation
contributed to rate increases and reduced the availability of
equipment to move freight. CSCS continued to focus on four 5%
areas to manage increasing freight costs and achieved an
overall savings of $2.5M for Apple Co-op Members. ReD/ITI
21% 31%
3PL RFP (THIRD PARTY LOGISTICS) Shared Savings
The 3PL RFP is conducted annually and leverages selected
3PL providers to validate supplier rates against current market 3PL RFP
conditions. Freight lanes that transitioned in 2017 produced
$537k in savings for Co-op Members. 43% Frt Bracket Retarget

REVENUE SHARING (REBATES)
CSCS works with distributors to develop programs that allow
freight revenue from DC managed lanes to be shared between
the distributor and Co-op Members. Currently, 11 of the
16 Applebee’s distributors are actively participating in this
program. Funds generated from revenue sharing reached
$1.07M in 2017 and were returned to Co-op Members in the
form of a rebate. PRODUCE PROCUREMENT
Over 97% of Applebee’s produce spend is under contract.
REDISTRIBUTION (RE-D) Continuity of supply, cost management, and protection are the
Redistribution creates savings by consolidating slow moving primary drivers in contracting produce. In 2017, CSCS added
less than truckload (LTL) shipments to a redistributor. In 2017, strawberries to the produce items contracted and achieved a
Applebee’s received 729k cases through redistribution which 6% savings.
generated $770k in annual savings. Overall, Applebee’s Co-
op Members received $1.06 savings per case through this CSCS produce contracts compared to markets resulted in
program. mitigating $3.7 million in cost. Romaine was the primary
mitigation driver between CSCS contract price and USDA
RETARGET ANALYSIS market. The graph below highlights the protection CSCS
A retarget analysis is performed quarterly to increase the contracts provide during extreme market conditions, and how
purchase order size for distributors which ultimately reduces the negotiated triggers mitigate price volatility when demand
freight costs. In 2017, the retarget analysis delivered a total of exceeds supply. Produce crop availability and quality struggles
$135k in savings. during the bi-annual transition from Yuma to Salinas in March/
April and again October/November.

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